Hospital-physician Integration and Hospital Costs

The integration of physicians into the management and policy-making structure of the hospital has been widely touted as necessary to achieve organizational efficiencies in a changing health care environment. This paper examines the implications of five such integrative strategies for hospital costs. Our findings indicate that greater administrative participation by physicians is consistently related to higher costs. We also found that other integrative strategies are associated with higher hospital costs in specific types of hospitals. We discuss the implications of our findings for hospital managers and policy makers.