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Eyes of Medicine Are on Specialty Hospitals : Health Boon or Marketing Gimmick?

November 02, 1986|JUBE SHIVER Jr. | Times Staff Writer

For 18 years, the Los Alamitos Medical Center, like other general care hospitals, has stood as an all-purpose answer to most of its community's medical needs--treating everything from cancer to hernias.

But next year, the company that owns the medical center, Los Angeles-based National Medical Enterprises, will open an unusual new competitor next door: a $7.2-million, 142-bed hospital that treats only Alzheimer's disease.

Taking a cue from the nation's 500,000 doctors who have splintered into 81 medical practice specialties in the last century, National Medical Enterprises and other hospital chains are launching a controversial trend in health care by opening hospitals that treat only one ailment or type of patient.

"Significant developments in the nation's health-care marketplace have compelled us to shift our emphasis from acute care to specialty hospitals and long-term care," NME Chairman Richard K. Eamer told the company's annual shareholders meeting in October. "These (specialty) markets . . . represent areas of tremendous potential growth for NME."

FOR THE RECORD
Los Angeles Times Sunday November 9, 1986 Home Edition Business Part 4 Page 2 Column 2 Financial Desk 1 inches; 25 words Type of Material: Correction
A medical device illustrating a Nov. 2 story on specialty hospitals was a Phoroptor. A photo caption on page one of the Business section incorrectly identified it as a slit lamp.

With industry and government cost-cutting measures siphoning away patients and profits from traditional hospitals, chains are opening hospitals specializing in such areas as sports medicine, tuberculosis, AIDS, eye surgery, Alzheimer's disease, physical rehabilitation and the care of women.

Though the estimated 700 specialty hospitals make up only 11% of the nation's 6,000 hospitals, according to the Chicago-based American Hospital Assn., experts say they are fast becoming a popular new alternative in the increasingly competitive $426-billion-a-year health-care market, which has seen the average hospital occupancy rate decline to about 65% from 76% in 1980, according to the AHA.

"Specialty hospitals are a real growth area," said James D. Houy, group vice president of the American Hospital Assn. "Hospitals and health care in general are becoming more market and consumer driven. It used to be the hospital (that) decided what was best for people, now consumers are sort of in the driver's seat."

Free-standing specialty hospitals are unlike smaller enterprises such as Humana's Heart Institute in Louisville, Ky., and other special centers, which may have their own names but basically are part of larger general medical centers. The specialty hospitals typically are independent operations, often with 75 or more beds.

Specialty hospitals promise that they can focus greater attention and resources on treating certain medical problems. And by treating only one kind of patient, proponents say, they are in a position to gather a wealth of medical data that could help researchers find better and less expensive care.

"To (be) totally dedicated to specialized surgery is a much more desirable way of operating," said Gordon Smith, executive director of American Assn. of Eye and Ear Hospitals in Birmingham, Ala.

Eye hospitals were among the first specialized facilities, and they are seeing a new spurt of growth. Smith said the number of free-standing eye hospitals had remained at about 10 for nearly a decade. But interest has picked up, and Smith said he knows of three new eye hospitals expected to open in the next year.

Critics, however, call specialty hospitals an expensive marketing gimmick, in which the cost of care can outstrip treatment in a general hospital. They also say that some specialty hospitals potentially could put patients at medical risk because such hospitals are unprepared to deal with a broad range of illnesses.

"A specialty hospital is not equipped to deal with anything but its specialty," said Arnold S. Realman, editor of the New England Journal of Medicine and a medical professor at Harvard University.

"Unfortunately, that's not the way sickness comes--discretely wrapped up in neat packages," Realman continued. "I wouldn't want my wife to be taken care of in a women's hospital, for instance. As a physician I know that gynecological problems can spread to other parts of her body."

While the emergence of specialty hospitals has stirred controversy, they are not new.

Tuberculosis hospitals were common between World War I and II and eye hospitals have been around since the 19th Century, according to Rosemary Stevens, a professor of history at the University of Pennsylvania, who has written several books on American medicine.

The newest specialty hospitals, however, have sprouted in response to government rules that set less stringent limits on reimbursements for certain types of specialty care--such as physical rehabilitation and long-term care. They also are capitalizing on increased public awareness about health care and the propensity of some groups--women, for example--to enter the hospital more frequently than men.

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