Background: The emergence of physician owned specialty hospitals focusing on high margin procedures has generated significant controversy. Yet, it is unclear whether physician owned specialty hospitals differ significantly from non physician owned specialty hospitals and thus merit the additional scrutiny that has been proposed. Our objective was to assess whether physician owned specialty orthopedic hospitals and non physician owned specialty orthopedic hospitals differ with respect to hospital characteristics and patient populations served.
Methods: We conducted a descriptive study using Medicare data of beneficiaries who underwent total hip replacement (THR) (N = 10,478) and total knee replacement (TKR) (N = 15,312) in 29 physician owned and 8 non physician owned specialty orthopedic hospitals during 1999-2003. We compared hospital characteristics of physician owned and non physician owned specialty hospitals including procedural volumes of major joint replacements (THR and TKR), hospital teaching status, and for profit status. We then compared demographics and prevalence of common comorbid conditions for patients treated in physician owned and non physician owned specialty hospitals. Finally, we examined whether the socio-demographic characteristics of the neighborhoods where physician owned and non physician owned specialty hospitals differed, as measured by zip code level data.
Results: Physician owned specialty hospitals performed fewer major joint replacements on Medicare beneficiaries in 2003 than non physician owed specialty hospitals (64 vs. 678, P < .001), were less likely to be affiliated with a medical school (6% vs. 43%, P = .05), and were more likely to be for profit (94% vs. 28%, P = .001). Patients who underwent major joint replacement in physician owned specialty hospitals were less likely to be black than patients in non physician owned specialty hospitals (2.5% vs. 3.1% for THR, P = .15; 1.8% vs. 6.3% for TKR, P < .001), yet physician owned specialty hospitals were located in neighborhoods with a higher proportion of black residents (8.2% vs. 6.7%, P = .76). Patients in physician owned hospitals had lower rates of most common comorbid conditions including heart failure and obesity (P < .05 for both).
Conclusion: Physician owned specialty orthopedic hospitals differ significantly from non physician owned specialty orthopedic hospitals and may warrant the additional scrutiny policy makers have proposed.