Publication Type: Abstract
Abstract: OBJECTIVES. Single specialty hospitals (SSHs) are a small but rapidly growing genre among U.S. hospitals. These providers, the majority of which are owned by physicians who refer patients to them, have raised considerable controversy over whether they promote economic efficiency though specialization or engender unfair competition. We undertake a broad based approach to investigating several benchmarks that jointly assess whether physician-owned SSHs are enhancing the competitive process in the U.S. hospital industry. These include cost efficiency, economies of scale and scope, and pricing for private payers.
DATA AND MEASURES. The primary databases are the Medicare Cost Reports, the American Hospital Association Annual Survey, and state discharge abstracts for the three states in which physician-owned SSHs are most heavily concentrated: Texas, California and Arizona. We examine three specialties: cardiac, orthopedic, and surgical hospitals for the years 1998 through 2004. For comparison, we choose competitor hospitals defined as those offering the same services and located in the same markets (identified as Hospital Referral Regions in the Dartmouth Atlas of Health Care). Key variables include measures of hospital total cost, discharges, length of stay, outpatient visits, case-mix, severity, quality, input price, disproportionate share of poor patients, teaching, ownership, and system affiliation.
ANALYSES. The basic analytic structure is a multiple output hospital total variable cost function estimated using stochastic frontier regression techniques for longitudinal data. This method will allow us to produce hospital specific inefficiency measures. We develop several groupings by which we compare inefficiency differences among SSH and competitor hospitals using parametric and non-parametric test of significance, and taking into account for-profit status, and system membership. We also estimate the cost functions for SSH and competitors separately in order to calculate measures of scale and scope economies for each hospital type. Finally, we construct average SSH vs. competitor hospital price indexes based on prevalent DRGs, standardized to control for patient characteristics, case-mix, and severity. We perform several analyses of mean price differences across various hospital groupings using parametric and nonparametric tests of significance.
SIGNIFICANCE. As of December 2003, Congress has declared a moratorium on physician referrals of Medicare and Medicaid patients to SSHs. The hospital industry is strongly advocating that the moratorium be made permanent. Yet in a March 2005 Report to Congress in support of the moratorium, MedPAC explicitly stated that it does not want to put an end to development of SSHs before gaining a fuller understanding of their efficiency benefits. Yet to date, no one has established the knowledge base that would support a laissez-faire policy. This research offers the first solid evidence on this matter by informing Congress as well as hospitals, judges, and policy makers on the economic logic of organization of hospital services around single specialties.

Publication Type: Abstract
Abstract: Authors: John E. Schneider (1,2) (john-schneider@uiowa.edu); Robert L. Ohsfeldt (3); Michael A. Morrisey (4); Pengxiang Li (1); Bennet A. Zelner (5); and Thomas R. Miller (1). [(1) Department of Health Management and Policy, University of Iowa; (2) Center for Research in the Implementation of Innovative Strategies in Practice (152) Iowa City VA Medical Center; (3) Department of Health Policy and Management, School of Rural Public Health, Texas A&M Health Science Center; (4) Department of Health Care Organization and Policy, and Lister Hill Center for Health Policy, University of Alabama Birmingham; (5) Haas School of Business, University of California Berkeley]

Title: The Effects of Specialty Hospitals on General Hospital Operating Margins, 1997-2003

Rationale: A recently expired moratorium on Medicare payments to new specialty hospitals was predicated in part on concern that the financial stability of general hospitals was being eroded by competition from specialty hospitals, thereby impairing their ability to cross-subsidize indigent care. If this were the case, general hospital operating margins in markets with specialty hospitals are expected to be lower, controlling for other factors affecting operating margins.

Objectives: Using a database of U.S. general hospitals and a sample of specialty hospitals from 1997 to 2003, we conduct econometric analyses of general hospital operating margins in markets with and without specialty hospitals.

Methodology: Data is from Medicare HCRIS Cost Reports, the American Hospital Association, a survey of specialty hospitals, and the Area Resource File. These sources were combined to form a panel data set of approximately 3000 hospitals over the seven year time period 1997 to 2003. Four different model specifications were compared: (1) exogenous entry with hospital random effects; (2) exogenous entry with hospital fixed effects; (3) endogenous entry with hospital fixed effects, where lagged mean county-level general hospital profit margin and certificate of need (CON) status serve as the instruments; and (4) endogenous entry with hospital fixed effects, using only CON status as an instrument.

Results: Counties with at least one specialty hospital consistently had higher mean operating margins than counties without specialty hospitals (p ≤ 0.05). In all four models, including the endogenous entry models, the presence of one or more specialty hospitals in the market was associated with higher general hospital profit margins (p ≤ 0.05).

Conclusions: Contrary to the conjecture that entry by specialty hospitals erodes the overall operating profits of general hospitals, general hospitals residing in markets with at least one specialty hospital have higher profit margins than those that do not compete with specialty hospitals.

Publication Type: Abstract
Abstract: Hypothesis: Some hospital characteristics are associated with pre-hospital collaboration for terrorism response.

Methods: The 2003 National Hospital Ambulatory Medical Care Survey included a bioterrorism supplement. The multi-stage sampling frame included 112 geographic primary sampling units and 546 hospitals with emergency departments. A written questionnaire was given to administrators by field representatives. The data were weighted by inverse selection probability, to yield nationally representative estimates. Dependent variables were inclusion in hospital plans of emergency medical services (EMS), hazardous materials teams (HAZMAT), fire departments and law enforcement, and collaboration with them in terrorism response drills. Independent variables were teaching hospitals, medical school and residency affiliation, bed size, ownership, JCAHO accreditation and urban-rural location. Of 462 in-scope hospitals, 399 responded (86%). Chi-square analysis was done in SUDAAN-9. Results at p<0.05 were significant.

Results: 95% of hospitals planned to contact outside entities during a terrorism incident (78% law enforcement, 72% EMS, 66% fire departments, and 58% HAZMAT). Government hospitals were less likely to involve HAZMAT than other hospitals (p=0.04). 87% of hospitals staged mass casualty drills with other organizations (71% EMS, 67% fire departments, 65% law enforcement, and 44% HAZMAT). EMS collaboration was more likely for larger hospitals (p=0.01), but less so for those with medical school affiliations (p=0.02). Fire department collaboration was more likely for larger hospitals (p<0.01). Law enforcement collaboration was more likely for hospitals with JCAHO accreditation (p=0.01) and larger hospitals (p=0.01). HAZMAT collaboration was more likely for teaching hospitals (p<0.01), residencies (p=0.02), larger hospitals (p<0.01), and urban hospitals (p=0.01). Proprietary hospitals were most likely to collaborate with HAZMAT, and government hospitals were least likely (p=0.02).

Conclusions: Although most hospitals involve outside organizations in their emergency plans and drills, many do not include those familiar to emergency departments. Having 200 or more beds was the characteristic most associated with collaboration. The other factors associated with HAZMAT collaboration suggest availability of discretionary resources as a common factor. Medical school affiliation is the only hospital characteristic negatively associated with collaboration. The reasons for this deserve further research.

Publication Type: Conference Paper/Unpublished Manuscript
Review Method: Peer Reviewed
Abstract: The study maps the distribution of diagnosis, survival rate and demographic profile of inpatients in primetime hospital drama and compares the results with actual hospital data. Complete seasons of ER, Chicago Hope and Grey's Anatomy are content analyzed and compared with a survey of US hospitals. In comparison with real-world inpatients, TV hospital patients have a lower representation of Hispanics, senior citizens, infants and women in confinement and a higher representation of white middle-aged males. The medical diagnosis of TV inpatients is biased towards dramatic diseases like mood disorders and medical problems that are abundant with gore such as injuries. The mortality rate among TV inpatients is nearly nine times higher than that of inpatients in the real world. The results are discussed from the perspectives of media system dependency theory and cultivation theory.

Publication Type: Conference Paper/Unpublished Manuscript
Review Method: Peer Reviewed
Abstract: This paper concerns how the components of organizational identity shared by Catholic hospitals in the U.S. are associated with the provision of emergency contraception, a treatment that is discouraged but not formally forbidden by the Catholic church. I argue that hospitals with stronger and more salient Catholic health care identities are less likely than hospitals with weaker and less salient Catholic identities to provide emergency contraception. Data on 540 Catholic hospitals, of which 9 percent- provide this treatment, are analyzed using logistic regression. I find that hospitals that belong to Catholic multi-hospital systems, have a large number of high-tech services, and provide infertility treatment are less likely to provide emergency contraception, while hospitals that have a large number of compassionate care services are more likely.