The effect of hospital-physician integration on hospital costs.

This study evaluates whether hospital costs are lower when hospitals integrate with physician practices. It addresses a common element in policy attempts to contain healthcare costs, which is to encourage greater coordination in healthcare delivery. Despite a clear trend toward greater hospital-physician integration, there is little direct evidence about whether integration lowers hospital costs. The results in this paper show that hospital costs increase by one to three percent after hospital-physician integration. We also do not find consistent evidence that hospital-physician integration is associated with higher quality but potentially more costly hospital care. The modest increase in hospital costs appears to derive from an increase in outpatient visits, rather than from higher costs of inpatient care. These findings do not support the hypothesis that increased coordination between hospitals and physicians has led to lower hospital costs.

One Chance in a Million: Altruism and the Bone Marrow Registry.

Stem cell transplants save lives of many patients with blood diseases. Donation is painful, but rarely has lasting adverse effects. Patients can accept transplants only from donors with compatible immune systems. Those lacking a sibling match must seek donations from the general population. The probability that two unrelated persons are compatible is less than 1/10,000. Health authorities maintain a registry of several million genetically tested potential donors who agree to donate if asked. We find that the benefits of adding registrants of every race exceed costs. We also explore the peculiar structure of voluntary public good provision that faces potential donors.