TX specialty hospitals do lucrative business

In Texas, it's good to be a physician-owned specialty hospital--so good that the state legislature may once again discuss limiting physician self-referral to these hospitals. A recent report drafted by the state has concluded that such hospitals get markedly more insured patients and provide less emergency care (avoiding compulsory free care). At the same time, they get more referrals from physician owners, according to the state's "Analysis of Niche Hospitals in Texas and the Financial Impact on General Hospitals."

Texas is home to a high and growing number of physician-owned specialty hospitals, frequently focused on cardiac issues, surgical specialties or orthopedics. Specialty hospitals make up 6 percent of Texas hospitals, up from 2 percent in 2000. The emergence of these facilities has alarmed acute care hospitals, who say that such hospitals cherry-pick the best-paying patients. Among other findings, the report noted that 54 percent of patients seen at Texas specialty hospitals in 2004 were covered by private pay insurance, compared with 31 percent in acute care hospitals, and also suggested that such patients were not as sick as those who ended up at the state's acute care hospitals.

To find out more about the report:
- read this Dallas Business Journal article
- read the state's draft report (.pdf)

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