Hospital Employment of Physicians and Supply Chain Performance: An Empirical Investigation

As hospital employment of physicians becomes increasingly common in the US, there is speculation as to whether this type of arrangement will promote hospital operating efficiency in such areas as supply chain management. Drawing from both agency and stewardship theories, we examined whether hospitals with a higher proportion of employed medical staff members had relatively better supply chain performance on two measures, supply chain expenses and inventory costs. We examined the effects of both the proportion of total medical staff members as well as the proportion of employed medical staff members within key physician subgroups. We conducted the study using a pooled, cross sectional sample of hospitals located in California between 2007 and 2009. Key data sources were annual financial reports that hospitals in California are required to complete and the American Hospital Association annual survey of hospitals. We analyzed the data using univariate and multivariate approaches including generalized estimat...