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Health Econ Policy Law. 2007 Oct;2(Pt 4):409-18. doi: 10.1017/S1744133107004227.

Specialization and physician-ownership in the US hospital industry: beyond the moratorium.

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  • 1VA Center for Health Quality, Outcomes and Economic Research, Bedford, MA 01742, USA.


A moratorium in the US on referrals of Medicare and Medicaid patients to new cardiac, orthopedic, or surgical specialty hospitals by physician-investors was recently lifted, yet the considerable controversy stirred by this growing hospital organizational form continues. This paper calls attention to the peculiar trade-offs introduced by entry of these specialty hospitals, and highlights distinctions among their different types. New policy approaches should be open to the notion that all physician-owned specialty hospitals need not necessarily be regulated in the same way. And caution will be required not to compromise the capacity of community general hospitals to service more complex patients and to maintain the social safety net.

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