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Hospitals narrow their scope

More facilities limit care to lucrative specialties such as cardiology and orthopedics. Some see potential conflicts.

January 05, 2004|Daniel Costello

BAKERSFIELD — "An entire hospital dedicated to fighting heart disease" goes the motto at Bakersfield Heart Hospital, a two-story red-and-beige building with a glass exterior that resembles a modern bus terminal more than a hospital.

Inside, the art-filled lobby gleams and the hospital hums with efficiency. There is a lot for patients to like here. The hospital's 47 rooms -- all singles -- are spacious and decorated in calming tones. There are no visiting restrictions, so family and friends come and go as they please. Many spend the night in relative comfort on plush chairs that fold out into beds in each room.

A chef prepares food on par with some hotels (grilled Southwest chicken fajitas with stuffed tomato salad, anyone?), and meals are served room-service style. Patients may eat at nearly any time of day.

Sitting up in his hospital bed, Benny Bowman, a 53-year-old disabled sales clerk from Bakersfield, says his stay has been pleasant and better than his two trips to other local hospitals last year. To Bowman, who has congestive heart failure and arrived here with chest pains, his current doctors and nurses seem more knowledgeable about his heart condition than his previous doctors. He says he feels better. Another plus? "I like having my own shower," he says.

Hospitals like this one, known as specialty or boutique hospitals, represent one of the fastest-growing trends in hospital care today. Such hospitals typically are small, with only a few dozen beds each, and focus on a single medical specialty.

Most focus on three specialties that increasingly are the most profitable for U.S. hospitals: cardiac care, orthopedics and general surgeries. Canada has an entire hospital dedicated to hernia surgeries.

Many have no emergency rooms and don't offer other traditional hospital services, such as neonatal or burn centers. Almost all are partially owned by local doctors, who often direct their patients there for treatment.

They also are controversial. General hospitals, which often are nonprofits, accuse specialty hospitals of cherry-picking their most profitable patients. They warn that without them, especially heart and orthopedic patients, they will be forced to scale back money-losing but socially beneficial services such as emergency room or psychiatric care.

As part of reform legislation passed in November 2003, Congress set an 18th-month moratorium on construction of new specialty hospitals by blocking Medicare funding while it researches the issue. (Those already open are exempted.) Several general hospitals already bar doctors with a financial stake in competing hospitals from their medical staffs. Doctors in South Dakota and Ohio recently sued to regain their medical privileges at those hospitals, but they lost their cases. Several other lawsuits around the country are pending.

According to a recent report by the General Accounting Office, there are more than 90 specialty hospitals in the United States today, about three times the number just a decade ago. Developers have broken ground on two dozen more sites that are excluded from the recent moratorium. California has nine such hospitals, more than any other state.

Hospital experts say several factors are fueling the boutique hospital trend. A recent wave of hospital consolidation has diminished the bargaining clout of many doctors and given them less control over everything from their work schedules to patient care, they say.

By investing in hospitals, doctors are trying to make up income lost under managed care in recent years. (Federal law bars physicians from referring patients to any medical facilities in which they have a financial interest, but there is an exception for hospitals.)

Patients also seem to like the idea of doctors focusing on a specific area, and some believe it produces better results.

There is some evidence that that may be true. A small but growing body of research, including a large study published in the New England Journal of Medicine in 2002, indicates that doctors who perform a high volume of a single surgical procedure have better medical outcomes: fewer complications and fewer patient deaths.

"It's like [18th century Scottish economist] Adam Smith said, specialization can lead to higher quality at lower costs," says Lawrence Casalino, a physician and professor in the department of health studies at the University of Chicago. Casalino believes that the appeal of specialty hospitals has grown in recent years as reports about medical errors at hospitals have drawn the public's attention.

Another reason for the growing trend: the federal Medicare system, which spends more than a $100 billion a year on in-patient hospital care, with its oft-criticized and outdated hospital payment system. By reimbursing more money for some procedures and less for others, it has left room for specialty hospitals to enter the market and make money quickly, experts say.

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