Work

Does Multispecialty Practice Enhance Physician Market Power?

Year: 2020

Type: article

Abstract: In health care, vertical integration - common ownership of producers of complementary services - may have both pro- and anti-competitive effects. We use data on 40 million commercially-insured individuals from the Health Care Cost Institute to construct price indices for office visits to general-practice and specialist physicians for the years 2008-2012. Controlling for generalist market concentration, we find that generalists charge higher prices when they are integrated with specialists, and that the effect of integration is larger in more concentrated specialist markets. Conversely, controlling for specialist market concentration, specialists charge higher prices when integrated with generalists, with larger effects in more concentrated generalist markets. Our results suggest that multispecialty practice enhances physician market power.

Source: American Journal of Health Economics

DOI: 10.1086/708942

Authors: Laurence C. Baker, M. Kate Bundorf, Daniel P. Kessler

Institutions: National Bureau of Economic Research, Stanford University

Language: English

Topic: Healthcare Policy and Management

Subfield: Economics and Econometrics

Field: Economics, Econometrics and Finance

Domain: Social Sciences

Open Access status: green

Funder: National Institute on Aging

Award: Understanding and Improving Healthcare Decision-Making and Outcomes for People Living with Alzheimer's Disease and Related Dementias