Preliminary MedPAC Report Examines Competition Issues Related to Specialty Hospitals
Specialty hospitals treat a larger percentage of healthier Medicare beneficiaries and a smaller percentage of low-income patients than full-service facilities, according to a preliminary report released by the Medicare Payment Advisory Commission, Bloomberg/Philadelphia Inquirer reports.
For the report, MedPAC staff members visited three markets with specialty hospitals: Austin, Texas; Wichita and Manhattan, Kan.; and Sioux Falls, S.D. Almost two-thirds of U.S. specialty hospitals are located in Texas, Kansas and South Dakota, which do not require state approval for construction of the facilities.
The report found that specialty hospitals "are an attractive alternative for patients and their families" and have forced full-service facilities to become more competitive. In addition, the report found that physicians who hold ownership stakes in specialty hospitals refer healthier Medicare beneficiaries to the facilities rather than to full-service hospitals.
The final MedPAC report, scheduled for release in March 2005, will help Congress determine whether to extend a moratorium on the construction of specialty hospitals enacted under the new Medicare law. "Release of the preliminary report highlights the ongoing struggle between community hospitals and specialized hospitals over the moratorium," according to Lehman Brothers policy analyst Rami Armon.
Carmela Coyle, senior vice president of the American Hospital Association, which supports an extension of the moratorium, said that the report "certainly verifies everything we hear from community hospitals." She added that MedPAC is "looking at all the right issues: conflict of interest, referrals and the community safety net" (Hallam, Bloomberg/Philadelphia Inquirer, 9/13).