Health Affairs, 25, no. 1 (2006): 119-129 doi: 10.1377/hlthaff.25.1.119 © 2006 by Project HOPE	New Online   Pay Cuts For Medicare Docs   Access To Care Woes   Public Coverage More Efficient   Empowering Consumers

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Specialty Hospitals

Do Physician-Owned Cardiac Hospitals Increase Utilization?

This paper looks at whether physicians’ investment in heart hospitals during 1997–2001 was followed by an increase in the number of relatively profitable cardiac surgeries paid for by Medicare or in a shift toward operating on healthier (more profitable) Medicare patients. Although markets with physician-owned hospitals had slightly above-average growth rates in profitable cardiac surgeries during this period, the magnitude of the increase was small and statistically significant only for bypass surgery. There was no increase in the proportion of surgeries performed on healthier patients. These findings contrast with earlier studies of less-invasive services such as diagnostic imaging.

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