THE ECONOMIC RETURNS TO HOSPITAL ADMITTING PRIVILEGES

Legal suits contesting the denial or termination of hospital staff pri vileges are the most common antitrust cases involving medical markets. There is, however, very little evidence about the economic implicatio ns for the physicians of having staff privileges. Using a nationally r epresentative sample of self-employed physicians from 1992, this artic le presents estimates of the effects of hospital admitting privileges on physician earnings. The results indicate that for nonprimary care s pecialists with few admitting privileges, gaining an additional privil ege increases earnings. This effect diminishes as the number of admitt ing privileges increases, however, and there are no economic gains bey ond having three to four admitting privileges. Among primary care phys icians, we detect no statistically significant effect of hospital admi tting privileges on earnings. With the growing emphasis on managed car e, physicians are being scrutinized both in terms of the quality of ca re they deliver and their impact on the economic performance of hospit als and managed care organizations. This suggests that the frequency o f lawsuits involving the denial or rescission of medical staff privile ges may assume even greater importance.