Investigation of California Physician-Owned Hospitals Profitability and Payor Mix Compared to Other Hospital Ownership Types: 2009 to 2015
type: CreativeWork
description: Scrutiny of physician-owned hospitals (POHs) intensified beginning in 1989 and continued until passage of the Patient Protection and Affordable Care Act of 2010 (ACA). Government studies attempted to better understand the allegations that POHs were exploiting the whole hospital exception in the Stark laws by primarily accepting the healthiest patients with the best insurance (cream skimming or cherry picking) while avoiding sicker, less well insured patients. The ACA prevented new POHs from opening and existing ones from expanding. With California v. Texas being decided by the US Supreme Court in 2021, the ACA, including the provisions regarding POHs, hangs in the balance. What has happened to POHs in California since passage of the ACA? How do POHs compare to other hospitals in California? Employing quantitative methods with data from California’s Office of Statewide Health Planning and Development, POHs were compared to two other groups of hospitals: investor- owned, and non-profit, using the metrics of net income margin percentage and low-reimbursing insurance payor mix, for the time period 2009-2015. The results indicate there are no statistically significant differences between POHs and other hospitals ownership types when considering net income margin percentage. There are statistically significant results between POHs and other hospital ownership groups in low- reimbursing insurance payor mix. The conclusions from this study include a call to action for policymakers to consider the value of POH restrictions regardless of the outcome in the US Supreme Court case California v. Texas.
abstract: Scrutiny of physician-owned hospitals (POHs) intensified beginning in 1989 and continued until passage of the Patient Protection and Affordable Care Act of 2010 (ACA). Government studies attempted to better understand the allegations that POHs were exploiting the whole hospital exception in the Stark laws by primarily accepting the healthiest patients with the best insurance (cream skimming or cherry picking) while avoiding sicker, less well insured patients. The ACA prevented new POHs from opening and existing ones from expanding. With California v. Texas being decided by the US Supreme Court in 2021, the ACA, including the provisions regarding POHs, hangs in the balance. What has happened to POHs in California since passage of the ACA? How do POHs compare to other hospitals in California? Employing quantitative methods with data from California’s Office of Statewide Health Planning and Development, POHs were compared to two other groups of hospitals: investor- owned, and non-profit, using the metrics of net income margin percentage and low-reimbursing insurance payor mix, for the time period 2009-2015. The results indicate there are no statistically significant differences between POHs and other hospitals ownership types when considering net income margin percentage. There are statistically significant results between POHs and other hospital ownership groups in low- reimbursing insurance payor mix. The conclusions from this study include a call to action for policymakers to consider the value of POH restrictions regardless of the outcome in the US Supreme Court case California v. Texas.
author: Pinder, James
keywords: affordable care act, health services, hospital, physician owned, specialty, supreme court
date published: 2020-01-01T08:00:00Z
date modified: 2026-07-24T01:39:50Z
provider: Claremont Graduate University
publisher: Networked Digital Library of Theses and Dissertations
type: WebPage
source organization: Claremont Graduate University