Physician Ownership of Medical Equipment Highlights Self-Referral Issue

Media Advisory
Dec. 22, 2010

FURTHER INFORMATION, CONTACT:
Alwyn Cassil (202) 264-3484 or acassil@hschange.org

WASHINGTON , DC—Amid cost and quality concerns about overuse of advanced imaging on patients, one in six physicians in 2008 reported their practice owned or leased advanced imaging equipment, according to a national study released today by the Center for Studying Health System Change (HSC).

Physician practice ownership or leasing of a broad array of medical equipment, ranging from equipment for laboratory testing to invasive procedures, is quite common, according to the study coauthored by HSC Senior Researcher James Reschovsky, Ph.D.; HSC Public Affairs Director Alwyn Cassil; and former HSC Senior Researcher Hoangmai H. Pham, M.D., M.P.H. The study was funded by the Robert Wood Johnson Foundation (RWJF).

Policy makers have long been concerned that physicians with ownership or other financial interests in medical facilities and equipment would make more referrals than medically necessary. Since the mid-1990s, the federal physician self-referral law, commonly known as the Stark Act, has prohibited physicians from self-referring Medicare and Medicaid patients to certain health services, ranging from clinical laboratory services to advanced imaging services. However, there are numerous exceptions to the self-referral prohibitions, most notably if the service is provided within the physician’s office or practice.

While previous research on physician self-referral has focused on particular services, such as advanced imaging, there has been little national information about how pervasive physician ownership or leasing of medical equipment is more broadly. HSC’s nationally representative 2008 Health Tracking Physician Survey, funded by RWJF, asked physicians whether their main practice owned or leased equipment used for:

• laboratory testing, including routine blood work;
• X-rays;
• other diagnostic imaging, such as CT or MRI scans;
• non-invasive testing besides electrocardiograms, or EKGs (e.g. echocardiograms, treadmill, nuclear testing, sleep testing); and
• invasive procedures, such as endoscopy or cardiac catheterization.

Of 2,750 physicians in community-based, physician-owned practices, 25.2 percent reported their practice owned/leased equipment for laboratory services, 22.7 percent for X-rays, 17.4 percent for advanced imaging, 28.9 percent for non-invasive procedures and 11.4 percent for invasive procedures. Overall, almost one in seven physicians (13.2%) reported that their practice owned or leased three or more types of equipment. The study findings are detailed in a new HSC Data Bulletin—Physician Ownership of Medical Equipment—available online at www.hschange.org/CONTENT/1172/.

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The Center for Studying Health System Change is a nonpartisan policy research organization committed to providing objective and timely research on the nation’s changing health system to help inform policy makers and contribute to better health care policy. HSC, based in Washington, D.C., is funded in part by the Robert Wood Johnson Foundation and is affiliated with Mathematica Policy Research.