The Effects of Integration between Physicians and Hospitals on Health Outcomes

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 difference-in-differences linear probability models to determine the effect of mergers on seven health outcomes: mortality, acute myocardial infarctions, acute circulatory conditions, ischemic heart disease, glaucoma, and two complications of diabetes. These outcomes represent the progression of hypertension and diabetes, which are commonly treated conditions among this population. Our precisely estimated results indicate that this integration has no statistically significant effects on all of the health outcomes that we consider. We interpret these results as evidence that full financial integration of providers typically has no impact on these health outcomes.