Deeper Dive Into Data on Physician-Owned Hospitals
Dr. Glatter: We need to really focus on that. I’ll agree with you on that.
There was a March 2023 report from Dobson | DaVanzo. It showed that physician-owned hospitals had lower Medicaid, dual-eligible, and uncompensated care and charity care discharges than full-service acute care hospitals. Physician-owned hospitals had less than half the proportion of Medicaid discharges compared with non–physician-owned hospitals. They were also less likely to care for dual-eligible patients overall compared with non–physician-owned hospitals.
In addition, when COVID hit, the physician-owned hospitals overall — and again, there may be exceptions — were not equipped to handle these patient surges in the acute setting of a public health emergency. There was a hospital in Texas that did pivot that I’m aware of — Renaissance Hospital, which ramped up a long-term care facility to become a COVID hospital — but I think that’s the exception. I think this report raises some valid concerns; I’ll let you rebut that.
Dr. Miller: A couple of things. One, I am not aware that there’s any clear market evidence or a systematic study that shows that physician-owned hospitals had trouble responding to COVID. I don’t think that assertion has been proven. The study was funded by the hospital industry. First of all, it was not a peer-reviewed study; it was funded by an industry that paid a consulting firm. It doesn’t mean that we still shouldn’t read it, but that brings bias into question. The joke in Washington is, pick your favorite statistician or economist, and they can say what you want and have a battle of economists and statisticians.
For example, in that study, they didn’t include the entire ownership universe of physician-owned hospitals. If we go to the peer-reviewed literature, there’s a great 2015 BMJ paper showing that the Medicaid payer mix is actually the same between physician-owned hospitals vs not. The mix of patients by ethnicity — for example, think about African American patients — was the same. I would be more inclined to believe the peer-reviewed literature in BMJ as opposed to an industry-funded study that was not peer-reviewed and not independent and has methodological questions.
Dr. Glatter: Those data are 8 years old, so I’d like to see more recent data. It would be interesting, just as a follow-up to that, to see where the needle has moved — if it has, for that matter — in terms of Medicaid patients that you’re referring to.
Dr. Miller: I tend to be skeptical of all industry research, regardless of who published it, because they have an economic incentive. If they’re selecting certain age groups or excluding certain hospitals, that makes you wonder about the validity of the study. Your job as an industry-funded researcher is that, essentially, you’re being paid to look for an answer. It’s not necessarily an honest evaluation of the data.
Dr. Glatter: I want to bring up another point about the Hospital Readmissions Reduction Program (HRRP) and the data on how physician-owned hospitals compared with acute care hospitals that are non–physician-owned and have you comment on that. The Dobson | DaVanzo study called into question that physician-owned hospitals treat fewer patients who are dual-eligible, which we know.
Dr. Miller: I don’t think we do know that.
Dr. Glatter: There are data that point to that, again, looking at the studies.
Dr. Miller: I’m saying that’s a single study funded by industry as opposed to an independent, academic, peer-reviewed literature paper. That would be like saying, during the debate of the Inflation Reduction Act (IRA), that you should read the pharmaceutical industries research but take any of it at pure face value as factual. Yes, we should read it. Yes, we should evaluate it on its own merits. I think, again, appropriately, you need to be concerned when people have an economic incentive.
The question about the HRRP I’m going to take a little broader, because I think that program is unfair to the industry overall. There are many factors that drive hospital readmission. Whether Mrs Smith went home and ate potato chips and then took her Lasix, that’s very much outside of the hospital industry’s control, and there’s some evidence that the HRRP increases mortality in some patient populations.
In terms of a quality metric, it’s unfair to the industry. I think we took an operating process, internal metric for the hospital industry, turned it into a quality metric, and attached it to a financial bonus, which is an inappropriate policy decision.