Although specialty hospitals have been successful at driving up competition among hospitals, they are also increasing costs without adding quality and efficiency, according to a study released yesterday by the Center for Studying Health System Change, a policy research organization. The study examines three markets with significant specialty hospital activity--Indianapolis; Little Rock, Ark.; and Phoenix. Employers in these markets said that general hospitals responded to the loss of profitable specialty procedures by raising prices on services where there is less competition. Community hospitals were also unable to prevent health plans from contracting with specialty hospitals.
