Impact of Specialty Hospitals on Procedure Utilization

University Of Michigan At Ann Arbor, Ann Arbor MI

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Abstract

[unreadable] DESCRIPTION: Specialty hospitals, which provide care limited to specific conditions or procedures, are opening at a rapid pace across the United States. Chief among the concerns about the rise in specialty hospitals is their potential deleterious effect on local, full-service general hospitals. Specialty hospitals tend to focus on the most lucrative services such as cardiovascular and orthopedic procedures. As they siphon away the most "profitable" services, many worry about the financial viability of competing general hospitals and ultimately their ability to provide unprofitable but essential services such as emergency care. A second concern is that the growth of specialty hospitals could increase overall utilization of health care services. Because specialty hospitals are usually owned in part by the physicians who work there, particularly strong financial incentives could further fuel "supplier-induced" demand and the use of selected procedures. Although both concerns have face validity, neither has been examined empirically. For these reasons, we propose to study two related issues: 1) What impact does a specialty hospital's opening have on procedural volumes at competing general hospitals?; and 2) How do specialty hospitals effect overall utilization of procedures across a population? We will use of national Medicare data (1994-2002) to identify specialty hospitals and those general hospitals providing similar services in the same hospital referral regions (HRRs). Focusing on 4 procedures (coronary artery bypass grafting, percutaneous coronary intervention, total hip arthroplasty, and total knee arthroplasty), our Specific Aim 1 will first examine procedural volumes at general hospitals before and after the introduction of specialty hospitals. Our Specific Aim 2 will then assess the impact of specialty hospitals on population-based rates for the four procedures at the HRR-level. Our findings will help policy-makers better understand the relationship between specialty hospitals and procedural utilization, especially as Congress struggles with the question of whether to make a recent moratorium on new specialty hospital construction permanent. [unreadable] [unreadable] [unreadable]