Strategic integration of hospitals and physicians.
A striking development in the healthcare market place has been the formation of strategic relationships between hospitals and physicians. Hospital-physician integration appears to be a response to rapidly expanding managed care health insurance. We examine whether integration lead to efficiency gains from transaction cost economies thereby allowing providers to offer managed care insurance plans lower prices or whether integration is really a strategy to improve bargaining power and thereby increase prices. We find that integration has little effect on efficiency, but is associated with an increase in prices, especially when the integrated organization is exclusive and occurs in less competitive markets.
Cuellar
Alison Evans
AE
Jospeh P. Mailman School of Public Health, Columbia University, 600 W. 168th Street, 6th Floor, New York, NY 10032, USA. ac2068@columbia.edu
Gertler
Paul J
PJ
D003362:Cost-Benefit Analysis; D006759:Hospital-Physician Joint Ventures / Q000191:economics / Q000458:organization & administration*; D014481:United States