Market power and contract form: Evidence from physician group practices

Robert Town, Roger Feldman, John Kralewski

Research output: Contribution to journalArticlepeer-review

10 Scopus citations


We examine how the market power of physician groups affects the form of their contracts with health insurers. We develop a simple model of physician contracting based on 'behavioral economics' and test it with data from two sources: a survey of physician group practices in Minnesota; and the physician component of the Community Tracking Survey. In both data sets we find that increases in groups' market power are associated with proportionately more fee-for-service revenue and less revenue from capitation.

Original languageEnglish (US)
Pages (from-to)115-132
Number of pages18
JournalInternational journal of health care finance and economics
Issue number2
StatePublished - Jun 2011

Bibliographical note

Funding Information:
This work was supported by the Agency for Health Care Quality Research.


  • Contracts
  • Market power
  • Physicians


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