The emergence of physician-owned specialty hospitals

For-Profit Hospitals Have Thrived Because of Generous Public Reimbursement Schemes, Not Greater Efficiency: A Multi-Country Case Study

For-profit hospitals' market share has increased in many nations over recent decades. Previous studies suggest that their growth is not attributable to superior performance on access, quality of care, or efficiency. We analyzed other factors that we hypothesized may contribute to the increasing role of for-profit hospitals. We studied the historical development of the for-profit hospital sector across 4 nations with contrasting trends in for-profit hospital market share: the United States, the United Kingdom, Germany, and the Netherlands. We focused on 3 factors that we believed might help explain why the role of for-profits grew in some nations but not in others: (1) the treatment of for-profits by public reimbursement plans, (2) physicians' financial interests, and (3) the effect of the political environment. We conclude that access to subsidies and reimbursement under favorable terms from public health care payors is an important factor in the rise of for-profit hospitals. Arrangements that aligned financial incentives of physicians with the interests of for-profit hospitals were important in stimulating for-profit growth in an earlier era, but they play little role at present. Remarkably, the environment for for-profit ownership seems to have been largely immune to political shifts.

Patient Perceptions of Physician Ownership in Spine Care

STUDY DESIGN

This was a prospective study.

OBJECTIVE

This study aims to determine the perspectives of patients seeking spine care in regard to physician ownership of surgical facilities and to understand the importance of disclosing financial conflicts.

SUMMARY OF BACKGROUND DATA

There has been limited investigation regarding patient perceptions of the proprietary structure of surgical facilities.

METHODS

Patients seeking treatment for spine pathology completed an 8-item survey. The questions assessed if patients acknowledged the owners of surgical facilities, if the patient thought knowledge of ownership is important, who they perceived as most qualified to own surgical facilities, preference of communication of ownership, and impact of facility ownership on care.

RESULTS

A total of 200 patients completed the survey. When patients were asked whom they thought owned the hospital, most reported private hospital corporations followed by universities/medical schools and insurance companies. With regard to whom patients thought owned an ambulatory surgical center, most reported physicians, followed by private hospital corporations and individual investors. When asked how important it is to know the financial stakeholders of a surgical facility, 73.5% of patients stated "very important" or "somewhat important." Most patients reported they were not aware of who owned the facility. Regarding how facility owners should be communicated, 31.0% answered "written document," whereas 25.0% preferred verbal communication with the staff/surgeon. When asked how much impact the owner of a surgical facility has on their care, 38.0% of patients responded, "strong impact," followed by "moderate impact," (43.0%), and "little or no impact" (19.0%). Patients thought that physicians were the most qualified to own an ambulatory surgical center, followed by universities/medical schools and private hospital corporations.

CONCLUSIONS

The pretreatment perception of patients referred to a spine clinic favored the opinion that physicians were the most qualified to own and manage surgical facilities. Therefore, physicians should be encouraged to share disclosures with patients as their ownership of surgical facilities is viewed favorably.

Prosthetic Joint Infection Trends at a Dedicated Orthopaedics Specialty Hospital

Introduction

Historically, a majority of prosthetic joint infections (PJIs) grew Gram-positive bacteria. While previous studies stratified PJI risk with specific organisms by patient comorbidities, we compared infection rates and microbiologic characteristics of PJIs by hospital setting: a dedicated orthopaedic hospital versus a general hospital serving multiple surgical specialties.

Methods

A retrospective review of prospectively collected data on 11,842 consecutive primary hip and knee arthroplasty patients was performed. Arthroplasty cases performed between April 2006 and August 2008 at the general university hospital serving multiple surgical specialties were compared to cases at a single orthopaedic specialty hospital from September 2008 to August 2016.

Results

The general university hospital PJI incidence rate was 1.43%, with 5.3% of infections from Gram-negative species. In comparison, at the dedicated orthopaedic hospital, the overall PJI incidence rate was substantially reduced to 0.75% over the 8-year timeframe. Comparing the final two years of practice at the general university facility to the most recent two years at the dedicated orthopaedics hospital, the PJI incidence was significantly reduced (1.43% vs 0.61%). Though the overall number of infections was reduced, there was a significantly higher proportion of Gram-negative infections over the 8-year timeframe at 25.3%.

Conclusion

In transitioning from a multispecialty university hospital to a dedicated orthopaedic hospital, the PJI incidence has been significantly reduced despite a greater Gram-negative proportion (25.3% versus 5.3%). These results suggest a change in the microbiologic profile of PJI when transitioning to a dedicated orthopaedic facility and that greater Gram-negative antibiotic coverage could be considered.

Influence of Internet dissemination on hospital selection for benign surgical disease: A single center retrospective study

The Internet is used worldwide, but its effect on hospital selection of minor surgical disease has not hitherto been thoroughly studied. To investigate the effect of the Internet dissemination on hospital selection of minor surgical disease and information affecting selection, we conducted a survey of patients who underwent laparoscopic surgery from January 2016 to April 2017. We analyzed the questionnaire responses of 1916 patients. Over 80% of patients in all groups selected the hospital based on Internet information. Among patients aged over 60 years, 65.1% selected the hospital based on Internet information. With regard to hospital selection factors, the highest number of responses was for sophisticated surgical treatment (93.1%). The second highest was for a simplified medical care system (33.0%); third was a comprehensive nursing care system (18.1%). Among responses about surgical treatment, the most were obtained for short operation time and fewer hospitalization days (81.5%).

The Effect of Hospital Ownership on Health Care Utilization in Orthopedic Surgery

PURPOSE

To determine if ownership of a specialty hospital or ambulatory surgery centers (ASC) affects surgical volume.

MATERIALS AND METHODS

All surgeries performed by 75 orthopedic surgeons at a single practice between January 1, 2010 and March 1, 2015 were identified. During this time, the practice purchased an ownership stake in 1 hospital and 3 ASC. The total surgical volume by partnership status and location was collected and analyzed.

RESULTS

A total of 104,661 surgical surgeries were performed by 75 surgeons. Over the 62 months, there was an average increase in the number of surgical cases performed per surgeon per year of 2.82±0.48 cases; however, the average increase in cases per year was lower for equity partners by 1.51 cases per year (P<0.0001). In the 2 years before purchasing the specialty hospital, the increase in the number of surgical cases per surgeon per month was 0.093±0.087 cases. In the 2 years after investing in the physician-owned specialty hospital, there was a decrease in the number of cases performed per surgeon per month by 0.027±0.110 (P=0.92).

CONCLUSIONS

In a well-established large orthopedic practice, surgeon ownership of a hospital or ASC does not lead to an increase in surgical volume.

LEVEL OF EVIDENCE

Level 4.

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.].

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.

Free-Standing Ambulatory Surgery Centers and Hospital Surgery Volume

This paper examines the association of free-standing ambulatory surgery centers (ASCs) with hospital surgery volume, using data from the 2002 Medicare Online Survey Certification and Reporting System and the American Hospital Association Annual Surveys of Hospitals. From 1993 to 2001, the number of ASCs per 100,000 population in metropolitan statistical areas (MSAs) increased by 150%. During the same period, hospital outpatient surgeries increased 28%, while inpatient surgeries decreased by 4.5%. MSA and year fixed-effects regression analyses suggest that an increase of one ASC per 100,000 people was associated with a 4.3% reduction in hospital outpatient surgical volume, but was not associated with inpatient surgical volume.

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.

Much ado about nothing? The financial impact of physician-owned specialty hospitals

The U.S. hospital industry has recently witnessed a number of policy changes aimed at aligning hospital payments to costs and these can be traced to significant concerns regarding selection of profitable patients and procedures by physician-owned specialty hospitals. The policy responses to specialty hospitals have alternated between payment system reforms and outright moratoriums on hospital operations including one in the recently enacted Affordable Care Act. A key issue is whether physician-owned specialty hospitals pose financial strain on the larger group of general hospitals through cream-skimming of profitable patients, yet there is no study that conducts a systematic analysis relating such selection behavior by physician-owners to financial impacts within hospital markets. The current paper takes into account heterogeneity in specialty hospital behavior and finds some evidence of their adverse impact on profit margins of competitor hospitals, especially for-profit hospitals. There is also some evidence of hospital consolidation in response to competitive pressures by specialty hospitals. Overall, these findings underline the importance of the payment reforms aimed at correcting distortions in the reimbursement system that generate incentives for risk-selection among providers groups. The identification techniques will also inform empirical analysis on future data testing the efficacy of these payment reforms.

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.

Redesigning the regulatory framework for ambulatory care services in New York

Policy Points: The landscape of ambulatory care services in the United States is rapidly changing on account of payment reform, primary care transformation, and the rise of convenient care options such as retail clinics. New York State has undertaken a redesign of regulatory policy for ambulatory care rooted in the Triple Aim (better health, higher-quality care, lower costs)-with a particular emphasis on continuity of care for patients. Key tenets of the regulatory approach include defining and tracking the taxonomy of ambulatory care services as well as ensuring that convenient care options do not erode continuity of care for patients.

CONTEXT

While hospitals remain important centers of gravity in the health system, services are increasingly being delivered through ambulatory care. This shift to ambulatory care is giving rise to new delivery structures, such as retail clinics and urgent care centers, as well as reinventing existing ambulatory care capacity, as seen with the patient-centered medical home model and the movement toward team-based care. To protect the public's interests, oversight of ambulatory care services must keep pace with these rapid changes. With this purpose, in January 2013 the New York Public Health and Health Planning Council undertook a redesign of the regulatory framework for the state's ambulatory care services. This article describes the principles undergirding the framework as well as the regulatory recommendations themselves.

METHODS

We explored and analyzed the regulation of ambulatory care services in New York in accordance with the available gray and peer-reviewed literature and legislative documents. The deliberations of the Public Health and Health Planning Council informed our review.

FINDINGS

The vision of high-performing ambulatory care should be rooted in the Triple Aim (better health, higher-quality care, lower costs), with a particular emphasis on continuity of care for patients. There is a pressing need to better define the taxonomy of ambulatory care services. From the state government's perspective, this clarification requires better reporting from new health care entities (eg, retail clinics), connections with regional and state health information technology hubs, and coordination among state agencies. A uniform nomenclature also would improve consumers' understanding of rights and responsibilities. Finally, the regulatory mechanisms employed-from mandatory reporting to licensure to regional planning to the certificate of need-should remain flexible and match the degree of consensus regarding the appropriate regulatory path.

CONCLUSIONS

Few other states have embarked on a wide-ranging assessment of their regulation of ambulatory care services. By moving toward adopting the regulatory approach described here, New York aims to balance sound oversight with pluralism and innovation in health care delivery.

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.

Ambulatory surgery centers and outpatient urologic surgery among Medicare beneficiaries

OBJECTIVE

To determine the effect of an ambulatory surgery center (ASC) opening in a healthcare market on utilization and quality of outpatient urologic surgery.

METHODS

This is a retrospective cohort study of Medicare beneficiaries undergoing outpatient urologic surgery from 2001 to 2010. Markets were classified into 3 groups based on ASC status (ie, those with ASCs, those without ASCs, and those where ASCs were introduced). Multiple propensity score methods adjusted for differences between markets and general linear mixed models determined the effect of ASC opening on utilization and quality, defined by mortality and hospital admission within 30 days of the index procedure.

RESULTS

During the study period, 195 ASCs opened in markets previously without one. Rates of hospital-based urologic surgery in markets where ASCs were introduced declined from 221 to 214 procedures per 10,000 beneficiaries in the 4 years after baseline. In contrast, rates in the other 2 market types increased over the same period (P<.001). Rates of outpatient urologic surgery overall (ie, in the hospital and ASC) demonstrated similar growth across market types during same period (P=.56). The introduction of an ASC into a market was not associated with increases in hospital admission or mortality (P>.5).

CONCLUSION

The introduction of an ASC into a healthcare market lowered rates of outpatient urologic surgery performed in the more expensive hospital setting. This redistribution was not associated with declines in quality or with greater growth in overall outpatient surgery use.

Do hospitals cross-subsidize?

Despite its salience as a regulatory tool to ensure the delivery of unprofitable medical services, cross-subsidization of services within hospital systems has been notoriously difficult to detect and quantify. We use repeated shocks to a profitable service in the market for hospital-based medical care to test for cross-subsidization of unprofitable services. Using patient-level data from general short-term hospitals in Arizona and Colorado before and after entry by cardiac specialty hospitals, we study how incumbent hospitals adjusted their provision of three uncontested services that are widely considered to be unprofitable. We estimate that the hospitals most exposed to entry reduced their provision of psychiatric, substance-abuse, and trauma care services at a rate of about one uncontested-service admission for every four cardiac admissions they stood to lose. Although entry by single-specialty hospitals may adversely affect the provision of unprofitable uncontested services, these findings warrant further evaluation of service-line cross-subsidization as a means to finance them.

Understanding the diffusion of ambulatory surgery centers

BACKGROUND

Outpatient surgery is increasingly delivered at freestanding ambulatory surgery centers (ASCs), which are thought to deliver quality care at lower costs per episode. The objective of this study was to understand potential facilitators and/or barriers to the introduction of freestanding ASCs in the United States.

METHODS

This is an observational study conducted from 2008 to 2010 using a 20% sample of Medicare claims. Potential determinants of ASC dissemination, including population, system, and legal factors, were compared between markets that always had ASCs, never had ASCs, and those that had new ASCs open during the study. Multivariable logistic regression was used to determine characteristics of markets associated with the opening of a new facility in a previously naïve market.

RESULTS

New ASCs opened in 67 previously naïve markets between 2008 and 2010. ASCs were more likely to open in hospital service areas that were urban (adjusted odds ratio [OR], 4.10; 95% confidence interval [CI], 1.51-10.96), had higher per capita income (adjusted OR, 3.83; 95% CI, 1.43-10.45), and had less competition for outpatient surgery (adjusted OR, 2.13; 95% CI, 1.02-4.45). Legal considerations and latent need, as measured by case volumes of hospital-based outpatient surgery in 2007, were not associated with the opening of a new ASC.

CONCLUSIONS

Freestanding ASCs opened in advantageous socioeconomic environments with the least amount of competition. Because of their associated efficiency advantages, policy makers might consider strategies to promote ASC diffusion in disadvantaged markets to potentially improve access and reduce costs.

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.

Factors driving physician-hospital alignment in orthopaedic surgery

BACKGROUND

The relationships between physicians and hospitals are viewed as central to the proposition of delivering high-quality health care at a sustainable cost. Over the last two decades, major changes in the scope, breadth, and complexities of these relationships have emerged. Despite understanding the need for physician-hospital alignment, identification and understanding the incentives and drivers of alignment prove challenging.

QUESTIONS/PURPOSES

Our review identifies the primary drivers of physician alignment with hospitals from both the physician and hospital perspectives. Further, we assess the drivers more specific to motivating orthopaedic surgeons to align with hospitals.

METHODS

We performed a comprehensive literature review from 1992 to March 2012 to evaluate published studies and opinions on the issues surrounding physician-hospital alignment. Literature searches were performed in both MEDLINE(®) and Health Business™ Elite.

RESULTS

Available literature identifies economic and regulatory shifts in health care and cultural factors as primary drivers of physician-hospital alignment. Specific to orthopaedics, factors driving alignment include the profitability of orthopaedic service lines, the expense of implants, and issues surrounding ambulatory surgery centers and other ancillary services.

CONCLUSIONS

Evolving healthcare delivery and payment reforms promote increased collaboration between physicians and hospitals. While economic incentives and increasing regulatory demands provide the strongest drivers, cultural changes including physician leadership and changing expectations of work-life balance must be considered when pursuing successful alignment models. Physicians and hospitals view each other as critical to achieving lower-cost, higher-quality health care.

Organizational boundaries of medical practice: the case of physician ownership of ancillary services

Physician ownership of in-office ancillary services (IOASs) has come under increasing scrutiny. Advocates of argue that IOASs allow physicians to supervise the quality and coordination of care. Critics have argued that IOASs create financial incentives for physicians to increase ancillary service volume. In this paper we develop a conceptual framework to evaluate the tradeoffs associated with physician ownership of IOASs. There is some evidence supporting the existence of scope and transaction economies in IOASs. Improvement in flow and continuity of care are likely to generate scope economies and improvements in quality monitoring and reductions in consumer transaction costs are likely to generate transaction economies. Other factors include the capture of upstream and downstream profits, but these incentives are likely to be small compared to scope and transaction economies. Policy debates on the merits of IOASs should include an explicit assessment of these tradeoffs.This research was supported in part by funding from the American Association of Orthopaedic Surgeons (AAOS).

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.

Effect of financial relationships on the behaviors of health care professionals: a review of the evidence

This paper explores the empirical evidence regarding the impact financial relationships on the behavior of health care providers, specifically, physicians. We identify and synthesize peer-reviewed data addressing whether financial incentives are causally related to patient outcomes and health care costs. We cover three main areas where financial conflicts of interest arise and may have an observable relationship to health care practices: (1) physicians' roles as self-referrers, (2) insurance reimbursement schemes that create incentives for certain clinical choices over others, and (3) financial relationships between physicians and the drug and device industries. We found a well-developed scientific literature consisting of dozens of empirical studies, some that allow stronger causal inferences than others, but which altogether show that such financial conflicts of interests can, and sometimes do, impact physicians' clinical decisions. Further research is warranted to document the causal relationship of such changes on health outcomes and the cost of care, but the current base of evidence is sufficiently robust to motivate policy reform.

Patient mix in outpatient surgery settings and implications for Medicare payment policy

In 2008, Medicare implemented a new payment policy for ambulatory surgical centers (ASCs), which aligns the ASC payment system with that used for hospital outpatient departments and reimburses ASCs approximately 65% of what hospitals receive for the same outpatient surgery. The authors assess patient selection across ASCs and hospital outpatient departments for four common surgeries (colonoscopy, hernia repair, knee arthroscopy, cataract repair), using data on procedures performed in Florida from 2004 to 2008. The authors construct measures of patient illness severity and cost risk and find that ASCs benefit from positive selection. Nonetheless, the degree of selection varies by surgery type and patient population. While similar studies in other states are needed, the findings suggest that modifications to the Medicare outpatient payment system may be appropriate to account for the different populations that each setting attracts.

Measuring and improving ambulatory surgery patients' satisfaction

The pressure on perioperative services to improve quality for health care consumers creates both challenges and opportunities. To make positive changes, many health care organizations contract with Press Ganey (PG), which processes an extensive database of more than 9.5 million surveys annually and provides benchmark reports to same-type organizations. To measure and improve ambulatory surgery patient satisfaction at one health care network in northeastern Pennsylvania, the nursing leaders in the ambulatory surgery center and OR undertook a quality improvement project focused on educating perioperative nurses on the use of PG reports. After we reviewed the PG reports and implemented changes with nursing staff members in perioperative areas, PG patient satisfaction scores improved regarding information about delays (4.1%) and center attractiveness (0.2%).

The impact of hospital cardiac specialization on outcomes after coronary artery bypass graft surgery: analysis of medicare claims data

BACKGROUND

Hospital volume has been widely embraced as a proxy measure for hospital quality; little attention has been focused on an alternative quality measure-hospital specialization. Even though specialization occurs on a continuum, previous studies have only focused on a small number of highly specialized hospitals (single-specialty hospitals). Studies on the broad relationship between hospital specialization and outcomes after coronary artery bypass grafting (CABG) are limited.

METHODS AND RESULTS

We conducted a retrospective cohort study of 705 084 Medicare patients (1130 hospitals) who underwent CABG during 2001 to 2005. We stratified hospitals into quintiles, based on their degree of cardiac specialization (proportion of a hospital's Medicare discharges classified as Major Diagnostic Category 5-cardiovascular diseases). We compared patient and hospital characteristics and outcomes across quintiles of cardiac specialization. Patient characteristics were generally similar across quintiles, but mean annual CABG volume increased progressively from quintile 1 (least specialized) to quintile 5 (most specialized). Unadjusted 30-day mortality was similar at hospitals in quintiles 1 to 4 (4.8%), except quintile 5, where mortality was lower (4.3%). A strong inverse association was seen between hospital cardiac specialization and 30-day mortality after adjustment for patient characteristics (P(trend)=0.001). However, this was no longer significant after additional adjustment for CABG volume (P(trend)=0.65). Results were similar for other mortality outcomes and length of stay.

CONCLUSIONS

After accounting for patient characteristics and CABG volume, greater cardiac specialization was not associated with clinically significant improvement in patient outcomes. This study calls into question the benefit of cardiac specialization for the vast majority of CABG-performing US hospitals.

Long-term acute care hospital utilization after critical illness

CONTEXT

Long-term acute care hospitals have emerged as a novel approach for the care of patients recovering from severe acute illness, but the extent and increases in their activity at the national level are unknown.

OBJECTIVE

To examine temporal trends in long-term acute care hospital utilization after an episode of critical illness among fee-for-service Medicare beneficiaries aged 65 years or older.

DESIGN, SETTING, AND PATIENTS

Retrospective cohort study using the Medicare Provider Analysis and Review files from 1997 to 2006. We included all Medicare hospitalizations involving admission to an intensive care unit of an acute care, nonfederal hospital within the continental United States.

MAIN OUTCOME MEASURES

Overall long-term acute care utilization, associated costs, and survival following transfer.

RESULTS

The number of long-term acute care hospitals in the United States increased at a mean rate of 8.8% per year, from 192 in 1997 to 408 in 2006. During that time, the annual number of long-term acute care admissions after critical illness increased from 13,732 to 40,353, with annual costs increasing from $484 million to $1.325 billion. The age-standardized population incidence of long-term acute care utilization after critical illness increased from 38.1 per 100,000 in 1997 to 99.7 per 100,000 in 2006, with greater use among male individuals and black individuals in all periods. Over time, transferred patients had higher numbers of comorbidities (5.0 in 1997-2000 vs 5.8 in 2004-2006, P < .001) and were more likely to receive mechanical ventilation at the long-term acute care hospital (16.4% in 1997-2000 vs 29.8% in 2004-2006, P < .001). One-year mortality after long-term acute care hospital admission was high throughout the study period: 50.7% in 1997-2000 and 52.2% in 2004-2006.

CONCLUSIONS

Long-term acute care hospital utilization after critical illness is common and increasing. Survival among Medicare beneficiaries transferred to long-term acute care after critical illness is poor.

Acute myocardial infarction and coronary artery bypass grafting outcomes in specialty and general hospitals: analysis of state inpatient data

OBJECTIVE

Compare characteristics and outcomes of patients hospitalized in specialty cardiac and general hospitals for acute myocardial infarction (AMI) and coronary artery bypass grafting (CABG).

DATA

2000-2005 all-payor administrative data from Arizona, California, Texas, and Wisconsin.

STUDY DESIGN

We identified patients admitted to specialty and competing general hospitals with AMI or CABG and compared patient demographics, comorbidity, and risk-standardized mortality in specialty and general hospitals.

PRINCIPAL FINDINGS

Specialty hospitals admitted a lower proportion of women and blacks and treated patients with less comorbid illness than general hospitals. Unadjusted in-hospital AMI mortality for Medicare enrollees in specialty and general hospitals was 6.1 and 10.1 percent (p<.0001) and for non-Medicare enrollees was 2.8 and 4.0 percent (p<.04). Unadjusted in-hospital CABG mortality for Medicare enrollees in specialty and general hospitals was 3.2 and 4.7 percent (p<.01) and for non-Medicare enrollees was 1.1 and 1.8 percent (p=.02). After adjusting for patient characteristics and hospital volume, risk-standardized in-hospital mortality for all AMI patients was 2.7 percent for specialty hospitals and 4.1 percent for general hospitals (p<.001) and for CABG was 1.5 percent for specialty hospitals and 2.0 percent for general hospitals (p=.07).

CONCLUSIONS

In-hospital mortality in specialty hospitals was lower than in general hospitals for AMI but similar for CABG. Our results suggest that specialty hospitals may offer significantly better outcomes for AMI but not CABG.

Single Specialty Hospitals and Service Competition

Advocates for physician-owned hospitals specializing in cardiac, orthopedic, and surgical services claim that these facilities induce healthy competition, stimulating improved performance among acute care hospitals. This paper examines the effect of specialty hospital entry on one indicator of competition among hospitals: changes in service provision by general hospitals in local markets. Results suggest that general hospitals are stepping up their own offerings of services that are in direct competition with those of specialty hospitals. Entry of specialty hospitals is also associated with significantly higher growth in high-technology diagnostic imaging services in the general hospitals in those markets.

Coronary revascularization at specialty cardiac hospitals and peer general hospitals in black Medicare beneficiaries

BACKGROUND

Critics have raised concerns that specialty cardiac hospitals exacerbate racial disparities in cardiovascular care, but empirical data are limited.

METHODS AND RESULTS

We used administrative data from the Medicare Provider and Analysis Review Part A and Provider-of-Service files from 2002 to 2005. Multivariable logistic regression models were constructed to examine the likelihood of black Medicare patients being admitted to a cardiac hospital for coronary revascularization when compared with white patients within the same healthcare referral region after accounting for geographic proximity to the nearest hospitals, procedural acuity, and comorbidities. We identified 35 309 patients who underwent coronary artery bypass grafting in 18 healthcare referral regions and 94,525 patients who underwent percutaneous coronary intervention in 20 healthcare referral regions where cardiac hospitals performed these procedures. Patients at cardiac hospitals were more likely to be men and white and have less comorbidity than those at general hospitals. The likelihood of black patients undergoing coronary revascularization at a cardiac hospital was significantly lower for coronary artery bypass grafting (adjusted odds ratio, 0.67; P=0.01) and percutaneous coronary intervention (adjusted odds ratio, 0.63; P<0.0001). However, this relationship was substantially attenuated among black patients living in close proximity (ie, within 10 miles) to cardiac hospitals (adjusted odds ratio for coronary artery bypass grafting, 0.95; P=0.75; adjusted odds ratio for percutaneous coronary intervention, 0.78; P=0.01).

CONCLUSIONS

Black patients were significantly less likely to be admitted at cardiac hospitals for coronary revascularization. Precise reasons for these findings are unclear but suggest complex associations between race and geography in decisions about where to receive care.

The role of chest computed tomography in trauma

Chest computed tomography (CCT) evaluation for trauma encompasses two main objectives: (1) The evaluation of the acutely injured in the search for diagnoses and (2) follow up assessment or diagnosis of pulmonary complications in the hospitalised patient. In the acute phase of evaluation, CCT has become particularly helpful for the diagnosis of blunt thoracic aortic injury (BAI), great vessel injury, extent of lung contusion, occult hemothorax, occult pneumothorax, spinal fractures and spinal cord injuries and to determine the tract of transmediastinal gun shot wounds. In the subacute phase, CCT has gained popularity for diagnosing pulmonary embolism and evaluation of retained hemothorax. Technological advances have lead to better diagnostic capabilities that can be obtained quickly but, particularly in the trauma patient, there is little consistent data supporting an outcome improvement in the majority of patients despite changes in clinical management. Further data is needed to support use of CCT in select trauma patient populations to increase useful diagnostic yield and cost effectiveness.

The Movement of Services Out of the Hospital

Certificate of Need (CON) laws have been used in the United States since the 1960s to restrict the availability of new and expensive technology in the health system. However, as medical technology is used in non-institutional settings, the value of such a regulatory system is called into question. This article examines changes occurring in the health system in the United States and OECD countries such as the movement of technology out of the hospital, the push by manufacturers of medical equipment to have greater sales and expand their markets, the internecine fights between different specialties, and other issues that have served to lead to an out-migration of services from hospitals to physician's offices, clinics and group practices, and specialty hospitals. The future of CON as a form of regulation is discussed.

Rethinking medical professionalism: the role of information technology and practice innovations

CONTEXT

Physician leaders and the public have become increasingly concerned about the erosion of medical professionalism. Changes in the organization, economics, and technology of medical care have made it difficult to maintain competence, meet patients' expectations, escape serious conflicts of interest, and distribute finite resources fairly. Information technology (IT), electronic health records (EHRs), improved models of disease management, and new ways of relating to and sharing responsibility for patients' care can contribute to both professionalism and quality of care.

METHODS

The potential of IT, EHRs, and other practice facilitators for professionalism is assessed through diverse but relevant literatures, examination of relevant websites, and experience in working with medical leaders on renewing professionalism.

FINDINGS

IT and EHRs are the basis of needed efforts to reinforce medical competence, improve relationships with patients, implement disease management programs, and, by increasing transparency and accountability, help reduce some conflicts of interest. Barriers include the misalignment of goals with payment incentives and time pressures in meeting patients' expectations and practice demands. Implementing IT and EHRs in small, dispersed medical practices is particularly challenging because of short-term financial costs, disruptions in practice caused by learning and adaptation, and the lack of confidence in needed support services. Large organized systems like the VA, Kaiser Permanente, and general practice in the United Kingdom have successfully overcome such challenges.

CONCLUSIONS

IT and the other tools examined in this article are important adjuncts to professional capacities and aspirations. They have potential to help reverse the decline of primary care and make physicians' practices more effective and rewarding. The cooperation, collaboration, and shared responsibility of government, insurers, medical organizations, and physicians, as well as financial and technical support, are needed to implement these tools in the United States' dispersed and fragmented medical care system.

Case mix and outcomes of total knee replacement in orthopaedic specialty hospitals

OBJECTIVES

To examine patient characteristics and outcomes of total knee replacement (TKR) in orthopaedic specialty hospitals.

METHODS

We performed a retrospective cohort study in the US Medicare population. We defined specialty hospitals for TKR as centers: (1) that performed >75 TKRs in Medicare recipients in 2000; (2) in which TKR accounted for >7% of all Medicare discharges; and (3) that had <300 beds. We divided specialty hospitals into those with <or=100 beds and those with 101-299 beds. We compared preoperative characteristics and complications among patients undergoing TKR in specialty and nonspecialty centers. We stratified patients according to risk of complications and performed stratum-specific analyses.

RESULTS

A total of 2,417 patients received TKA in 19 specialty hospitals, accounting for 3% of all TKRs in 2000. The specialty hospitals had fewer patients with poverty level income. The smaller "boutique" specialty hospitals had lower complication rates than the larger specialty hospitals and the nonspecialty centers (P value for trend = 0.001). In analyses that adjusted for patient age and sex, low-risk patients had similar outcomes across all hospital categories. However, high-risk patients had statistically significantly greater benefit from treatment in smaller specialty hospitals, with the risk of any adverse event ranging from 1.4% (95% CI, 0%-3.5%) in smaller specialty hospitals to 4.9% (95% CI, 4.4%-5.5%) in low-volume centers.

CONCLUSIONS

Smaller specialty hospitals have low complication rates and are especially beneficial for high-risk patients. Further work should address functional outcomes, costs, and satisfaction in these specialty centers, and evaluate strategies to manage more high-risk patients in specialty centers.

Ambulatory Facility Design and Patients' Perceptions of Healthcare Quality

Objective:

This research examines whether the physical attractiveness of an outpatient practice influences patients' perceptions of healthcare quality, including patient and staff perceptions of the quality of staff-patient interaction.

Background:

Despite the high and increasing percentage of healthcare dollars for care delivered on an outpatient basis, relatively little research has examined the relationship between the design of ambulatory facilities and patient outcomes. Few studies have examined how patients' perceptions of healthcare quality differ in the same outpatient practice before and after a move to a new facility designed to be patient-centered. This study is the second phase of a study comparing patients' perceived quality of care in ambulatory facilities that differ markedly in physical attractiveness.

Methods:

Using both a patient and staff survey, and structured interviews, this study compared staff and patient perceptions of healthcare quality (including staff-patient interactions) before and after a move to a new facility designed to be patient-centered.

Results:

Patients' perceived quality of care, and their perceptions of the quality of interaction with staff, was significantly better in the patient-centered facility. Few differences were found in actual patient-staff interaction behaviors.

Conclusions:

This study is consistent with other studies that examined the relationship among the physical attractiveness of healthcare settings, patient satisfaction, and perceived quality of care. For this reason, the results are more credible than they would be were they inconsistent with other research or were this the only study examining these issues. These results support the value of investing in the physical attractiveness of patient areas in the ambulatory care setting. Further research is needed to identify specific physical elements that contribute to positive attributions related to quality of care, as well as where the “tipping point” is in investments to improve physical attractiveness.

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.