The effects of physician and hospital integration on Medicare beneficiaries’ health outcomes

Authors:
Thomas Koch, Brett Wendling, and Nathan Wilson
Working Paper:
337

We consider whether hospital acquisitions of physicians lead to improved clinical outcomes for Medicare patients aged 65 and older. The analysis combines 2005-2012 Medicare fee-for-service and enrollment data with merger and physician affiliation information from the Levin Reports and SK&A, respectively. The analysis uses propensity score matching and a discrete-time hazard model to determine the effect of acquisitions on several health outcomes: mortality, acute myocardial infarctions, acute circulatory conditions, ischemic heart disease, glaucoma, symptomatic diabetes complications, and asymptomatic diabetes complications. These outcomes represent the progression of hypertension and diabetes into worse health states. Our results indicate that hospital acquisitions of existing physician practices have no statistically significant clinical benefits for the health outcomes we consider.