Monday, February 25, 2008

The Argument for Specialty Hospitals

The growth of specialty hospitals has always concerned me. Too often these niche players looked to be siphoning off the most profitable parts of the business leaving the big hospital to charge payers more for their less profitable services--creating higher prices overall.

David Whelan
recently called my attention to an article he just did at Forbes making a strong argument in favor of specialization.

Here is an excerpt:
"Patients have a choice, but it's not widespread yet. It's called the specialty hospital, a center that focuses on the care of a particular body part such as the heart, spine or joints, or on a specific disease such as cancer. There are 200 specialty hospitals in the U.S. (out of 6,000 hospitals overall), and they often deliver services better, more safely and at lower cost. A recent University of Iowa study of tens of thousands of Medicare patients found that complication rates (bleeding, infections or death) are 40% lower for hip and knee surgeries at specialty hospitals than at big community hospitals. A 2006 study funded by Medicare found that patients of all types are four times as likely to die in a full-service hospital after orthopedic surgery as they would after the same procedure in a specialty hospital."
David goes on to point out that in any other industry it is perfectly appropriate for the least efficient and capable competitor to "get wiped out by the nimble newcomer," or at least forced to do a better job.

David's entire article is worth a read.
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