Specialty Versus Community Hospitals: Referrals, Quality, And Community Benefits

Abstract

In this paper we compare physician referral patterns, quality, patient satisfaction, and community benefits of physician-owned specialty versus peer competitor hospitals. Our results are based on evidence gathered from site visits to six markets, 2003 Medicare claims, patient focus groups, and Internal Revenue Service data. Although physicianowners are more likely than others to refer to their own facilities and treat a healthier population, there are rationales for these patterns aside from motives for profit. Specialty hospitals provide generally high-quality care to satisfied patients. Uncompensated care plus specialty hospitals' taxes represent a greater burden, in percentage terms, than community benefits provided by nonprofit providers. [Health Affairs 25, no. 1 (2006): 106-118] A s pa rt o f t h e m e d i c a r e p r e s c r i p t i o n d ru g, Improvement, and Modernization Act (MMA) of 2003, Congress established an eighteenmonth moratorium on the development and expansion of new physicianowned specialty hospitals. The central concern among policymakers is whether these hospitals enjoy an unfair competitive advantage relative to other community hospitals. During the moratorium, Congress required the Medicare Payment Advisory Commission (MedPAC) and the Centers for Medicare and Medicaid Services (CMS) to report on two different aspects of this issue. At issue is whether specialty hospitals' physician-owners are able to control the referral of patients, choosing between their own facilities and other hospitals in the community, in a way that results in favorable selection. Other related issues are whether specialty hospitals provide high-quality care, how their patients perceive care, and what types of community benefits they contribute in their markets. Although the con-1 0 6 J a n u a r y / F e b r u a r y 2 0 0 6

A (Blurry) Vision of the Future: How Leader Rhetoric about Ultimate Goals Influences Performance

“…We included the share of patients on Medicaid because Medicaid patients tend to have more serious diseases than otherwise comparable patients. Since more specialized hospitals have a more differentiated focus and may perform at a higher level (Clark & Huckman, 2012), we controlled for specialization by calculating the ratio of the patient volume in the hospital's largest service line to the hospital's total volume (Greenwald et al, 2006). Finally, in order to capture the extent to which hospitals are able to attract better nurses and doctors, we included each hospital's magnet status (yes/no) and its presence (or absence) on any of the U.S. News and World Report hospital rankings in 16 specialty areas.…”

From ‘Solution Shop’ Model To ‘Focused Factory’ In Hospital Surgery: Increasing Care Value And Predictability

“…The Hybrid Model Our hybrid model, combining focused factory and solution shop, also addressed criticisms that the focused-factory model as represented in stand-alone specialty surgery hospitals fragments care; 26,27 cherrypicks low-risk, high-revenue patients, 28 putting full-service hospitals at an economic disadvantage; [29][30][31] is unable to support patients with complications; 29,32 and, if incentives are misaligned, can increase the cost and lower the quality of care. 29,31,32 With our hybrid structure-a focused factory operating in parallel with a solution shop-care is comprehensive.…”

“…29,31,32 With our hybrid structure-a focused factory operating in parallel with a solution shop-care is comprehensive. Particularly with an electronic health record system that supports the longitudinal management of patient data, all patient needs can be readily supported by having the solution shop as an available resource, and potential conflict of interest is avoided.…”

Linkages Between Utilization of Prostate Surgical Pathology Services and Physician Self-Referral

“…physician referral patterns and outcomes (Greenwald et al, 2006). 1 MedPAC and the Center for Studying Health System Change frequently follow a similar research design to study nascent market trends (MedPAC, 2009;Reschovsky et al, 2010).…”

“…Although this study design might raise questions regarding generalizability, it is frequently adopted to evaluate nascent market trends. Others including CMS, MedPAC, and the Center for Studying Health Systems Change routinely follow similar sample selection strategies in their investigations of emergent market trends (MedPAC 2009;Greenwald et al, 2006). This approach was adopted after carefully evaluating and subsequently ruling out other alternatives.…”