Study: Physician-Owned Hospitals Perform Worse on Readmissions, Report on Fewer Quality Measures

As some members of Congress propose to weaken Medicare’s prohibition on physician self-referral to new physician-owned hospitals and ease restrictions on their growth, new data from Dobson | DaVanzo show that POHs publicly report on fewer Medicare quality measures and perform worse on readmission penalties than full-service community hospitals. The study also reinforces previous findings that POHs generally treat a population that is younger, less medically complex and less likely to be enrolled in Medicare or Medicaid.

“This new analysis adds to more than 15 years of research suggesting that POHs select their patients by avoiding less profitable Medicaid and uninsured patients, treat fewer medically complex patients, and provide fewer emergency services,” AHA and the Federation of American Hospitals note in a one-pager on the report. “Beyond validating findings by the Government Accountability Office, Health and Human Services Office of Inspector General, and the Medicare Payment Advisory Commission that POHs do not treat the same scope, complexity, or acuity of patients as non-POHs within the same market, this analysis also shows that POHs have higher average penalties for readmissions compared to full-service community hospitals. In short, by choosing the healthiest and wealthiest patients, POHs pose program integrity, access and health equity risks for the Medicare program.”