Posting date: August 9, 2005

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Health Affairs, 10.1377/hlthaff.w5.361
Copyright © 2005 by Project HOPE

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Specialty Versus Community Hospitals: What Role For The Law?

¹ Sujit Choudhry is an associate professor at the Faculty of Law, Faculty of Medicine, and Joint Centre for Bioethics, University of Toronto (Ontario).
² Niteesh Choudhry is a staff physician and an instructor in medicine, Division of Pharmacoepidemiology and Pharmacoeconomics, Department of Medicine, Brigham and Women's Hospital and Harvard Medical School, in Boston, Massachusetts.
³ Troyen Brennan is a professor of medicine at Harvard Medical School.

^*Corresponding author.

Abstract

U.S. health care has long featured a struggle between regulation and markets as vehicles of reform, and the community hospital is at the center of this struggle. The key to its financial viability is cross-subsidization, whereby revenues from insured patients subsidize the care of the uninsured and underinsured, and profits from well-compensated services support those operating at a loss. Cross-subsidization has been challenged by efforts to move highly compensated services and well-insured patients to ambulatory surgical centers and specialty hospitals. We review the ongoing battle between through a legal lens and offer conjectures about the outcome. Refined certificate-of-need regulation may be the preferable policy choice.

Key Words: Business Of Health, Health Reform, Hospitals, Legal/Regulatory Issues, State/Local Issues

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