Do Medicare’s Facility Fees Incentivize Hospitals to Vertically Integrate with Oncologists?
Within the past decade, the U.S. health care market has undergone massive vertical integration, prompting economists to study the underlying causes and consequences of hospital-physician integration. This paper examines whether or not hospitals strategically choose to vertically integrate with clini...
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| Format: | Article |
| Language: | English |
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SAGE Publishing
2021-06-01
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| Series: | Inquiry: The Journal of Health Care Organization, Provision, and Financing |
| Online Access: | https://doi.org/10.1177/00469580211022968 |
| _version_ | 1819154320342384640 |
|---|---|
| author | Samuel Valdez Ph.D. |
| author_facet | Samuel Valdez Ph.D. |
| author_sort | Samuel Valdez Ph.D. |
| collection | DOAJ |
| description | Within the past decade, the U.S. health care market has undergone massive vertical integration, prompting economists to study the underlying causes and consequences of hospital-physician integration. This paper examines whether or not hospitals strategically choose to vertically integrate with clinical oncologists in order to capture facility fees, a commonly cited reason for increased consolidation in the health care market. To address this question, I match data on hospitals’ ownership of clinical oncologists with Medicare payment data disaggregated to the physician and specific service level. I leverage a 2014 policy change that drastically altered the payment structure of Medicare’s facility fees paid to hospitals for evaluation and management services—and yet, it did not alter the direct payments made to physicians. Contrary to popular belief, I find no evidence that the financial incentives of facility fees have an effect on the probability that a hospital and a clinical oncologist vertically integrate. |
| first_indexed | 2024-12-22T15:19:12Z |
| format | Article |
| id | doaj.art-7fb48d986f364187957474dc40f71a2e |
| institution | Directory Open Access Journal |
| issn | 0046-9580 1945-7243 |
| language | English |
| last_indexed | 2024-12-22T15:19:12Z |
| publishDate | 2021-06-01 |
| publisher | SAGE Publishing |
| record_format | Article |
| series | Inquiry: The Journal of Health Care Organization, Provision, and Financing |
| spelling | doaj.art-7fb48d986f364187957474dc40f71a2e2022-12-21T18:21:40ZengSAGE PublishingInquiry: The Journal of Health Care Organization, Provision, and Financing0046-95801945-72432021-06-015810.1177/00469580211022968Do Medicare’s Facility Fees Incentivize Hospitals to Vertically Integrate with Oncologists?Samuel Valdez Ph.D.0University of Southern California, Los Angeles, CA, USAWithin the past decade, the U.S. health care market has undergone massive vertical integration, prompting economists to study the underlying causes and consequences of hospital-physician integration. This paper examines whether or not hospitals strategically choose to vertically integrate with clinical oncologists in order to capture facility fees, a commonly cited reason for increased consolidation in the health care market. To address this question, I match data on hospitals’ ownership of clinical oncologists with Medicare payment data disaggregated to the physician and specific service level. I leverage a 2014 policy change that drastically altered the payment structure of Medicare’s facility fees paid to hospitals for evaluation and management services—and yet, it did not alter the direct payments made to physicians. Contrary to popular belief, I find no evidence that the financial incentives of facility fees have an effect on the probability that a hospital and a clinical oncologist vertically integrate.https://doi.org/10.1177/00469580211022968 |
| spellingShingle | Samuel Valdez Ph.D. Do Medicare’s Facility Fees Incentivize Hospitals to Vertically Integrate with Oncologists? Inquiry: The Journal of Health Care Organization, Provision, and Financing |
| title | Do Medicare’s Facility Fees Incentivize Hospitals to Vertically Integrate with Oncologists? |
| title_full | Do Medicare’s Facility Fees Incentivize Hospitals to Vertically Integrate with Oncologists? |
| title_fullStr | Do Medicare’s Facility Fees Incentivize Hospitals to Vertically Integrate with Oncologists? |
| title_full_unstemmed | Do Medicare’s Facility Fees Incentivize Hospitals to Vertically Integrate with Oncologists? |
| title_short | Do Medicare’s Facility Fees Incentivize Hospitals to Vertically Integrate with Oncologists? |
| title_sort | do medicare s facility fees incentivize hospitals to vertically integrate with oncologists |
| url | https://doi.org/10.1177/00469580211022968 |
| work_keys_str_mv | AT samuelvaldezphd domedicaresfacilityfeesincentivizehospitalstoverticallyintegratewithoncologists |