In Dallas, doctor-owned hospitals are common and lucrative, but do they add to costs?

Sep 21 2009

Doctor-owned hospitals prove to be lucrative, as seen at a Dallas hospital system, while opinions vary about their benefits.

The Dallas Morning News reports: "The American Hospital Association wants to ban doctors from referring patients to hospitals they own, because 'the effect on health delivery and costs in communities can be devastating.' Yet Baylor Health Care System says doctor-owned hospitals, like its Baylor Medical Center at Frisco, can serve patients better because they focus on doing a few things extremely efficiently and well." 

Dallas-Fort Worth is a place to test the argument. "No metro area has more doctor-owned hospitals, in large part because of Baylor. About one-fifth of Baylor's nearly $3.5 billion in annual operating revenue is tied to hospitals that it owns with physicians. About one in every nine of its nearly 4,500 affiliated doctors has an ownership stake in a system hospital. When physicians own hospitals, critics say, the risk of medical judgment being influenced by the allure of making more money is too great. It gives doctors extra incentives to cherry-pick the best-insured and least-sick patients, and prescribe unnecessary procedures."

"Of 226 doctor-owned hospitals in the country, 22 are in the Dallas-Fort Worth area, according to Physician Hospitals of America, a trade group. Another 23 are in development here, the association says." (Jacobson, 9/21).