Health Care Management Papers

Document Type

Working Paper

Date of this Version


Publication Source

Hosted by University of California Berkeley, Economics Department


Physician ownership of hospitals involves several competing economic forces. Physician-owners may be incentivized to "cherry-pick" and treat profitable patients at their facilities. However, physician-owned hospitals are often specialized and may provide higher-quality care. This paper uses a structural choice-outcome model to estimate hospital quality, patient-hospital matching, and preferences for treating patients at owned vs. competing hospitals. Instrumental variables analysis of cardiac mortality is used to capture quality; I document a significant mortality improvement at physician-owner preferences; controlling for matching and baseline patient preferences, there is little evidence of physician-owner cherry-picking.


This is a working paper, not accepted for publication or review.



Date Posted: 27 November 2017