Medical staff characteristics and hospital costs

In order to test the hypothesis that medical staff physicians affect hospital behavior, this paper relates cost data for a sample of non-major-teaching, short-term hospitals to information on the characteristics of the medical staff which treats patients in those hospitals. Measured characteristics of the staff include specialty mix of attending physicians, board-certification status, and the concentration of hospital output among attending physicians. Medical staff variables are found to be as important as measured casemix in explaining cost variation across hospitals. The results are shown to have implications for behavioral models of the hospital and for hospital reimbursement policy.