Cost and Quality of Care in Physician-Owned Hospitals : A Systematic Review

Conceived in an effort to improve clinical operations, patient experience, and medical quality, physician-owned hospitals (POHs) flourished until 2003, when industry concerns over patient selection, cost of care, and overutilization prompted government oversight and legislation. Subsequent government reports have painted a mixed picture of POHs, with some reports examining healthcare competition recommending a repeal of restrictions on POHs.This systematic review compares the cost and quality of the care provided in POHs to that at non-POHs in four distinct service markets: cardiac specialty hospitals, orthopaedic specialty surgical hospitals, general surgical hospitals, and general acute care or community hospitals. Focused factory POHs providing cardiac or orthopedic care were found to provide higher-quality care at lower or comparable cost, whereas evidence regarding general acute care POHs is neutral. Limited available evidence prevents definitive conclusions about general surgical POHs. In light of these findings, policymakers should reconsider restrictions on POHs to invigorate competition in the market and deploy other regulatory tools to address concerns associated with physician hospital ownership