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The effects of cardiac specialty hospitals on the cost and quality of medical care.

Barro JR, Huckman RS, Kessler DP

Bain and Company, USA.

The recent rise of specialty hospitals--typically for-profit firms that are at least partially owned by physicians--has led to substantial debate about their effects on the cost and quality of care. Advocates of specialty hospitals claim they improve quality and lower cost; critics contend they concentrate on providing profitable procedures and attracting relatively healthy patients, leaving (predominantly nonprofit) general hospitals with a less-remunerative, sicker patient population. We find support for both sides of this debate. Markets experiencing entry by a cardiac specialty hospital have lower spending for cardiac care without significantly worse clinical outcomes. In markets with a specialty hospital, however, specialty hospitals tend to attract healthier patients and provide higher levels of intensive procedures than general hospitals.

Published 10 July 2006 in J Health Econ, 25(4): 702-21.
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