Posting date: October 25, 2005

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Health Affairs, 10.1377/hlthaff.w5.481
Copyright © 2005 by Project HOPE

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Effects Of Physician-Owned Limited-Service Hospitals: Evidence From Arizona

¹ Jean Mitchell is a professor of public policy in the Georgetown Public Policy Institute, Georgetown University, in Washington, D.C.

^*Corresponding author.

Abstract

In recent years physician ownership of so-called limited-service hospitals has become commonplace in many states lacking certificate-of-need regulations. Empirical evidence documenting the effects of these facilities is sparse. This study compares practice patterns of physician-owners of limited-service cardiac hospitals and physician-nonowners who treat cardiac patients at competing full-service community hospitals. Analyses of six years of Arizona inpatient discharge data show that physician-owners treat higher volumes of profitable cardiac surgical diagnosis-related groups (DRGs), higher percentages of low-severity cases, and higher percentages of cases with generous insurance compared with physician-nonowners who treat cardiac patients in community hospitals.

Key Words: Access To Care, Business Of Health, Consumer Issues, Hospitals, Physicians, State/Local Issues

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