HOSPITALS/PHYSICIANS/POLICY: More data on specialty hospitals suggests the obvious

HSC is out with another study on local markets, and this time it’s looking at specialty hospitals. Not a new tune. HSC finds that purchasers in three local markets where there are plenty of specialty hospitals believe that the hospitals add to overall healthcare costs without improving quality. While purchasers may get lower prices from the new hospitals, they perceive that more procedures are recommended by physicians driving up their number of procedures and therefore overall costs. In addition, traditional community hospitals have been forced to compete by building new facilities, the costs of which get passed onto purchasers in the end, and have been raising their prices for services that specialty hospitals do not offer to compensate for their losses where the specialty hospitals have taken their business.

Yup, it’s all a scam. A war between docs and hospitals with the payers (and the taxpayer) picking up the tab. Of course, as discussed multotimes on THCB, if this was done within the context of some type of fixed budget, then maybe specialty hospitals or teams would be found to be the best way of delivering care. But in a FFS-based cost-unconscious system, they’re just adding to the death of health care affordability by a thousand cuts.

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Categories: Physicians

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Narayanachar Muralimatt Recent comment authors
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Narayanachar Murali
Narayanachar Murali

Let us look at it a different way. If there is a fixed health care budget( say 10%GDP), and you remove all restrictions on building specialty healthcare facilities, allow dual or triple tier healthcare with a basic catastrophic care for all, throw out trial lawyers, remove the “NOT FOR PROFIT” tax shelter for hospitals, eliminate payment differentials for procedures done in the office or hospital, stop lobbying of FDA and governement by drug companies, create a list of nearly free 200 essential drugs, allow people who need care to go where they please ( so long as the person treating… Read more »


The big question is (or soon will be): will consumers (in a defined contribution world) be willing to pick up the tab for more surgeries and more cost per surgery?