Research Activities, May 2010: Market Forces: General hospitals are stepping up specialty services in response to competition from single specialty hospitals

Market Forces
General hospitals are stepping up specialty services in response to competition from single specialty hospitals

Specialty hospitals owned by physicians are one of the fastest-growing segments in health care. Such facilities focus on one area of care, such as cardiac, orthopedic, or general surgical services. Acute care hospitals are stepping up their own offerings in these areas in direct response to serious competition from single specialty hospitals (SSHs), according to a new study. It looked at this phenomenon by analyzing data from the American Hospital Association (AHA). Kathleen Carey, Ph.D., and colleagues at the Department of Veterans Affairs and the Boston University School of Public Health focused on 10 key States where growth of specialty hospitals is increasing, including Arizona, California, Texas, Louisiana, and Ohio.

A total of 70 unique clinical services included in the AHA data were grouped into 3 categories. One category was hospital services that are growing and in direct competition with SSHs. A second category consisted of high-technology diagnostic services offered by hospitals facing stiff competition from SSHs. The final category was composed of safety-net services heavily used by the uninsured and underinsured patients. Such services are normally not offered by SSHs, but are usually available at general hospitals.

Overall, the study found that hospitals are responding to SSHs by engaging in direct competition with them. This was most notable for cardiac catheterization and angioplasty services. A very strong association was also found for growth in high-technology diagnostic services in areas where SSH competition is increasing. Among safety-net services, only trauma centers and burn units appeared to have a positive association with SSH market entry. Competition from orthopedic and surgical SSHs was associated with an increase in the number of freestanding outpatient centers affiliated with hospitals. The study was supported in part by the Agency for Healthcare Research and Quality (HS16541).

See "Single specialty hospitals and service competition," by Dr. Carey, James F. Burgess, Jr., Ph.D., and Gary Y. Young, J.D., Ph.D., in Inquiry 46, pp. 162-171, 2009.

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Research Activities, May 2010: Market Forces: General hospitals are stepping up specialty services in response to competition from single specialty hospitals