Health Affairs, 25, no. 5 (2006): w337-w343 (Published online 25 July 2006) doi: 10.1377/hlthaff.25.w337 © 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-Service Lines: Salvos In The New Medical Arms Race

Hospitals and physicians are developing and marketing discrete and profitable specialty-service lines. Although closely affiliated specialist physicians are central to hospitals’ service-line products, other physicians compete directly with hospitals via physician-owned specialty facilities. Specialty-service lines may be provided in a variety of settings, both inside and outside traditional hospital walls. Thus far, the escalating battle between hospitals and physicians for control over specialty services has not affected hospital profitability. However, as the scope of care that can be safely performed in the outpatient arena expands, physician competition for control over specialty services may threaten hospitals’ financial health.

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