Specialty hospitals raise antitrust concerns.(A Threat To General Hospitals?)

The specialty hospital boom is raising fresh concerns about patient care and competition in the health care market.

Whenever there is intense competition among hospitals for a specific patient population, that's a sign that third-party payers are reimbursing "too much for these procedures and perhaps not paying enough for other services," said Dr. Paul Ginsburg, president of the Center for Studying Health System Change (HSC) and coauthor of a study on the impact of specialty hospitals on the health care market.

Members of the HSC and other health care experts met in Washington, D.C., in April to discuss the findings of the study, "Specialty Hospitals: Focused Factories or Cream Skimmers?"

At least 50 specialty hospitals currently exist in the United States, and more are on the way In the past 6 years, 11 freestanding specialty hospitals have opened or have developed plans to open, with cardiac and orthopedic procedures as the common focus.

Although they claim to improve quality and reduce costs by expertly performing a high volume of select procedures, the HSC study raises the concern that physician-owned specialty hospitals will siphon off the most profitable patients, leaving general hospitals with the sickest and costliest patients.

When hospitals compete, "quality may decline and costs may increase because each hospital has less volume and excess capacity is rarely eliminated," Dr. Kelly Devers, HSC researcher and the study's lead author, told conference participants. The empty bed syndrome inevitably leads to a greater likelihood of patients receiving unnecessary procedures, she observed.

A number of factors are fueling the specialty hospital trend, including a desire among physicians to control their own working conditions and boost their income by treating a select group of patients undergoing well-reimbursed procedures.