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Capitol Health Call
April 13, 2005

Physician-Owned Hospitals

JAMA. 2005;293(14):1718. doi:10.1001/jama.293.14.1718-a

The current moratorium on construction of new physician-owned specialty hospitals should be extended until next January, the Medicare Payment Advisory Commission (MedPAC) advised Congress on March 8.

The moratorium is set to expire on June 8. MedPAC chairman Glenn M. Hackbarth said it should be extended to allow more time to assess whether such facilities foster or deter quality health care delivery.

Proponents argue that physician-owned specialty hospitals operate more efficiently and have higher-quality outcomes than conventional community hospitals because they take advantage of financial incentives for physicians and hospitals. But skeptics counter that these facilities compete unfairly by concentrating on only the most lucrative procedures and treating the healthiest and best-insured patients, leaving community hospitals to care for the sickest and poorest patients. Self-referral by physician investors is also a concern.

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