Specialty and full-service hospitals: a comparative cost analysis.

Abstract:

OBJECTIVE:To compare the costs of physician-owned cardiac, orthopedic, and surgical single specialty hospitals with those of full-service hospital competitors. DATA SOURCES:The primary data sources are the Medicare Cost Reports for 1998-2004 and hospital inpatient discharge data for three of the states where single specialty hospitals are most prevalent, Texas, California, and Arizona. The latter were obtained from the Texas Department of State Health Services, the California Office of Statewide Health Planning and Development, and the Agency for Healthcare Research and Quality Healthcare Cost and Utilization Project. Additional data comes from the American Hospital Association Annual Survey Database. STUDY DESIGN:We identified all physician-owned cardiac, orthopedic, and surgical specialty hospitals in these three states as well as all full-service acute care hospitals serving the same market areas, defined using Dartmouth Hospital Referral Regions. We estimated a hospital cost function using stochastic frontier regression analysis, and generated hospital specific inefficiency measures. Application of t-tests of significance compared the inefficiency measures of specialty hospitals with those of full-service hospitals to make general comparisons between these classes of hospitals. PRINCIPAL FINDINGS:Results do not provide evidence that specialty hospitals are more efficient than the full-service hospitals with whom they compete. In particular, orthopedic and surgical specialty hospitals appear to have significantly higher levels of cost inefficiency. Cardiac hospitals, however, do not appear to be different from competitors in this respect. CONCLUSIONS:Policymakers should not embrace the assumption that physician-owned specialty hospitals produce patient care more efficiently than their full-service hospital competitors.

journal_name

Health Serv Res

journal_title

Health services research

authors

Carey K,Burgess JF Jr,Young GJ

doi

10.1111/j.1475-6773.2008.00881.x

subject

Has Abstract

pub_date

2008-10-01 00:00:00

pages

1869-87

issue

5 Pt 2

eissn

0017-9124

issn

1475-6773

pii

HESR881

journal_volume

43

pub_type

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