Hospital-employed physicians performed more services in costlier hospital outpatient settings, resulting in up to 27% higher costs for Medicare and 21% for patients.
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Abstract
Hospitals employ an increasing number of physicians and bill for a growing share of outpatient procedures. We exploit a plausibly exogenous increase in Medicare prices for hospital-employed physicians relative to Medicare prices for other physicians to show that payer reimbursement rules explain part of this trend.
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