“Corporate Ownership and Firm Performance: Evidence from Fertility Clinics” with Julia Bodner
Abstract: Corporate investors are often credited with boosting the performance of acquired firms but have also been criticized for generating profits at the expense of consumer well-being. This tension between shareholder and stakeholder interests is particularly evident in the healthcare sector, where information frictions can contribute to underinvestment in quality. This paper finds that corporate ownership can improve healthcare outcomes in a setting where patients have access to service pricing and quality information – the market for In Vitro Fertilization (IVF). We construct a novel dataset on US fertility clinic chains between 2004 and 2018, during which time chain ownership grew from 5% to 20%. Estimates from a difference-in-differences model show that post-transaction clinic volume increases by 25.8%, and IVF success rates increase by 7.0%. Direct ownership of clinics drives this increase in IVF success rates: acquired clinics exhibit a 13.6% increase, while affiliated clinics experience no change. We also provide evidence that fertility chains implement changes to clinic processes and procedures that enhance quality, lead to larger improvements among underperforming clinics, and expand the IVF market instead of capturing market share from independent clinics.
Work in Progress
“Hospital Acquisitions and Management Practices: Implications for Patient Health” with Emma Boswell Dean and Farnam Mohebi
Study on hospital gaming of Medicare and impact on costs, patients, and the hospital market with Atul Gupta and Adam Sacarny
Study on unexpected physician deaths and the impact on peer decision-making and personnel changes with Mathijs De Vaan
Study of gender and peer effects in the operating room with Solène Delecourt
Yu, J., Bond, A., Braun, R. T., La Forgia, A., RoyChoudhury, A., Zhang, M., Kim., J, & Casalino, L. (2023). Physician Management Companies and Neonatology Prices, Utilization, and Adverse Clinical Outcomes. Pediatrics.
La Forgia, A. (2022). The Impact of Management on Clinical Performance: Evidence from Physician Practice Management Companies. Management Science.
–AOM William H. Newman Award Finalist, 2020; AOM HCM Division Best Paper Award, 2020; AOM HCM Best Paper Based on a Dissertation Award, 2020; Industry Studies Association’s Giarratani Rising Star Award, 2020
La Forgia, A., Bond, A., Braun, R. T., Yao, L. Kjaer, K., Zhang, M., & Casalino, L. (2022). Association of Physician Management Companies and Private Equity Investment With Commercial Health Care Prices Paid to Anesthesia Practitioners. JAMA Internal Medicine.
– Media Coverage: ModernHealthcare, HealthcareDive, Becker’s Hospital Review, JAMA Podcast, Wall Street Journal
La Forgia, A., Bond, A., Braun, R. T., Kjaer, K., Zhang, M., & Casalino, L. (2021). Association of Surprise Billing Legislation with Prices Paid to In-Network and Out-of-Network Anesthesiologists in California, Florida, and New York. JAMA Internal Medicine.
– Media Coverage: U.S. News and World Report, BenefitsPro, Kaiser Health News
La Forgia, A. (2020). The Impact of Acquisitions on Clinical Decisions: Evidence from Physician Practice Management Companies. Proceedings of the Eightieth Annual Meeting of the Academy of Management.
La Forgia, A., Maeda, J. L., & Banthin, J. S. (2017). Are Integrated Plan Providers Associated with Lower Premiums on the Health Insurance Marketplaces? Medical Care Research and Review.
– Media Coverage: The New York Times Upshot
La Forgia, A., & Burns, L. R. (2017). Health Insurance in China. In L.R Burns & G. Liu (Eds.), China’s Health Care System and Reform (pp. 291-320). Cambridge, UK: Cambridge University Press.
Interviews, News, and Popular Press
Bichell, Rae Ellen. (October 12, 2022). Routine births are turning into moneymaking ‘emergency’ events at hospitals that work with private equity-backed staffing companies. Fortune.
Anesthesia Practice Management Success with Justin Harvey, Episode 154. (July 18, 2022). Here’s What Happens To Anesthesia Contracts When Private Practices Get Bought Out w. Dr. Ambar La Forgia.
Tribble, Sarah Jane. (June 15, 2022). Buy and Bust: When Private Equity Comes for Rural Hospitals. Kaiser Health News.
Krupp, Lexi. (March 22, 2022). Vermont’s largest hospital system and a massive insurance company are deadlocked. Thousands of patients are caught in the middle. Vermont Public Radio.