There are two major aims of this commentary on “The Economics of Specialty Hospitals” by Schneider and colleagues (this issue). The first aim is to identify and discuss the policy, market, and organizational context in which physician-owned specialty hospitals have emerged and now exist in the United States. This context is critical for understanding aspects of the economic model and the potential advantages and disadvantages of physician-owned specialty (or limited-service) hospitals relative to general (or full-service) hospitals now and over time. The second aim is to discuss the six specific elements of the model (i.e., consumer demand, procedural operating margins, clinical efficiencies, procedural economies of scale, economies or diseconomies of scope, and competencies and learning). Specifically, to raise some key questions and to point to other ideas and empirical evidence that suggest that in practice, physician-owned specialty hospitals may not have all the advantages that the economic theory described seems to imply.
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