NCPA - National Center for Policy Analysis


January 16, 2009

Physician-owned hospitals in Texas will infuse $2.3 billion into the state's economy this year, the largest projected economic impact by such hospitals in the nation, according to a study by the Health Economics Consulting Group.  Texas physician hospitals, including specialty surgical centers, also will pay close to $86 million in property, payroll and income taxes this year.

Though the study only included eight states, the researchers say Texas leads the nation in the number of physician-owned hospitals and in the economic impact of those hospitals.  And many of the state's largest nonprofit hospital systems, including those based in Dallas, have partnered with physicians to create joint venture models in which the nonprofit and physicians share ownership:

  • Dallas-based Baylor Health Care System, Methodist Health System and Arlington-based Texas Health Resources (THR) all have partnered with physicians to build and operate hospitals in Collin County and elsewhere.
  • In the Dallas area, there are 16 physician-owned facilities, making up more than 20 percent of the area's hospital count; 10 of those are partnered with either THR or Baylor.
  • The short of it is that physicians and hospitals are embracing the efficiency that these hospitals are creating.

Moreover, Texas laws favor physician ownership more than those in other states:

  • Texas does not have a "certificate of need" (CON) policy, unlike 36 other states.
  • Such policies, which require hospitals to demonstrate a need for their services, are implemented to prevent an overdevelopment of hospitals or surgery centers.
  • Nor, does the state have a CON policy because the Texas is very friendly when it comes to innovation; a CON and the red tape that comes with it would stifle innovation.

But to prevent conflicts of interest, Texas regulations require physicians to disclose their ownership interest in a facility to which they are referring a patient.

Source: Jason Roberson, "Texas leads in economic impact of doctor-owned hospitals," Dallas Morning News, January 14, 2009.


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