The Dichotomy Of Physician-Owned Hospitals In The United States: Good Or Bad For Patients?

Share Article discusses the dichotomy of physician-owned hospitals in the United States in today's blog posting, questioning whether the sometimes better quality of care provided by some physician-owned hospitals is outweighed by the potential conflict of interest when the physicians receive financial benefits from self-referrals.

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Many physician-owned hospitals are specialty hospitals that focus on heart surgery or orthopedic surgery patients, which are among the most profitable procedures performed in hospitals, the premier free website that connects medical malpractice victims in the United States with medical malpractice lawyers in their state, blogs today that hospitals that are owned by physicians who refer their patients to their own hospitals is an obvious potential conflict of interest, but the better level of care provided by some physician-owned hospitals may outweigh the conflict of interest, especially in the minds of patients.

According to the American Medical Association, there are 238 physician-owned hospitals in 38 states in the United States (most are located in California, Kansas, Louisiana, Oklahoma, and Texas), and the top performing hospital (as well as 9 of the top 10 performing hospitals and 48 of the top 100 hospitals) was physician-owned, as determined by the U.S. government when analyzing clinical data used to reward hospitals for providing a higher level of care. Of the 161 physician-owned hospitals that are eligible to participate in the Affordable Care Act's quality programs, 122 are receiving extra funds while 39 are losing funds.

When the Affordable Care Act was enacted in 2010, existing physician-owned hospitals were generally precluded from expanding and new physician-owned hospitals were prohibited. One reason for the concern regarding physician-owned hospitals is that the self-referring owners-physicians have a financial incentive to intentionally focus on healthier patients who are more profitable, leaving sicker, more costly patients to be treated in community hospitals, according to the American Hospital Association and the Federation of American Hospitals, noting that many physician-owned hospitals are specialty hospitals that focus on heart surgery or orthopedic surgery patients, which are among the most profitable procedures performed in hospitals.

Critics of physician-owned hospitals further allege that there is an inherent conflict of interest because the owner-physicians admit patients into the hospital in which they have a financial interest -- the more patients that are admitted, the more the hospital bills for services, the more the hospital is paid, and the more the physician-owners receive as a result of their ownership interest in the hospital. Despite protestations from the owner-physicians that their medical decisions are not based on monetary considerations, there is no getting around the fact that the doctors put money in their own pockets when a patient is admitted into their own hospital -- the more patients admitted, the more they profit.

For patients who are more concerned about their own health than the money their doctors are pocketing by having a financial interest in the hospitals in which they are admitted, obtaining care in physician-owned hospitals that are highly-rated probably outweighs any consideration that their physicians have a financial interest in the medical services that they receive.

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