Are the Affordable Care Act Restrictions Warranted? A Contemporary Statewide Analysis of Physician-Owned Hospitals.

Abstract

The Affordable Care Act placed a moratorium on physician-owned hospital (POH) expansion. Concern exists that POHs increase costs and target healthier patients. However, limited historical data support these claims and are not weighed against contemporary measures of quality and patient satisfaction. The purpose of this study was to investigate the quality, costs, and efficiency across hospital types. One hundred forty-five hospitals in a single state were analyzed: 8 POHs; 16 proprietary hospitals (PHs); and 121 general, full-service acute care hospitals (ACHs). Multiyear data from the Centers for Medicare and Medicaid Services Medicare Cost Report and the statewide Health Care Cost Containment Council were analyzed. ACHs had a higher percentage of Medicare patients as a share of net patient revenue, with similar Medicare volume. POHs garnered significantly higher patient satisfaction: mean Hospital Consumer Assessment of Healthcare Providers and Systems summary rating was 4.86 (vs PHs: 2.88, ACHs: 3.10; P = .002). POHs had higher average total episode spending ($22,799 vs PHs: $18,284, ACHs: $18,856), with only $1435 of total spending on post-acute care (vs PHs: $3867, ACHs: $3378). Medicare spending per beneficiary and Medicare spending per beneficiary performance rates were similar across all hospital types, as were complication and readmission rates related to hip or knee surgery. POHs had better patient satisfaction, with higher total costs compared to PHs and ACHs. A focus on efficiency, patient satisfaction, and ratio of inpatient-to-post-acute care spending should be weighted carefully in policy decisions that might impact access to quality health care.