Study: Physician-owned limited-service hospitals driving up health care costs

Employers and health plans in three communities that have observed significant growth in physician-owned specialty hospitals - Indianapolis, Little Rock and Phoenix - say the limited-service hospitals are creating an uneven playing field for hospital competition that is driving up health care costs, according to a study released Jan. 25 by the Center for Studying Health System Change (HSC). The health care purchasers said they are concerned about the opportunity for physician owners to induce demand through self-referral, “cherry pick” patients and threaten the ability of full-service hospitals to subsidize uncompensated care and other services. “While purchasers are predisposed to favoring increased competition to help keep prices low, what we heard generally from health plans and employers is that specialty hospitals are contributing to higher costs without any clear quality benefits,” said HSC President Paul Ginsburg.

[ via AHA News ]