Effects of physician-owned specialized facilities in health care: a systematic review

Ethical Considerations Surrounding Surgeon Ownership of Ambulatory Surgery Centers

As surgical care continues to transition to an outpatient setting, ambulatory surgery centers (ASCs) present favorable options for physician investment. As of 2017, more than 90% of ASCs have at least some physician ownership, with 64% solely physician-owned. Yet, physician ownership creates an inherent conflict of interest known as dual agency, where clinicians have a personal financial stake in addition to their obligation towards patient well-being. Here, we assess the ethical considerations surrounding dual agency in the setting of ASCs through the lens of beneficence, nonmaleficence, autonomy, and justice. We further propose strategies for appropriate navigation of such situations, including disclosure of ownership status, instruction on unfamiliar techniques, and adherence to accepted clinical practice guidelines for materials selection and surgical indications.

The association between hospital ownership and postoperative complications: Does it matter who owns the hospital?

Postoperative complications place a major burden on the healthcare systems. The type of hospital's ownership could be one factor associated with this adverse outcome. Using CMS's publicly available "Complications and Deaths-Hospitals" and "Hospital General Information" datasets, we analyzed the association between four postoperative complications (venous thromboembolism, joint replacement complications, wound dehiscence, postoperative sepsis) and hospital ownership. These data were collected by Medicare between April 2013 and March 2016. We found a significant association (p = 0.029) between ownership types and the postoperative complication score. A 6-percent drop in the share of not-for-profit ownership, accompanied by a 3-percent increase in each of the government and for-profit ownership, resulted in a 20-percent drop in postoperative complication scores (from 5.75 to 4.6). There is an association between hospital ownership type and postoperative complications. Creating this awareness in leadership should prompt for redesigning of hospitals' operations and workflows to become more compatible with safe and effective care delivery.

Conflicts of interest in dialysis: A barrier to policy reforms

Conflicts of interest involving physicians are commonplace in the US, occurring across many different specialties and subspecialties in a variety of clinical settings. In nephrology, two important scenarios in which conflicts of interest arise are dialysis facility joint venture (JV) arrangements and financial participation in End-stage Kidney Disease Seamless Care Organizations (ESCOs). Whether conflicts of interest occurring in either of these settings influence decision-making or patient care outcomes is not known due to a lack of transparent, publicly available information, and opportunities to conduct independent study. We discuss possible benefits and risks of nephrologist's financial participation in JVs and ESCOs and possible mechanisms for disclosure and reporting of such arrangements as well as risk mitigation.

How operations matters in healthcare standardization

Purpose

Process management approaches all pursue standardization, of which evidence-based medicine (EBM) is the most common form in healthcare. While EBM addresses improvement in clinical performance, it is unclear whether EBM also enhances operational performance. Conversely, operational process standardization (OPS) does not necessarily yield better clinical performance. The authors have therefore looked at the relationship between clinical practise standardization (CPS) and OPS and the way in which they jointly affect operational performance. The paper aims to discuss this issue.

Design/methodology/approach

The authors conducted a comparative case study analysis of a cataract surgery treatment at five Belgium hospital sites. Data collection involved 218 h of observations of 274 cataract surgeries. Both qualitative and quantitative methods were used.

Findings

Findings suggest that CPS does not automatically lead to improved resource or throughput efficiency. This can be explained by the low level of OPS across the five units, notwithstanding CPS. The results indicate that a wide range of variables on different levels (patient, physician and organization) affect OPS.

Research limitations/implications

Considering one type of care treatment in which clinical outcome variations are small complicates translating the findings to unstructured and complex care treatments.

Originality/value

With the introduction of OPS as a complementary view of CPS, the study clearly shows the potential of OPS to support CPS in practice. Operations matters in healthcare standardization, but only when it is managed in a deliberate way on a hospital and policy level.

Do independent treatment centers offer more value than general hospitals? The case of cataract care

OBJECTIVE

To identify differences between independent treatment centers (ITCs) and general hospitals (GHs) regarding costs, quality of care, and efficiency.

DATA SOURCES

Anonymous claims data (2013-2015) were used. We also obtained quality indicators from a semipublic platform.

STUDY DESIGN

This study uses a comparative multilevel analysis, controlling for case mix, to evaluate the performance of ITCs and GHs for patients diagnosed with cataract.

DATA COLLECTION

Reimbursement claims were extracted from existing claims databases of the largest Dutch health insurer. Quality indicators were obtained by external agencies through a mixed-mode survey.

PRINCIPAL FINDINGS

There are no stark differences in complexity of cases for cataract care. ITCs seem to perform surgeries more frequently per care pathway, but conduct a lower number of health care activities per surgical claim. Total average costs are lower in ITCs compared with GHs, but when adjusted for case mix, the differences in costs are lower. The findings with the adjusted quality differences suggest that ITCs outperform GHs on patient satisfaction, but patients' outcomes are similar.

CONCLUSION

This finding supports the postulation-based on the focus factory theory-that ITCs can provide more value for cataract care than GHs.

Is there a volume-quality relationship within the independent treatment centre sector? A longitudinal analysis

BACKGROUND

The number of independent treatment centres (ITCs) has grown substantially. However, little is known as to whether the volume-quality relationship exists within this sector and whether other possible organisational factors mediate this relationship. The aim of this study is to gain a better understanding of such possible relationships.

METHODS

Data originate from the Dutch Health and Youth Care Inspectorate (IGJ) and the Dutch Patients Association. We used longitudinal data from 4 years (2014-2017) including three different quality measures: 1) composite of structural and process indicators, 2) postoperative infections, and 3) patient satisfaction. We measured volume by the number of invasive treatments. We adjusted for three important organisational characteristics: (1) size of workforce, (2) chain membership, and (3) ownership status. For statistical inference, random effects analysis was used. We also ran several robustness checks for the volume-quality relationship, including a fractional logit model.

RESULTS

ITCs with higher volumes scored better on structure, process and outcome (i.e. postoperative infections) indicators compared to the low-volume ITCs - although only marginally on outcome. However, ITCs with higher volumes do not have higher patient satisfaction. There is a decreasing marginal effect of volume - in other words, an L-shaped curve. The effect of the intermediating structural factors on the volume-quality relationship (i.e. workforce size, chain membership and ownership status) is less clear. Our findings suggest that chain membership has a negative influence on patient satisfaction. Furthermore, for-profit providers scored better on the Net Promoter Score.

CONCLUSIONS

Our study shows with some certainty that the quality of care in low-volume ITCs is lower than in high-volume ITCs as measured by structural, process and outcome (i.e. postoperative infection) indicators. However, the size of the effect of volume on postoperative infections is small, and at higher volumes the marginal benefits (in terms of lower postoperative infections) decrease. In addition, volume is not related to patient satisfaction. Furthermore, the association between the structural intermediating factors and quality are tenuous.

Evaluation of costs and outcomes of physician-owned hospitals across common surgical procedures

INTRODUCTION

The Affordable Care Act introduced restrictions on the creation of new physician-owned hospitals (POH). We sought to define whether POH status was associated with differences in care.

METHODS

Patients undergoing one of ten surgical procedures were identified using Medicare Standard Analytic Files. Patient and hospital-level characteristics and outcomes between POH and non-POH were compared.

RESULTS

Among 1,255,442 patients identified, 14,560 (1.2%) were treated at POH. A majority of POHs were in urban areas (n = 30, 90.9%) and none were in low socioeconomic status areas. Patients at POH were slightly younger (POH:72, IQR:68-77 vs. non-POH:73, IQR:69-79) and healthier (CCI; POH:2; IQR: 1-3 vs. non-POH: 3; IQR: 1-4). Patients at non-POH had higher odds of postoperative complications (OR:1.67, 95%CI:1.55-1.80) and slightly higher medical expenditures (POH:$11,347, IQR:$11,139-$11,936 vs. non-POH:$13,389, IQR:$11,381-$19,592).

CONCLUSIONS

POH were more likely to be located in socioeconomic advantaged areas, treat healthier patients and have lower associated expenditures.

A Novel, Synergistic Model in Total Joint Arthroplasty: A Report of 2 Specialty Hospitals With Joint Ownership Between Physicians and Healthcare Systems

BACKGROUND

In 2010, the Affordable Care Act introduced new restrictions on the expansion of physician-owned hospitals (POHs) due to concerns over financial incentives and increased costs. The purpose of this study is to determine whether joint ventures between tertiary care and specialty hospitals (SHs) allowing physician ownership (POHs) have improved outcomes and lower cost following THA and TKA.

METHODS

After institutional review board approval, a retrospective review of consecutive series of primary THA and TKA patients from 2015 to 2016 across a single institution comprised of 14 full-service hospitals and 2 SHs owned as a joint venture between physicians and their health system partners. Ninety-day episode-of-care claims cost data from Medicare and a single private insurer were reviewed with the collection of the same demographic data, medical comorbidities, and readmission rates for both the SHs and non-SHs. A multivariate regression analysis was performed to determine the independent effect of the SHs on episode-of-care costs.

RESULTS

Of the 6537 patients in the study, 1936 patients underwent a total joint arthroplasty at an SH (29.6%). Patients undergoing a procedure at an SH had shorter lengths of stay (1.29 days vs 2.23 days for Medicare, 1.15 vs 1.86 for private payer, both P < .001), were less likely to be readmitted (4% vs 7% for Medicare, P = .001), and had lower mean 90-day episode-of-care costs ($16,661 vs $20,579 for Medicare, $26,166 vs $35,222 for private payers, both P < .001). When controlling for the medical comorbidities and demographic variables, undergoing THA or TKA at an SH was associated with a decrease in overall episode costs ($3266 for Medicare, $13,132 for private payer, both P < .001).

CONCLUSION

Even after adjusting for a healthier patient population, the joint venture partnership with health systems and physician-owned SHs demonstrated lower 90-day episode-of-care costs than non-SHs following THA and TKA. Policymakers and practices should consider these data when considering the current care pathways.

Maximizing Physician-Hospital Alignment: Lessons Learned From Effective Models of Joint Arthroplasty Care

BACKGROUND

With recent healthcare reform efforts focusing on rewarding value instead of volume, it has become important for orthopedic surgeons to partner and align with their hospitals. We report our experience in aligning clinical and financial incentives with 6 health systems in our geographic area.

METHODS

By managing the entire episode-of-care continuum for total hip and total knee arthroplasty patients, our standardized, evidence-based protocols have improved the quality of care for our joint arthroplasty patients. While most studies focus on cost through insurance claims data, we have been able to accurately determine the costs to our practice and each facility through time-driven activity-based costing.

RESULTS

We have also achieved measureable claims and actual cost reduction by reducing unnecessary care, inappropriate variation in care, and avoidable complications through demand matching, risk stratification, and our nurse navigator program. Our joint ventures with our hospital partners in both specialty hospitals and our ambulatory surgery centers have also been critical to our success.

CONCLUSION

Our experience demonstrates that large private practice groups can successfully align both clinical and financial incentives with healthcare systems to provide quality joint arthroplasty care at a lower cost.

Specialization and production cost efficiency: evidence from ambulatory surgery centers

In the U.S. health care sector, the economic logic of specialization as an organizing principle has come under active debate in recent years. An understudied case is that of ambulatory surgery centers (ASCs), which recently have become the dominant provider of specific surgical procedures. While the majority of ASCs focus on a single specialty, a growing number are diversifying to offer a wide range of surgical services. We take a multiple output cost function approach to an empirical investigation that compares production economies in single specialty ASCs with those in multispecialty ASCs. We applied generalized estimating equation techniques to a sample of Pennsylvania ASCs for the period 2004-2014, including 73 ASCs that specialized in gastrointestinal procedures and 60 ASCs that performed gastrointestinal as well as other specialty procedures. Results indicated that both types of ASC had small room for expansion. In simulation analysis, production of GI services in specialized ASCs had a cost advantage over joint production of GI with other specialty procedures. Our results provide support for the focused factory model of production in the ASC sector.

Specialization as an Organizing Principle: The Case of Ambulatory Surgery Centers

Ambulatory surgery centers (ASCs) recently have grown to become the dominant provider of specific surgical procedures in the United States. While the majority of ASCs focus primarily on a single specialty, many have diversified to offer a wide range of surgical specialties. We exploited a unique data set from Pennsylvania for the years 2004 to 2014 to conduct an empirical investigation of the relative cost of production in ASCs over varying degrees of specialization. We found that for the majority of ASCs, focus on a specialty was associated with lower facility costs. In addition, ASCs appeared to be capturing economies of scale over a broad range of service volume. In contrast to studies of cost efficiency in specialty hospitals, our results provide evidence that supports the focused factory model of production in the ASC sector.

Reconsidering the Affordable Care Act's Restrictions on Physician-Owned Hospitals: Analysis of CMS Data on Total Hip and Knee Arthroplasty

BACKGROUND

Concerns about financial incentives and increased costs prompted legislation limiting the expansion of physician-owned hospitals in 2010. Supporters of physician-owned hospitals argue that they improve the value of care by improving quality and reducing costs. The purpose of the present study was to determine whether physician-owned and non-physician-owned hospitals differ in terms of costs, outcomes, and patient satisfaction in the setting of total hip arthroplasty (THA) and total knee arthroplasty (TKA).

METHODS

With use of the U.S. Centers for Medicare & Medicaid Services (CMS) Inpatient Charge Data, we identified 45 physician-owned and 2,657 non-physician-owned hospitals that performed ≥11 primary TKA and THA procedures in 2014. Cost data, patient-satisfaction scores, and risk-adjusted complication and 30-day readmission scores for knee and hip arthroplasty patients were obtained from the multiyear CMS Hospital Compare database.

RESULTS

Physician-owned hospitals received lower mean Medicare payments than did non-physician-owned hospitals for THA and TKA procedures ($11,106 compared with $12,699; p = 0.002). While the 30-day readmission score did not differ significantly between the 2 types of hospitals (4.48 compared with 4.62 for physician-owned and non-physician-owned, respectively; p = 0.104), physician-owned hospitals had a lower risk-adjusted complication score (2.83 compared with 3.04; p = 0.015). Physician-owned hospitals outperformed non-physician-owned hospitals in all patient-satisfaction categories, including mean linear scores for recommending the hospital (93.9 compared with 87.9; p < 0.001) and overall hospital rating (93.4 compared with 88.4; p < 0.001). When controlling for hospital demographic variables, status as a non-physician-owned hospital was an independent risk factor for being in the upper quartile of all inpatient payments for Medicare Severity-Diagnosis Related Group (MS-DRG) 470 (odds ratio, 3.317; 95% confidence interval, 1.174 to 9.371; p = 0.024), which may be because of a difference in CMS payment methodology.

CONCLUSIONS

Our findings suggest that physician-owned hospitals are associated with lower mean Medicare costs, fewer complications, and higher patient satisfaction following THA and TKA than non-physician-owned hospitals. Policymakers should consider these data when debating the current moratorium on physician-owned hospital expansion.

LEVEL OF EVIDENCE

Therapeutic Level III. See Instructions for Authors for a complete description of levels of evidence.

An Assessment of the Safety of an Orthopedic Specialty Hospital: A 5-Year Experience

One of the goals of orthopedic specialty hospitals is to provide safe and efficient care to medically optimized patients. The authors' orthopedic specialty hospital is a physician-owned, 24-bed facility that accommodates a multispecialty orthopedic practice in the areas of spine, hip and knee arthroplasty, shoulder and elbow, sports, foot and ankle, and hand surgery. The purpose of this study was to examine the first 5 years of an institutional experience with an orthopedic specialty hospital and to determine if any procedures were at increased risk of postoperative transfer. When higher-level emergency treatment was required, patients were appropriately and expeditiously transferred and treated at an acute care facility. Length of stay compared favorably with that in traditional acute care hospitals. The specialty hospital may be an appropriate model for delivery of care to medically screened patients in the United States. [Orthopedics. 2017; 40(4):223-229.].

Service quality and patient experiences of ambulatory care in a specialized clinic vs. a general hospital

OBJECTIVES

Health care organizations are constantly looking for ways to establish a differential advantage to attract customers. To this end, service quality has become an important differentiator in the strategy of health care organizations. In this study, we compared the service quality and patient experience in an ambulatory care setting of a physician-owned specialized facility with that of a general hospital.

METHOD

A comparative case study with a mixed method design was employed. Data were gathered through a survey on health service quality and patient experience, completed with observations, walkthroughs, and photographic material.

RESULTS

Service quality and patient experiences are high in both the investigated health care facilities. A significant distinction can be made between the two facilities in terms of interpersonal quality (p = 0.001) and environmental quality (P ≤ 0.001), in favor of the medical center. The difference in environmental quality is also indicated by the scores given by participants who had been in both facilities. Qualitative analysis showed higher administrative quality in the medical center. Environmental quality and patient experience can predict the interpersonal quality; for environmental quality, interpersonal quality and age are significant predictors.

CONCLUSIONS

Service quality and patient experiences are high in both facilities. The medical center has higher service quality for interpersonal and environmental service quality and is more process-centered.

Are the Affordable Care Act Restrictions Warranted? A Contemporary Statewide Analysis of Physician-Owned Hospitals

BACKGROUND

The Affordable Care Act placed a moratorium on physician-owned hospital (POH) expansion. Concern exists that POHs increase costs and target healthier patients. However, limited historical data support these claims and are not weighed against contemporary measures of quality and patient satisfaction. The purpose of this study was to investigate the quality, costs, and efficiency across hospital types.

METHODS

One hundred forty-five hospitals in a single state were analyzed: 8 POHs; 16 proprietary hospitals (PHs); and 121 general, full-service acute care hospitals (ACHs). Multiyear data from the Centers for Medicare and Medicaid Services Medicare Cost Report and the statewide Health Care Cost Containment Council were analyzed.

RESULTS

ACHs had a higher percentage of Medicare patients as a share of net patient revenue, with similar Medicare volume. POHs garnered significantly higher patient satisfaction: mean Hospital Consumer Assessment of Healthcare Providers and Systems summary rating was 4.86 (vs PHs: 2.88, ACHs: 3.10; P = .002). POHs had higher average total episode spending ($22,799 vs PHs: $18,284, ACHs: $18,856), with only $1435 of total spending on post-acute care (vs PHs: $3867, ACHs: $3378). Medicare spending per beneficiary and Medicare spending per beneficiary performance rates were similar across all hospital types, as were complication and readmission rates related to hip or knee surgery.

CONCLUSION

POHs had better patient satisfaction, with higher total costs compared to PHs and ACHs. A focus on efficiency, patient satisfaction, and ratio of inpatient-to-post-acute care spending should be weighted carefully in policy decisions that might impact access to quality health care.

Length of stay after shoulder arthroplasty-the effect of an orthopedic specialty hospital

BACKGROUND

One potential avenue for the realization of health care savings is reduction in hospital length of stay (LOS). Initiatives to reduce LOS may also reduce infection and improve patient satisfaction. We compare LOS after shoulder arthroplasty at an orthopedic specialty hospital (OSH) and a tertiary referral center (TRC).

METHODS

A single institutional database was used to retrospectively identify all primary shoulder arthroplasties performed between January 1, 2013, and July 1, 2015, at the OSH and TRC. Manually matched cohorts from the OSH and TRC were compared for LOS and readmission rate.

RESULTS

There were 136 primary shoulder arthroplasties performed at the OSH matched with 136 at the TRC during the same study period. OSH and TRC patients were similar in age (P = .949), body mass index (P = .967), Charlson Comorbidity Index (P = 1.000), gender (both 52.21% male), procedure (69.12% total shoulder arthroplasty, 7.35% hemiarthroplasty, and 23.53% reverse shoulder arthroplasty), insurance status (P = .714), and discharge destination (P = .287). Despite equivalent patient characteristics, average LOS at the OSH was 1.31 ± 0.48 days compared with 1.85 ± 0.57 days at the TRC (t = 8.41, P < .0001). Of the 136 OSH patients, 3 (2.2%) required transfer to a TRC. Readmission rates for the OSH patients (2/136, 1.5%) and TRC patients (1/136, 0.7%) were similar (z = 0.585, P = .559).

CONCLUSION

LOS at the OSH was significantly shorter than at the TRC for a strictly matched cohort of patients. This may be a result of fast-track rehabilitation and strict disposition protocols at the OSH. With rising shoulder arthroplasty demand, utilization of an OSH may be a safe avenue to delivery of more efficient and effective orthopedic care.

Physician-Owned Surgical Hospitals Outperform Other Hospitals in Medicare Value-Based Purchasing Program

BACKGROUND

The Hospital Value-Based Purchasing Program measures value of care provided by participating Medicare hospitals and creates financial incentives for quality improvement and fosters increased transparency. Limited information is available comparing hospital performance across health care business models.

STUDY DESIGN

The 2015 Hospital Value-Based Purchasing Program results were used to examine hospital performance by business model. General linear modeling assessed differences in mean total performance score, hospital case mix index, and differences after adjustment for differences in hospital case mix index.

RESULTS

Of 3,089 hospitals with total performance scores, categories of representative health care business models included 104 physician-owned surgical hospitals, 111 University HealthSystem Consortium, 14 US News & World Report Honor Roll hospitals, 33 Kaiser Permanente, and 124 Pioneer accountable care organization affiliated hospitals. Estimated mean total performance scores for physician-owned surgical hospitals (64.4; 95% CI, 61.83-66.38) and Kaiser Permanente (60.79; 95% CI, 56.56-65.03) were significantly higher compared with all remaining hospitals, and University HealthSystem Consortium members (36.8; 95% CI, 34.51-39.17) performed below the mean (p < 0.0001). Significant differences in mean hospital case mix index included physician-owned surgical hospitals (mean 2.32; p < 0.0001), US News & World Report honorees (mean 2.24; p = 0.0140), and University HealthSystem Consortium members (mean 1.99; p < 0.0001), and Kaiser Permanente hospitals had lower case mix value (mean 1.54; p < 0.0001). Re-estimation of total performance scores did not change the original results after adjustment for differences in hospital case mix index.

CONCLUSIONS

The Hospital Value-Based Purchasing Program revealed superior hospital performance associated with business model. Closer inspection of high-value hospitals can guide value improvement and policy-making decisions for all Medicare Value-Based Purchasing Program Hospitals.

Ambulatory Surgery Centers and Prices in Hospital Outpatient Departments

Specialty providers claim to offer a new competitive benchmark for efficient delivery of health care. This article explores this view by examining evidence for price competition between ambulatory surgery centers (ASCs) and hospital outpatient departments (HOPDs). I studied the impact of ASC market presence on actual prices paid to HOPDs during 2007-2010 for four common surgical procedures that were performed in both provider types. For the procedures examined, HOPDs received payments from commercial insurers in the range of 3.25% to 5.15% lower for each additional ASC per 100,000 persons in a market. HOPDs may have less negotiating leverage with commercial insurers on price in markets with high ASC market penetration, resulting in relatively lower prices.

Provider accountability as a driving force towards physician-hospital integration: a systematic review

BACKGROUND

Hospitals and physicians lie at the heart of our health care delivery system. In general, physicians provide medical care and hospitals the resources to deliver health care. In the past two decades many countries have adopted reforms in which provider financial risk bearing is increased. By making providers financially accountable for the delivered care integrated care delivery is stimulated.

PURPOSE

To assess the evidence base supporting the relationship between provider financial risk bearing and physician-hospital integration and to identify the different types of methods used to measure physician-hospital integration to evaluate the functional value of these integrative models.

RESULTS

Nine studies met the inclusion criteria. The evidence base is mixed and inconclusive. Our methodological analysis of previous research shows that previous studies have largely focused on the formal structures of physician-hospital arrangements as an indicator of physician-hospital integration.

CONCLUSION

The link between provider financial risk bearing and physician-hospital integration can at this time be supported merely on the basis of theoretical insights of agency theory rather than empirical research. Physician-hospital integration measurement has concentrated on the prevalence of contracting vehicles that enables joint bargaining in a managed care environment but without realizing integration and cooperation between hospital and physicians. Therefore, we argue that these studies fail to shed light on the impact of risk shifting on the hospital-physician relationship accurately.