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Patient Admission Patterns and Acquisitions of "Feeder" Hospitals

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  • Sayaka Nakamura
  • Cory Capps
  • David Dranove

Abstract

"Acquiring outlying community hospitals is one approach commonly used by large tertiary care hospitals to increase referrals. Sophisticated acquirers may also seek to selectively increase referrals of more profitable patients. To explore these issues, we study vertical hospital acquisitions. Using a treatment and control framework, we find that roughly 30% of vertical acquisitions lead to a significant increase in referrals. Very few result in decreases. We find that increases are concentrated among patients undergoing more profitable procedures and with more generous insurance. However, we find no evidence that hospitals shun patients with higher expected costs of care." Copyright 2007, The Author(s) Journal Compilation (c) 2007 Blackwell Publishing.

Suggested Citation

  • Sayaka Nakamura & Cory Capps & David Dranove, 2007. "Patient Admission Patterns and Acquisitions of "Feeder" Hospitals," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 16(4), pages 995-1030, December.
  • Handle: RePEc:bla:jemstr:v:16:y:2007:i:4:p:995-1030
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    Cited by:

    1. Christopher Afendulis & Daniel Kessler, 2011. "Vertical Integration and Optimal Reimbursement Policy," NBER Working Papers 17316, National Bureau of Economic Research, Inc.
    2. Jeremy A. Verlinda, 2007. "Price-Response Asymmetry and Spatial Differentiation in Local Retail Gasoline Markets," EAG Discussions Papers 200704, Department of Justice, Antitrust Division.
    3. Christopher Afendulis & Daniel Kessler, 2011. "Vertical integration and optimal reimbursement policy," International Journal of Health Economics and Management, Springer, vol. 11(3), pages 165-179, September.

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