NCPA - National Center for Policy Analysis

Boutique Hospitals

October 22, 2003

For years, doctors have become increasingly specialized. Now hospitals are doing the same. Today, there are about 100 stand-alone specialty hospitals that focus exclusively on areas such as cardiology or orthopedics, and at least 20 more are under development. Boutique hospitals, as they're sometimes called, often have newer equipment and more amenities than traditional hospitals, but the jury is still out on whether they provide better quality of care.

According to a report by the General Accounting Office:

  • While children's and rehabilitation hospitals have been around for decades, what distinguishes boutique hospitals is that 70 percent are owned partly or entirely by doctors.
  • They often concentrate on the most profitable areas of medicine.
  • The report looked at the four main types -- cardiac, orthopedic, surgical and women's -- and found their numbers have tripled since 1990.
  • Community hospitals worry that the upstarts are luring away their most lucrative patients (who subsidize indigent care and other money-losing services), leaving behind those who are sicker and more expensive to treat.
  • The GAO report, requested by Congress in response to such concerns, concluded that patients in specialty hospitals tend to be less sick than those in general hospitals.

MedCath, which owns and operates 10 cardiac hospitals, funded a study showing just the opposite. Its patients were found not only to be more severely ill than those in general hospitals but also to have shorter stays and lower in-hospital death rates. Some specialty hospitals also claim their infection rates are lower and that they provide more comfortable and convenient care, often with hotel-like amenities. Plus, they say their costs are frequently less.

Source: Robert J. Davis, "Hospitals That Specialize," Wall Street Journal, October 14, 2003.

For text (WSJ subscription required),,SB106608078884350100,00.html


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