Specialty vs. Community Hospitals: What Role for the Law?

“Specialty vs. Community Hospitals: What Role for the Law?” (2005) Health Affairs W5-361 – W5-372 (with N.K. Choudhry & T.A. Brennan).

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U.S. health care has long featured a struggle between regulation and markets as vehicles of reform, and the community hospital is at the center of this struggle. The key to its financial viability is cross-subsidization, whereby revenues from insured patients subsidize the care of the uninsured and the underinsured, and profits from well-compensated services support those operating at a loss. Cross-subsidization has been challenged by efforts to move highly compensated services and well-insured patients to ambulatory surgical centers and specialty hospitals. We review the ongoing battle through a legal lens and offer conjectures about the outcome. Refined certificate-of-need regulation may be the preferable policy choice.