The proliferation of heart institutes, cancer centers, orthopedic hospitals, and other niche specialty centers has resulted in a new medical arms race between hospitals and physicians as they compete for patients, according to an article by the Center for Studying Health System Change published in the journal Health Affairs. Although public policy attention has focused on physician-owned specialty hospitals, rapid proliferation of specialty services across settings is a “more pervasive development,” the authors state, and is raising threats to hospitals’ financial health and sparking additional concerns about increasing healthcare costs. And although both hospitals and physicians are claiming that their own service lines are “centers of excellence,” there are scant data that allow consumers to substantiate those claims.
In the 12 nationally representative markets the article examined, hospitals and physicians were developing single-specialty service lines, with the most common focusing on heart (33), cancer (24), and orthopedic care (18). Health plans and purchasers in the 12 communities “believe that modest reductions in prices as a result of increased competition over particular service lines are offset by increased volume of those services as a result of (1) aggressive marketing by providers directly to consumers and (2) specialist physicians’ ability to induce demand for services,” the article states. One way to moderate the competition for patients is for Medicare and private insurers to “narrow the payment gap” between lucrative and less profitable services, the authors write. Read the article.
