Case study: Physician-owned hospitals remain profitable

As FierceHealthcare readers know, physician-owned hospitals are a big bone of contention with hospitals. In fact, the American Hospital Association would like to ban doctors completely from referring patients to hospitals they own, largely because physician-owned facilities often take the highest-margin cases and leave hospitals with unprofitable patients.

This drama currently is playing out in Dallas-Fort Worth, where the metro area may have more doctor-owned hospitals than any other part of the country. That's because Baylor Medical Center actually supports physicians in owning hospitals--and takes a stake in those facilities.

Thanks to Baylor's support, 22 doctor-owned hospitals have blossomed there, out of a total of 226 physician-owned facilities in the entire country, and another 23 are under development.

Right now, about one-fifth of Baylor's almost $3.5 billion in annual operating revenue flows from hospitals the medical center co-owns with doctors. And in what must be a record, about one out of every nine of its 4,500-doctor panel owns a stake on one of those hospitals.

Given the unusual prevalence of doctor-owned hospitals, it'd be interesting to see whether hospitals other than Baylor are being starved for profitable patients. If that isn't happening, the AHA's argument doesn't looks so convincing, does it?

To learn more about this story:
- read this Kaiser Daily News piece

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