Physician-owned hospitals can save more than $1B annually: Report

Total payments for some of the most expensive diagnostic groups were between 8% to 15% lower in physician-owned hospitals than traditional facilities, a report analyzing 2019 Medicare data found.

Such numbers could equate to $1.1 billion in savings for 20 diagnosis groups in traditional hospital settings if reimbursements had been at the same rate as physician-owned facilities, according to the report. The report was spearheaded by Robert Aseltine Jr., PhD, a professor at Farmington, Conn.-based UConn Health, and Gregory Matthews, PhD, an associate professor at Loyola University Chicago.

"Our analysis indicates that substantial savings to the Medicare program could be achieved were traditional hospitals able to provide care at the same cost as POHs in their area," the report authors concluded.

Congress now has further data to support more physician-owned hospitals, said Michael Darrouzet, vice president and board director of the Physicians Advocacy Institute and executive vice president and CEO of the Texas Medical Association.

"Hospitals owned by physicians promise significant cost savings when it comes to Medicare patients' most expensive medical conditions," he said in an Oct. 19 news release. "Better quality and notable cost savings to patients and taxpayers is a clear signal that physician-owned hospitals is a policy worthy of adoption."

Hospital advocacy groups such as the American Hospital Association continue to largely oppose such physician-owned systems, arguing they can increase patient risk and that such systems cherry-pick patients.

The report, which said populations treated both in traditional settings and physician-owned facilities were not significantly different, used data from 186 physician-owned hospitals.

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