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Study Finds Doctor-Owned Facilities Get the Best Insured Patients

By Jesse Stanchak, CQ Staff

March 19, 2008 -- Well-insured patients are more likely to be referred to a physician-owned, ambulatory surgical center (ASC) rather than hospital outpatient departments, limiting access to the best care and possibly undermining hospitals' ability to cover uninsured patients, according to a study released Tuesday by the journal Health Affairs.

Lead study author Jon Gabel said hospitals are put at a disadvantage when doctor-held facilities take a disproportionate number of well-insured patients.

"Hospitals have traditionally used profits from privately insured patients to subsidize care for uninsured patients and Medicaid enrollees. The worry has been that physicians with ownership stakes in ASCs would unravel this safety net by directing lucrative patients to their own facilities while sending low-paying patients elsewhere," said Gabel, a senior fellow in the Washington office of the National Opinion Research Center. "Based on our findings, that's exactly what's happening, and the threat to the safety net grows as the role of physician-owned ASCs in our health care system increases."

The study looked at outpatient ASC referrals from 2003 in the Pittsburgh and Philadelphia, Pa. metropolitan areas coming from the top 50 percent of referring doctors. It found that these doctors referred 91.2 percent of privately insured patients to ASC facilities and sent just under 8.7 percent to a hospital outpatient department. However, for patients on Medicaid, the rate of referral to an ASC facility was just 55.4 percent. In addition, the study found that the top-referring doctors are much less likely to see a Medicaid patient. Even though 11 percent of Pennsylvanians are covered by the government program, they only make up 1.4 percent of top-referring doctors' patients.

The study authors said they began the study trying to examine possible financial motives for doctors referring patients to doctor-owned facilities. When information about which facilities doctors owned proved unavailable, they began examining patterns in high-referring doctors as a proxy, they said. However, the findings also have financial significance, they said, since hospitals rely on well-insured patients to help pay for the care of uninsured and Medicaid patients.

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