The Role of Physicians in Hospital Production

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Abstract
We use a translog production function approach to examine the effects of medical staff physicians on hospital production, and how their effects differ in teaching and non-teaching hospitals. In teaching hospitals, we also focus on the special role of medical residents. We find that physicians have a strong positive influence on the productivity of other inputs, and that they are substitutes for other resources. Controlling for patient casemix causes significant changes in estimated marginal products; those of labor inputs increase and that of capital declines. The implications of our findings for policy are explored.

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