Specialty-Service Lines: Salvos in the New Medical Arms Race

July 25, 2006
Health Affairs, Web exclusive
Robert A. Berenson, Thomas Bodenheimer, Hoangmai H. Pham

Hospitals and physicians are developing and marketing discrete and profitable specialty-service lines. Although closely affiliated specialist physicians are central to hospitals’ service-line products, other physicians compete directly with hospitals via physician- owned specialty facilities. Specialty-service lines may be provided in a variety of settings, both inside and outside traditional hospital walls. Thus far, the escalating battle between hospitals and physicians for control over specialty services has not affected hospital profitability. However, as the scope of care that can be safely performed in the outpatient arena expands, physician competition for control over specialty services may threaten hospitals’ financial health.

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