TY  - JOUR
AU  - David,Guy
AU  - Rawley,Evan
AU  - Polsky,Daniel
TI  - Integration and Task Allocation: Evidence from Patient Care
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 17419
PY  - 2011
Y2  - September 2011
UR  - http://www.nber.org/papers/w17419
L1  - http://www.nber.org/papers/w17419.pdf
N1  - Author contact info:
Guy David
The Wharton School
University of Pennsylvania
202 Colonial Penn Center
3641 Locust Walk
Philadelphia, PA 19104-6218
Tel: 215/573-5780
Fax: 215/573-2157
E-Mail: gdavid2@wharton.upenn.edu

Evan Rawley
The Wharton School
University of Pennsylvania
2000 Steinberg Hall-Dietrich Hall
3620 Locust Walk
Philadelphia, PA
19104-6370
Tel: 215-746-2047
E-Mail: erawley@columbia.edu

Daniel Polsky
University of Pennsylvania School of Medicine
Division of General Internal Medicine
423 Guardian Drive, Blockley Hall, Rm 1212
Philadelphia, PA 19104
E-Mail: polsky@mail.med.upenn.edu
AB  - We develop a formal model to show how integration solves task allocation problems between organizations and test the predictions of the model, using a large and rich patient-level dataset on hospital discharges to nursing homes and home health care. As predicted by the theory, we find that vertical integration allows hospitals to shift patient recovery tasks downstream to lower cost delivery systems by discharging patients earlier and in poorer health, and integration leads to greater post-hospitalization service intensity. While integration facilitates a shift in the allocation of tasks, health outcomes are no worse when patients receive care from an integrated provider. The evidence suggests that by improving the allocation of tasks, integration solves coordination problems that arise in market exchange.
ER  -