Utilization changes following market entry by physician-owned specialty hospitals

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.

Short-term Outcomes of Total Knee Arthroplasty Performed at an Orthopedic Specialty Hospital

This study compared perioperative outcomes for total knee arthroplasty (TKA) at an orthopedic specialty hospital and a tertiary referral center. The authors identified all primary TKA procedures performed in 2014 at the 2 facilities. Each patient at the orthopedic specialty hospital was manually matched to a patient at the tertiary referral center according to demographic and clinical variables. Matching was blinded to outcomes. Outcomes were 90-day readmission, mortality rate, reoperation, length of stay, and use of inpatient rehabilitation. Each group had 215 TKA patients. The 2 groups of patients were similar in age (66.8 years, P=.98), body mass index (30.4 kg/m², P=.99), age-adjusted Charlson Comorbidity Index (3.4, P=1.00), and sex (46.0% male, P=1.00). Mean length of stay was 1.47±0.62 days at the orthopedic specialty hospital vs 1.87±0.75 days (P<.01) at the tertiary referral center. There were 3 readmissions at the orthopedic specialty hospital and 6 readmissions at the tertiary referral center (P=.31). There were 6 reoperations at the orthopedic specialty hospital and 5 at the tertiary referral center (P=.76). In addition, 8 patients at the orthopedic specialty hospital used inpatient rehabilitation vs 15 patients at the tertiary referral center (P=.08). One patient who was treated at the orthopedic specialty hospital required transfer to a tertiary referral center. This study found that perioperative outcomes were similar for matched patients who underwent primary TKA at an orthopedic specialty hospital and a tertiary referral center. Patients treated at the orthopedic specialty hospital spent 0.4 fewer days in the hospital compared with matched patients who were treated at the tertiary referral center. This equals 2 fewer hospital nights for every 5 TKA patients. [Orthopedics. 2018; 41(1):e84-e91.].

Medical costs, Cesarean delivery rates, and length of stay in specialty hospitals vs. non-specialty hospitals in South Korea

Background

Since 2011, specialty hospitals in South Korea have been known for providing high- quality care in specific clinical areas. Much research related to specialty hospitals and their performance in many such areas has been performed, but investigations about their performance in obstetrics and gynecology are lacking. Thus, we aimed to compare specialty vs. non-specialty hospitals with respect to mode of obstetric delivery, especially the costs and length of stay related to Cesarean section (CS) procedures, and to provide evidence to policy-makers for evaluating the success of hospitals that specialize in obstetric and gynecological (OBGYN) care.

Methods

We obtained National Health Insurance claim data from 2012 to 2014, which included information from 418,141 OBGYN cases at 214 hospitals. We used a generalized estimating equation model to identify a potential association between the likelihood of CS at specialty hospitals compared with other hospitals. We also evaluated medical costs and length of stay in specialty hospitals according to type of delivery.

Results

We found that 150,256 (35.9%) total deliveries were performed by CS. The odds ratio of CS was significantly lower in specialty hospitals (OR: 0.95, 95% CI: 0.93–0.96compared to other hospitals Medical costs (0.74%) and length of stay (1%) in CS cases increased in specialty hospitals, although length of stay following vaginal delivery was lower (0.57%) in specialty hospitals compared with other hospitals.

Conclusions

We determined that specialty hospitals are significantly associated with a lower likelihood of CS delivery and shorter length of stay after vaginal delivery. Although they are also associated with higher costs for delivery, the increased cost could be due to the high level of intensive care provided, which leads to improve quality of care. Policy-makers should consider incentive programs to maintain performance of specialty hospitals and promote efficiency that could reduce medical costs accrued by patients.

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.

Total Ankle Arthroplasty: Comparing Perioperative Outcomes When Performed at an Orthopaedic Specialty Hospital Versus an Academic Teaching Hospital

BACKGROUND

The number of total ankle arthroplasties (TAAs) performed in the United States has risen significantly in recent years, as has utilization of orthopaedic specialty hospital (OSH) to treat healthy patients undergoing elective surgery. The purpose of this study was to compare postoperative outcomes following TAA at an OSH when compared with a matching population of patients undergoing TAA at an academic teaching hospital (ATH).

METHODS

We identified all TAA from January 2014 to December 2014 at the OSH and January 2010 to January 2016 at the ATH. Each OSH patient was manually matched with a corresponding ATH patient by clinical variables. Outcomes analyzed were length of stay (LOS), 30-day readmissions, mortality, reoperation, and inpatient rehabilitation utilization.

RESULTS

There were 40 TAA patients in each group. OSH and ATH patients were similar in age, body mass index, age-adjusted Charlson Comorbidity Index, and gender. Average LOS for TAA at the OSH was 1.28 ± 0.51 compared with 2.03 ± 0.89 (P < .001) at the ATH. There were no OSH patients readmitted within 30 days, compared with 2 ATH patients readmitted (5.0%; P = .15). Two OSH patients (5.0%) and 2 ATH patients (5.0%; P = 1.00) required reoperation. There were no mortalities in either group. There were no OSH patients requiring transfer.

CONCLUSIONS

Primary TAA performed at an OSH had significantly shorter LOS when compared with a matched patient treated at an ATH with no significant difference in readmission or reoperation rates and may offer a potential source of significant health care savings.

LEVELS OF EVIDENCE

Level III: Retrospective cohort study.

Comparison of Short-Term Outcomes After Total Hip Arthroplasty Between an Orthopedic Specialty Hospital and General Hospital

BACKGROUND

The purpose of this study is to compare perioperative outcomes for total hip arthroplasty (THA) at an orthopedic specialty hospital (OSH) and a general hospital (GH).

METHODS

A retrospective study of all primary THAs was performed at an OSH and GH in 2014. A cohort of GH patients was manually matched to the OSH by clinical and demographic variables blinded to outcome. These matched groups were then unblinded and compared by length of stay (LOS), 90-day readmissions, mortality, reoperations, and inpatient rehabilitation utilization.

RESULTS

The 329 THAs at the OSH were matched with 329 THAs at the GH. Average LOS for THA at the OSH was 1.10 ± 0.51 days compared with 1.27 ± 0.93 (P = .004) at the GH. There were 2 OSH readmissions vs 5 GH readmissions (P = .25). There were 3 OSH reoperations vs 4 GH reoperations (P = .70). There were no mortalities. Three OSH patients used inpatient rehabilitation vs 13 GH patients (P = .011). When GH outlier and rehabilitation patients were excluded, the difference in LOS was not significant (1.08 ± 0.47 vs 1.13 ± 0.55 days; t = 1.331; P = .184). Two OSH patients required transfer to a GH postoperatively (angina and gastrointestinal bleed).

CONCLUSION

This study found that perioperative outcomes for THA were equally good at the OSH and GH. Rehabilitation utilization was higher at the GH. The LOS at both facilities was lower than the national average of 2.9 days. When rehabilitation patients and outliers were excluded, there was no significant difference in LOS between the two.

Utilization of Total Joint Arthroplasty in Physician-Owned Specialty Hospitals vs Acute Care Facilities

BACKGROUND

The recent emergence of physician-owned specialty hospitals has sparked controversy about overutilization. Thus, the purpose of this study was to compare utilization patterns of total joint arthroplasty (TJA) between physician-specialty hospitals (PSHs) and acute care hospitals (ACHs).

METHODS

A retrospective study was conducted from January 2010 to August 2014 comparing primary TJA patients between a PSH and an ACH; 103 PSH patients were matched to 103 ACH patients by age, gender, BMI, and ASA classification with similar case distribution between facilities. All surgeons in the study operated at both hospitals and were shareholders of the PSH. Information on nonoperative treatments, and timing to the initial appointment, consent, and surgery were analyzed using univariate analysis.

RESULTS

Nonoperative treatments before surgery were similar between hospitals (P = 1.00). The time from the initial appointment to consent was longer for PSH (P = .0001). However, the time from consent to the date of surgery (P = .04) and the timing from symptoms to initial appointment (P = .006) was shorter for PSH. The time from initial appointment to the day of surgery was similar between groups (P = .20). Patients were more likely to be consented for surgery on their first clinic visit when undergoing surgery at ACH (87 of 103, 84.4%) compared to PSH (61 of 103; 59.2%; P < .001). Length of stay was significantly shorter for both total knee arthroplasty (P = .001) and total hip arthroplasty patients (P = .001) at PSH.

CONCLUSION

Facility ownership in PSH resulted in similar conservative treatment before TJA. The time to surgical consent after the initial appointment was longer PSH, whereas the time from consent to the date of surgery was shorter at the PSH.

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.

Healthcare Spending and Performance of Specialty Hospitals: Nationwide Evidence from Colorectal-Anal Specialty Hospitals in South Korea

PURPOSE

Aim of this study is to investigate the characteristics and performance of colorectal-anal specialty vs. general hospitals for South Korean inpatients with colorectal-anal diseases, and assesses the short-term designation effect of the government's specialty hospital.

MATERIALS AND METHODS

Nationwide all colorectal-anal disease inpatient claims (n=292158) for 2010-2012 were used to investigate length of stay and inpatient charges for surgical and medical procedures in specialty vs. general hospitals. The patients' claim data were matched to hospital data, and multi-level linear mixed models to account for clustering of patients within hospitals were performed.

RESULTS

Inpatient charges at colorectal-anal specialty hospitals were 27% greater per case and 92% greater per day than those at small general hospitals, but the average length of stay was 49% shorter. Colorectal-anal specialty hospitals had shorter length of stay and a higher inpatient charges per day for both surgical and medical procedures, but per case charges were not significantly different. A "specialty" designation effect also found that the colorectal-anal specialty hospitals may have consciously attempted to reduce their length of stay and inpatient charges. Both hospital and patient level factors had significant roles in determining length of stay and inpatient charges.

CONCLUSION

Colorectal-anal specialty hospitals have shorter length of stay and higher inpatient charges per day than small general hospitals. A "specialty" designation by government influence performance and healthcare spending of hospitals as well. In order to maintain prosperous specialty hospital system, investigation into additional factors that affect performance, such as quality of care and patient satisfaction should be carried out.

How Do Hospitals Respond to Market Entry? Evidence from a Deregulated Market for Cardiac Revascularization

Regulatory entry barriers to hospital service markets, namely Certificate of Need (CON) regulations, are enforced in many US states. Policy makers in other states are considering reinstating CON policies in tandem with service expansions mandated under the Affordable Care Act. Although previous studies examined the volume effects of CON, demand responses to actual entry into local hospital markets are not well understood. In this paper, we empirically examine the demand-augmenting, demand-redistribution, and risk-allocation effects of hospital entry by studying the cardiac revascularization markets in Pennsylvania, a state in which dynamic market entry occurred after repeal of CON in 1996. Results from interrupted time-series analyses indicate demand-augmenting effects for coronary artery bypass graft (CABG) and business-stealing effects for percutaneous coronary intervention (PCI) procedures: high entrant market share mitigated the declining incidence of CABG, but it had no significant effect on the rising trend in PCI use, among patients with coronary artery disease. We further find evidence that entry by new cardiac surgery centers tended to sort high-severity patients into the more invasive CABG procedure and low-severity patients into the less invasive PCI procedures. These findings underscore the importance of considering market-level strategic responses by hospitals when regulatory barriers are rescinded.

NHS commissioning practice and health system governance: a mixed-methods realistic evaluation

Background

By 2010 English health policy-makers had concluded that the main NHS commissioners [primary care trusts (PCTs)] did not sufficiently control provider costs and performance. After the 2010 general election, they decided to replace PCTs with general practitioner (GP)-controlled Clinical Commissioning Groups (CCGs). Health-care commissioners have six main media of power for exercising control over providers, which can be used in different combinations (‘modes of commissioning’).

Objectives

To: elicit the programme theory of NHS commissioning policy and empirically test its assumptions; explain what shaped NHS commissioning structures; examine how far current commissioning practice allowed commissioners to exercise governance over providers; examine how commissioning practices differ in different types of commissioning organisation and for specific care groups; and explain what factors influenced commissioning practice and the relationships between commissioners and providers.

Design

Mixed-methods realistic evaluation, comprising: Leximancer and cognitive frame analyses of policy statements to elicit the programme theory of NHS commissioning policy; exploratory cross-sectional analysis of publicly available managerial data about PCTs; systematic comparison of case studies of commissioning in four English sites – including commissioning for older people at risk of unplanned hospital admission; mental health; public health; and planned orthopaedic surgery – and of English NHS commissioning practice with that of a German sick-fund and an Italian region (Lombardy); action learning sets, to validate the findings and draw out practical implications; and two framework analyses synthesising the findings and testing the programme theory empirically.

Results

In the four English case study sites, CCGs were formed by recycling former commissioning structures, relying on and maintaining the existing GP commissioning leaderships. The stability of distributed commissioning depended on the convergence of commissioners’ interests. Joint NHS and local government commissioning was more co-ordinated at strategic than operational level. NHS providers’ responsiveness to commissioners reflected how far their interests converged, but also providers’ own internal ability to implement agreements. Commissioning for mental health services and to prevent recurrent unplanned hospital readmissions relied more on local ‘micro-commissioning’ (collaborative care pathway design) than on competition. Service commissioning was irrelevant to intersectoral health promotion, but not clinical prevention work. On balance, the possibility of competition did not affect service outcomes in the ways that English NHS commissioning policies assumed. ‘Commodified’ planned orthopaedic surgery most lent itself to provider competition. In all three countries, tariff payments increased provider activity and commissioners’ costs. To contain costs, commissioners bundled tariff payments into blocks, agreed prospective case loads with providers and paid below-tariff rates for additional cases. Managerial performance, negotiated order and discursive control were the predominant media of power used by English, German and Italian commissioners.

Conclusions

Commissioning practice worked in certain respects differently from what NHS commissioning policy assumed. It was often laborious and uncertain. In the four English case study sites financial and ‘real-side’ contract negotiations were partly decoupled, clinician involvement being least on the financial side. Tariff systems weakened commissioners’ capacity to choose providers and control costs. Commissioners adapted the systems to solve this problem. Our findings suggest a need for further research into whether or not differently owned providers (corporate, third sector, public, professional partnership, etc.) respond differently to health-care commissioners and, if so, what specific implications for commissioning practice follow. They also suggest that further work is needed to assess how commissioning practices impact on health system integration when care pathways have to be constructed across multiple providers that must tender competitively for work, perhaps against each other.

Funding

The National Institute for Health Research Health Services and Delivery Research programme.

Governmental designation of spine specialty hospitals, their characteristics, performance and designation effects: a longitudinal study in Korea

OBJECTIVES

This study compares the characteristics and performance of spine specialty hospitals versus other types of hospitals for inpatients with spinal diseases in South Korea. We also assessed the effect of the government's specialty hospital designation on hospital operating efficiency.

SETTING

We used data of 823 hospitals including 17 spine specialty hospitals in Korea.

PARTICIPANTS

All spine disease-related inpatient claims nationwide (N=645 449) during 2010-2012.

INTERVENTIONS

No interventions were made.

OUTCOME MEASURES

Using a multilevel generalised estimating equation and multilevel modelling, this study compared inpatient charges, length of stay (LOS), readmission within 30 days of discharge and in-hospital death within 30 days of admission in spine specialty versus other types of hospitals.

RESULTS

Spine specialty hospitals had higher inpatient charges per day (27.4%) and a shorter LOS (23.5%), but per case charges were similar after adjusting for patient-level and hospital-level confounders. After government designation, spine specialty hospitals had 8.8% lower per case charges, which was derived by reduced per day charge (7.6%) and shorter LOS (1.0%). Rates of readmission also were lower in spine specialty hospitals (OR=0.796). Patient-level and hospital-level factors both played important roles in determining outcome measures.

CONCLUSIONS

Spine specialty hospitals had higher per day inpatient charges but a much shorter LOS than other types of hospitals due to their specialty volume and experience. In addition, their readmission rate was lower. Spine specialty hospitals also endeavoured to be more efficient after governmental 'specialty' designation.

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

BACKGROUND

Multiple studies have investigated physician-owned specialized facilities (specialized hospitals and ambulatory surgery centres). However, the evidence is fragmented and the literature lacks cohesion.

OBJECTIVES

To provide a comprehensive overview of the effects of physician-owned specialized facilities by synthesizing the findings of published empirical studies.

METHODS

Two reviewers independently researched relevant studies using a standardized search strategy. The Institute of Medicine's quality framework (safe, effective, equitable, efficient, patient-centred, and accessible care) was applied in order to evaluate the performance of such facilities. In addition, the impact on the performance of full-service general hospitals was assessed.

RESULTS

Forty-six studies were included in the systematic review. Overall, the quality of the included studies was satisfactory. Our results show that little evidence exists to confirm the advantages attributed to physician-owned specialized facilities, and their impact on full-service general hospitals remains limited.

CONCLUSION

Although data is available on a wide variety of effects, the evidence base is surprisingly thin. There is no compelling evidence available demonstrating the added value of physician-owned specialized facilities in terms of quality or cost of the delivered care. More research is necessary on the relative merits of physician-owned specialized facilities. In addition, their corresponding impact on full-service general hospitals remains unclear. The development of physician-owned specialized facilities should thus be monitored carefully.

Urologists' use of intensity-modulated radiation therapy for prostate cancer

BACKGROUND

Some urology groups have integrated intensity-modulated radiation therapy (IMRT), a radiation treatment with a high reimbursement rate, into their practice. This is permitted by the exception for in-office ancillary services in the federal prohibition against self-referral. I examined the association between ownership of IMRT services and use of IMRT to treat prostate cancer.

METHODS

Using Medicare claims from 2005 through 2010, I constructed two samples: one comprising 35 self-referring urology groups in private practice and a matched control group comprising 35 non-self-referring urology groups in private practice, and the other comprising non-self-referring urologists employed at 11 National Comprehensive Cancer Network centers matched with 11 self-referring urology groups in private practice. I compared the use of IMRT in the periods before and during ownership and used a difference-in-differences analysis to evaluate changes in IMRT use according to self-referral status.

RESULTS

The rate of IMRT use by self-referring urologists in private practice increased from 13.1 to 32.3%, an increase of 19.2 percentage points (P<0.001). Among non-self-referring urologists, the rate of IMRT use increased from 14.3 to 15.6%, an increase of 1.3 percentage points (P=0.05). The unadjusted difference-in-differences effect was 17.9 percentage points (P<0.001). The regression-adjusted increase in IMRT use associated with self-referral was 16.4 percentage points (P<0.001). The rate of IMRT use by urologists working at National Comprehensive Cancer Network centers remained stable at 8.0% but increased by 33.0 percentage points among the 11 matched self-referring urology groups. The regression-adjusted difference-in-differences effect was 29.3 percentage points (P<0.001).

CONCLUSIONS

Urologists who acquired ownership of IMRT services increased their use of IMRT substantially more than urologists who did not own such services. Allowing urologists to self-refer for IMRT may contribute to increased use of this expensive therapy. (Funded by the American Society for Radiation Oncology.).

An analysis of the inpatient charge and length of stay for patients with joint diseases in Korea: specialty versus small general hospitals

In 2011, the Korean government designated hospitals with certain structural characteristics as specialty hospitals. This study compared the inpatient charges and length of stay of patients with joint diseases treated at these specialty hospitals with those of patients treated at small general hospitals. In addition, the study investigated whether the designation of certain hospitals as specialty hospitals had an effect on inpatient charges and length of stay. Multi-level models were used to perform regression analyses on inpatient claims data (N=268,809) for 2010-2012 because of the hierarchical structure of the data. The inpatient charge at specialty hospitals was 19% greater than that at small general hospitals, but the length of stay was 21% shorter. After adjusting for patient and hospital level confounders, specialty hospitals had a higher inpatient charge (34.6%) and a reduced length of stay (31.7%). However, the effect of specialty hospital designation on inpatient charge (2.7% higher) and length of stay (2.3% longer) was relatively smaller. Among the patient characteristics, female gender, age, and severity of illness were positively associated with inpatient charge and length of stay. In terms of location, hospitals in metropolitan area had higher inpatient charges (5.5%), but much shorter length of stay (-14%). Several structural factors, such as occupancy rate, bed size, number of outpatients and nurses were positively associated with both inpatient charges and length of stay. However, number of specialists was positively associated with inpatient charges, but negatively associated with length of stay. In sum, this study found that specialty hospitals treating joint diseases tend to incur higher charges but produce shorter length of stay, compared to their counterparts. Specialty hospitals' overcharging behaviors, although shorter length of stay, suggest that policy makers could introduce bundled payments for the joint procedures. To promote a successful specialty hospital system, a broader discussion and investigation that includes quality measures as well as real cost of care should be initiated.

Dynamics of ambulatory surgery centers and hospitals market entry

In this article, we investigate the diversity of healthcare delivery organizations by comparing the market determinants of hospitals entry rates with those of ambulatory surgery centers (ASCs). Unlike hospitals, ASCs is one of the growing populations of specialized healthcare delivery organizations. There are reasons to believe that firm entry patterns differ within growing organizational populations since these markets are characterized by different levels of organizational legitimacy, technological uncertainty, and information asymmetry. We compare the entry patterns of firms in a mature population of hospitals to those of firms within a growing population of ASCs. By using patient-level datasets from the state of Florida, we break down our explanatory variables by facility type (ASC vs. hospital) and utilize negative binomial regression models to evaluate the impact of niche density on ASC and hospital entry. Our results indicate that ASCs entry rates is higher in markets with overlapping ASCs while hospitals entry rates are less in markets with overlapping hospitals and ASCs. These results are consistent with the notion that firms in growing populations tend to seek out crowded markets as they compete to occupy the most desirable market segments while firms in mature populations such as general hospitals avoid direct competition.

Environmental Factors Contributing to Wrongdoing in Medicine: A Criterion-Based Review of Studies and Cases

In this paper we describe our approach to understanding wrongdoing in medical research and practice, which involves the statistical analysis of coded data from a large set of published cases. We focus on understanding the environmental factors that predict the kind and the severity of wrongdoing in medicine. Through review of empirical and theoretical literature, consultation with experts, the application of criminological theory, and ongoing analysis of our first 60 cases, we hypothesize that 10 contextual features of the medical environment (including financial rewards, oversight failures, and patients belonging to vulnerable groups) may contribute to professional wrongdoing. We define each variable, examine data supporting our hypothesis, and present a brief case synopsis from our study that illustrates the potential influence of the variable. Finally, we discuss limitations of the resulting framework and directions for future research.

Percutaneous coronary intervention outcomes in US hospitals with varying structural characteristics: analysis of the NCDR®

BACKGROUND

In the United States, there continues to be debate about whether certain types of hospitals deliver improved patient outcomes. We sought to assess the association between hospital organizational characteristics and in-hospital outcomes for percutaneous coronary intervention (PCI).

METHODS

Retrospective analysis of 2004 to 2007 data for 694 US hospitals participating in the CathPCI Registry(®). Our analysis focused on 1,113,554 patients who underwent PCI in 471 not-for-profit (NFP) hospitals, 131 major teaching hospitals, 79 for-profit (FP) hospitals, and 13 physician-owned specialty hospitals. Outcomes included in-hospital mortality, stroke, bleeding, vascular injury, and a composite representing one or more of the individual complications. We used the current CathPCI Registry mortality risk model to calculate risk-standardized mortality ratios (RSMRs) for each category of hospital and compared hospital groupings for all patients in aggregate and in subgroups stratified by patients' indications for PCI.

RESULTS

Patients treated in major teaching hospitals were younger, whereas FP hospitals performed a greater proportion of PCI for patients with ST-elevation myocardial infarction (P < .0001). Specialty hospitals treated patients with less acuity, including a lower proportion of patients with ST-elevation myocardial infarction. In unadjusted analyses, specialty hospitals had significantly lower rates of all adverse outcomes compared with NFP, teaching, and FP hospitals including in-hospital mortality (0.7%, 1.2%, 1.4%, and 1.4%, respectively; P < .001) and the composite end point (2.4%, 4.1%, 4.6%, and 4.3%, respectively; P < .001). In adjusted analyses, RSMR was significantly lower for specialty hospitals when compared with the other 3 groups for all patients in aggregate (RSMR 1.05%, 1.30%, 1.38%, 1.39%; P < .001); these differences remained clinically significant but were no longer statistically significant in subgroup analyses.

CONCLUSIONS

Specialty hospitals appear to have lower rates of most adverse outcomes for PCI. Specialty hospitals may have developed expertise in narrow procedural areas that could be adapted to the larger population of general hospitals.

Physician-owned hospitals, neurosurgeons, and disclosure: lessons from law and the literature

Physician ownership of hospitals has been a subject of controversy for years. Opponents claim that physician ownership and the hospital profits that result from imaging, laboratory tests, and procedures create a conflict of interest for physicians in providing impartial patient care. Proponents argue that having an ownership stake in a hospital means that physicians can have control over all facets of the patient experience, which leads potentially to better patient satisfaction and outcomes. With passage of health reform legislation, physician-owned specialty hospitals have been under renewed attack and now face more restrictive limitations on their growth and expansion. The following review explores the history of physician-owned specialty hospitals, the controversy surrounding physician ownership, and the scope of neurosurgeon ownership in specialty hospitals and offers 2 models for disclosure of potential conflicts of interest.

Hospital competition and financial performance: the effects of ambulatory surgery centers

Ambulatory surgery centers (ASCs), limited-service alternatives for treating surgery patients not requiring an overnight stay, are a health-care service innovation that has proliferated in the U.S. and other countries in recent years. This paper examines the effects of ASC competition on revenues, costs, and profit margins of hospitals that also provided these services as a subset of their general services in Arizona, California, and Texas during the period 1997-2004. We identified all ASCs operating during the period in the 49 Dartmouth Hospital Referral Regions in the three states. The results of fixed effects models suggested that ASCs are meaningful competitors to general hospitals. We found downward pressure on revenues, costs, and profits in general hospitals associated with ASC presence.

Imaging self-referral associated with higher costs and limited impact on duration of illness

Self-referral for imaging services occurs when a physician sends patients to receive an imaging procedure from a device that the physician owns or leases. Advocates argue that this shortens the duration of illness and lowers costs. For twenty common combinations of medical conditions and types of imaging, we evaluated the association between self-referral, duration of illness episode, and three measures of cost. Self-referral was associated with significantly and substantially higher episode costs for most of the combinations of medical conditions and imaging that we studied. There was no decrease in the length of illness, except when doctors self-referred patients to receive x-rays for a few common conditions. These findings indicate that except for x-rays, constraining the self-referral of imaging may be appropriate.

Epidemiology of spine care: the back pain dilemma

In this article, the epidemiology of back pain and the use of a variety of treatments for back pain in the United States are reviewed. The dilemma faced by medical providers caring for patients with low back pain is examined in the context of epidemiologic data. Back pain is becoming increasingly common and a growing number of treatment options are being used with increasing frequency in clinical practice. However, limited evidence exists to demonstrate the effectiveness of these treatments. In addition, health-related quality of life for persons with back pain is not improving despite the availability and use of an expanding array of treatments. This dilemma poses a difficult challenge for medical providers treating individual patients who suffer from back pain.

The impact of new hospital orthopaedic surgery programs on total joint arthroplasty utilization

BACKGROUND

Utilization of arthroplasty is increasing, but there are little data exploring the causes of this increase. The objective of this study was to examine the relationship between new programs for arthroplasty of the lower extremity joints and the utilization of arthroplasty.

METHODS

We identified twenty-four markets (hospital referral regions) that experienced the entry of new physician-owned specialty hospitals, using 1991 to 2005 Medicare data. We matched each market with a new specialty hospital to two different control markets (one market with a new arthroplasty program in a general hospital and one market without a new arthroplasty program), using a propensity score that accounted for market supply and demand for orthopaedic surgery and the regulatory environment. We compared the utilization of arthroplasty of the lower extremity joints (total hip arthroplasty and total knee arthroplasty) in each group of markets over a five-year window, extending from two years before to three years after the entry of new orthopaedic surgery programs.

RESULTS

The twenty-four markets with new specialty orthopaedic hospitals had higher utilization of arthroplasty at baseline (10.9 arthroplasties per 1000 Medicare beneficiaries per year) and follow-up (12.7 per 1000 beneficiaries) compared with the twenty-four markets with new arthroplasty programs in general hospitals (9.7 and 11.4, respectively) and the twenty-four markets with no new programs (9.9 and 11.3), although the differences were not significant (p > 0.05). Growth in the utilization of arthroplasty was similar in markets with new specialty hospitals before (an increase of 0.63 procedure per 1000 beneficiaries per year) and after the entry of new specialty hospitals (an increase of 0.39) compared with markets with new surgery programs in general hospitals (an increase of 0.24 before and 0.43 after) and markets with no new programs (an increase of 0.38 before and 0.33 after the entry of new specialty hospitals) (p > 0.05 for all comparisons).

CONCLUSIONS

The utilization of arthroplasty is increasing at similar rates in markets with and without new arthroplasty programs.

Expert opinion and controversies in musculoskeletal and sports medicine: conflict of interest

Standaert CJ, Schofferman JA, Herring SA. Expert opinion and controversies in musculoskeletal and sports medicine: conflict of interest. Medical providers are faced with conflicts of interest (COIs) on a routine basis, but there is growing concern over the effects of COIs on medical care, medical education, research, product development, and other aspects of the health care system. The data clearly indicate that medical providers are subconsciously influenced by interactions with representatives of pharmaceutical and device manufacturers and that they are not very good at assessing the extent of this influence upon themselves. The data are also clear that potential bias arising from COIs is present in medical education and research. A number of professional medical associations have developed guidelines regarding interactions between medical providers and industry, and requirements for disclosure have become commonplace. The impact of these regulations and of disclosure on managing COI is unclear, however, and it is extremely important that providers manage the conflicts present on their own. A broad awareness of the effects of COIs and disclosure is necessary if providers are going to be able to offer the best care for their patients.

Single Specialty Hospitals and Nurse Staffing Patterns

Advocates of physician-owned single specialty hospitals (SSHs) maintain that, through healthy competition, SSHs pressure competitor hospitals in local markets to improve performance. This paper investigates data trends on the effects of SSH entry on a potential indicator of quality of care in general hospital competitors: nurse staffing levels. We examined registered nurse (RN) staffing from 1997 to 2004 in ten states in which there was considerable SSH entry during this period. Regression estimates used longitudinal panel data models with hospital fixed effects to compare changes in numbers of RNs in general hospitals located in markets with SSHs with general hospitals located in markets where there were no SSHs. Results indicate that hospitals located in markets with orthopedic/surgical SSH presence raised their RN nurse staffing levels. Whether or not these changes are associated with improved patient outcomes is unknown.

Hospital-physician collaboration: landscape of economic integration and impact on clinical integration

CONTEXT

Hospital-physician relationships (HPRs) are an important area of academic research, given their impact on hospitals' financial success. HPRs also are at the center of several federal policy proposals such as gain sharing, bundled payments, and pay-for-performance (P4P).

METHODS

This article analyzes the HPRs that focus on the economic integration of hospitals and physicians and the goals that HPRs are designed to achieve. It then reviews the literature on the impact of HPRs on cost, quality, and clinical integration.

FINDINGS

The goals of the two parties in HPRs overlap only partly, and their primary aim is not reducing cost or improving quality. The evidence base for the impact of many models of economic integration is either weak or nonexistent, with only a few models of economic integration having robust effects. The relationship between economic and clinical integration also is weak and inconsistent. There are several possible reasons for this weak linkage and many barriers to further integration between hospitals and physicians.

CONCLUSIONS

Successful HPRs may require better financial conditions for physicians, internal changes to clinical operations, application of behavioral skills to the management of HPRs, changes in how providers are paid, and systemic changes encompassing several types of integration simultaneously.

Commentary on “The Economics of Specialty Hospitals”

There are two major aims of this commentary on “The Economics of Specialty Hospitals” by Schneider and colleagues (this issue). The first aim is to identify and discuss the policy, market, and organizational context in which physician-owned specialty hospitals have emerged and now exist in the United States. This context is critical for understanding aspects of the economic model and the potential advantages and disadvantages of physician-owned specialty (or limited-service) hospitals relative to general (or full-service) hospitals now and over time. The second aim is to discuss the six specific elements of the model (i.e., consumer demand, procedural operating margins, clinical efficiencies, procedural economies of scale, economies or diseconomies of scope, and competencies and learning). Specifically, to raise some key questions and to point to other ideas and empirical evidence that suggest that in practice, physician-owned specialty hospitals may not have all the advantages that the economic theory described seems to imply.

Public Policy Regarding Specialty Hospitals

Why do we need “public policy” regarding specialty hospitals? What is the rationale for government involvement in decisions by the private sector to invest in specialty hospitals? Two possibilities are reduced access to services primarily by the uninsured (a fairness concern) and changes in the types of patients receiving care resulting from poor consumer information (an efficiency concern). The fairness argument faces logical and empirical difficulties, and even if it proved to be true, it is not clear that limiting the growth of specialty hospitals would be an efficient way to address the problem. However, there is some empirical evidence to support the efficiency concern, and if specialty hospitals result in the treatment of patients with lower expected net benefits from treatment, then it is possible that physician-owned facilities could result in an increasingly inefficient allocation of health care resources, higher insurance premiums, and higher rates of uninsurance.

The Economics of Specialty Hospitals

Specialty hospitals, particularly those specializing in surgery and owned by physicians, have generated a relatively high degree of policy attention over the past several years. The main focus of policy debates has been in two areas: the extent to which specialty hospitals might compete unfairly with incumbent general hospitals and the extent to which physician ownership might be associated with higher usage. Largely absent from the debates, however, has been a discussion of the basic economic model of specialty hospitals. This article reviews existing literature, reports, and findings from site visits to explore the economic rationale for specialty hospitals. The discussion focuses on six factors associated with specialization: consumer demand, procedural operating margins, clinical efficiencies, procedural economies of scale, economies (and diseconomies) of scope, and competencies and learning. A better understanding of the economics of specialization will help policy makers evaluate the full spectrum of advantages and disadvantages of specialty hospitals.

Private gain and public pain: financing American health care

Health care spending comprises about 16% of the total United States gross domestic product and continues to rise. This article examines patterns of health care spending and the factors underlying their proportional growth. We examine the "usual suspects" most frequently cited as drivers of health care costs and explain why these may not be as important as they seem. We suggest that the drive for technological advancement, coupled with the entrepreneurial nature of the health care industry, has produced inherently inequitable and unsustainable health care expenditure and growth patterns. Successful health reform will need to address these factors and their consequences.