Download eBook for Free

FormatFile SizeNotes
PDF file 1.4 MB

Use Adobe Acrobat Reader version 10 or higher for the best experience.

Principal-agent concerns have led to a patchwork of medical regulations, including prohibitions on certain provider financial arrangements. However, ambulatory surgery centers (ASCs), which compete with hospitals, have physician investors that are controversially shielded from such "anti-kickback" laws. It is unknown whether ASC ownership perversely affects physician behavior. We combine novel facility ownership data with all-payer hospital discharge data as well as a 100% sample of Medicare claims to show that physicians strongly substitute away from hospital settings toward ASCs following their investments. We find no evidence of patient cream skimming or care quality erosion. Medicare, specifically, spends less on net.

Research conducted by

This research was conducted by RAND Health Care.

This report is part of the RAND Corporation Working paper series. RAND working papers are intended to share researchers' latest findings and to solicit informal peer review. They have been approved for circulation by RAND but may not have been formally edited or peer reviewed.

This document and trademark(s) contained herein are protected by law. This representation of RAND intellectual property is provided for noncommercial use only. Unauthorized posting of this publication online is prohibited; linking directly to this product page is encouraged. Permission is required from RAND to reproduce, or reuse in another form, any of its research documents for commercial purposes. For information on reprint and reuse permissions, please visit

The RAND Corporation is a nonprofit institution that helps improve policy and decisionmaking through research and analysis. RAND's publications do not necessarily reflect the opinions of its research clients and sponsors.