The Effect of Organizations on Physician Prescribing: The Case of Opioids

In theory, there are several reasons why physician organizational form might affect the price, quantity, and quality of physician services. In this paper, we examine the association between three aspects of physician organizational form and opioid prescribing: solo versus group practice; integration with a hospital versus independent practice; and the average age of the other physicians in the physician’s group. We present three key findings. First, physicians who switch from solo to group practice, particularly large-group practice, significantly reduce their prescribing relative to those who stay in solo practice. Conversely, physicians who switch from group to solo practice significantly increase their prescribing by approximately the same amount. Second, physicians who switch from independent to hospital-integrated practice (and those who switch from integrated to independent practice) generally do not significantly change their prescribing. Third, among group-practice physicians, there are significant differences in prescribing by the average of age of physicians in the group, holding constant the physician’s own age and other characteristics of the group, the physician, and the physician’s patients. Physicians in groups with a higher average age (excluding the index physician) prescribe more intensively and are more likely to write inappropriate opioid prescriptions than physicians in younger groups – holding other factors constant.