Showing papers by "David Dranove published in 1996"

Are Multihospital Systems More Efficient

Abstract: Jamie Robinson and Larry Casalino, in their paper that leads off this volume of Health Affairs, offer the provocative view that there may be less vertical integration than many experts predict. Of course, health care providers are integrating horizontally as well as vertically. That is, hospitals in many cities are merging to form local multihospital systems. However, although the conventional wisdom is that these systems will generate efficiencies in the production of services, surprisingly little systematic evidence exists to support this view. To fill this research gap, and to determine the benefits of horizontal integration, we did a cross-sectional analysis of local hospital systems in California in the late 1980s and then in the early 1990s. In both studies we found that the benefits of horizontal integration stem from greater efficiencies in marketing hospital systems to the community rather than from efficiencies in the production of services. Our analysis does not control for self-selection into systems, however, so it is not fully conclusive. Further research is necessary to settle the issues that we raise.

Specialization, Option Demand, and the Pricing of Medical Specialists

Abstract: This paper discusses the supplier power of medical specialists. We argue that a combination of factors, including the structure of health care delivery, reimbursement systems, the presence of option demand, and high consumer switching costs, create circumstances in which medical specialists may be able to exercise significant seller power. We explore the implications of this for the pricing and organization of medical care.