The Relationship Between Hospital Affiliation and Patient Welfare

Date of Award


Document Type

Restricted (Opt-Out)



First Advisor

Alicia Dang




Healthcare, hospital market dynamics, monopoly, hospital affiliation, hospital system, iron triangle


Healthcare is a unique industry due to the high-level of governmental involvement and its importance to national economies and wellness. Policies that result in low reimbursement rates, low patient volumes, staffing shortages, and strict regulations have led many hospitals, primarily rural ones, to precipice of closure. Losing a hospital can be damaging for a community as it can greatly reduce access to care, worsen the quality of care, and increase healthcare costs overall. Many hospitals choose to affiliate with other provider organizations in order to avoid closure and/or improve their finances. While agreements can supply hospitals with additional resources, affiliation can also rob rural hospitals of their autonomy. This hinders hospitals' ability to address the needs of the communities that they serve. Additionally, health systems using hospital affiliation to expand into new markets exhibit, monopolistic behavior through horizontal integration. The effects of the affiliation trend have been studied more commonly from the hospital's perspective, as opposed to the patient's. Thus, this paper will investigate how hospital affiliation affects patient welfare. Patient welfare is defined along three axes, cost, access, and quality. A panel regression analysis was used to uncover the result of hospital affiliation on these three categories. The analysis showed that costs increase, access increased, and quality decreased.

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