Hospitals run by doctors can save more than $1 billion yearly.

A survey looking at 2019 Medicare data discovered that total payments for some of the most expensive diagnostic categories were between 8% and 15% lower in physician-owned hospitals than traditional institutions.

These figures might translate to $1.1 billion in savings for 20 diagnosis groups in conventional hospital settings if reimbursements had been at the same rate as physician-owned institutions. Robert Aseltine Jr., PhD, an associate professor at Loyola University Chicago, and Gregory Matthews, PhD, a professor at UConn Health in Farmington, Conn., were the report's principal authors.

The analysis indicates that substantial savings to the Medicare program could be achieved if traditional hospitals were able to provide care at the same cost as POHs in their area, the report authors concluded.

According to Michael Darrouzet, executive vice president and CEO of the Texas Medical Association and vice president and board director of the Physicians Advocacy Institute, Congress now has more information to support the expansion of physician-owned hospitals.

"Hospitals owned by physicians promise significant cost savings when it comes to Medicare patients' most expensive medical conditions," he said in a news release on October 19. "Better quality and notable cost savings to patients and taxpayers is a clear signal that physician-owned hospitals is a policy worthy of adoption."

Such physician-owned systems continue to be mainly opposed by hospital advocacy groups like the American Hospital Association, who claim they potentially raise patient risk and that they cherry-pick patients.

Data from 186 physician-owned hospitals were included in the analysis, which concluded that populations treated in conventional settings and institutions controlled by physicians were not statistically different.