August 4, 2023

Study: Physician-owned hospitals have worse readmissions, other quality metrics

Editor's Note

According to a study from health economics consulting firm Dobson | DaVanzo, submitted to the American Hospital Association (AHA) on August 1, physician-owned hospitals (POHs) "publicly report on fewer Medicare quality measures and perform worse on readmission penalties than full-service community hospitals" AHA August 3 reports. "The study also reinforces previous findings that POHs generally treat a population that is younger, less medically complex, and less likely to be enrolled in Medicare or Medicaid," AHA noted.

The study compared 158 POHs and 1,184 non-POHs in the same market areas and encompassed data from the January 2023 Hospital General Information file and Fiscal Year 2023 Hospital Readmission Reduction Program Supplemental file created by the Centers for Medicare & Medicaid Services.

According to a Becker's Hospital Review August 4 article, the following are some key findings:

  • 6.7% of POHs in the lowest dual-eligibility proportion peer group received the maximum Hospital Readmissions Reduction Program penalty of 3% in fiscal year 2023, compared to 0.5% of non-POHs in the same market
  • POHs scored 1.3 for an average count of facility mortality measures used in the Medicare star ratings program, compared to 4.6 for non-POHs
  • For average count of facility safety measures, POHs scored 2.8 compared to 5 for non-POHs
  • For average count of facility readmission measures, POHs scored 4.3 compared to 7.7 for non-POHs
  • For average count of facility timely and effective care measures, POHs scored 2.9 compared to 6.4 for non-POHs.

According to a Becker's March 28 article, major hospital groups have been ramping up resistance to POHs. AHA noted, however, that "some members of Congress" are proposing "to weaken Medicare’s prohibition on physician self-referral to new [POHs] and ease restrictions on their growth" that have been in place since the enaction of the Affordable Care Act in 2010. 


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