Integration and Task Allocation: Evidence from Patient Care

Abstract

Using the universe of patient transitions from inpatient hospital care to skilled nursing facilities and home health care in 2005, we show how integration eliminates task misallocation problems between organizations. We find that vertical integration allows hospitals to shift patient recovery tasks downstream to lower-cost organizations by discharging patients earlier (and in poorer health) and increasing post-hospitalization service intensity. While integration facilitates a shift in the allocation of tasks and resources, health outcomes either improved or were unaffected by integration on average. The evidence suggests that integration solves coordination problems that arise in market exchange through improvements in the allocation of tasks across care settings.

Market Power, Transactions Costs, and the Entry of Accountable Care Organizations in Health Care

“…They find a small and generally statistically insignificant reduction in prices for integrated organizations. David et al (2011) analyze integration between hospitals and nursing homes and home health care agencies. They note that statutes and regulations against side payments lead to contractual incompleteness (David et al 2011;Leibenluft 2011;Cuellar and Gertler 2006).…”

Do hospital-owned skilled nursing facilities provide better post-acute care quality?

“…Specifically, David and colleagues (2013) instrument for a particular hospital owning a SNF by using the rate of SNF ownership by other hospitals in the same market. Using this approach, the authors found lower 60-day hospital readmission rates for patients discharged to a SNF owned by that hospital.…”

The Cost of Obesity for Nonbariatric Inpatient Operative Procedures in the United States

“…We matched the patients using age, sex, race, primary procedure, and all 28 AHRQ comorbid defined elements in the NIS database (see Table, Supplemental Digital Content 2, available at http://links. 33 After the match and subsequent patient pruning, the obese and nonobese groups contained equal numbers of patients and are referred to as the "matched comparison group." We used the coarsened exact matching (CEM) algorithm to perform the matching process.…”