Hospital Privileges, and Compensation Arrangements: A Comparison of System Hospitals Medical Staff Size

Since 1975, multihospital systems have grown at a 3 to 4 percent annual rate (Ermann and Gabel, 1984). Many observers see fundamental changes in the practice of medicine as a result of this trend (Starr, 1982), particularly in regard to the investor-owned (IO) systems (Relman, 1980). Among the concerns are (1) potential conflict of interest between the profit motive and patient needs, (2) the ability of investor-owned system hospitals to deliver care in terms of the number and types of physicians that affiliate with such hospitals, (3) the degree to which IO system hospitals review privileges, and (4) the nature of the financial relationships between physicians and IO system hospitals. The first issue is beyond the range of this paper. The remaining three are addressed in descriptive fashion by comparing IO system hospitals with freestanding hospitals and hospitals in other types of systems. The analysis uses available data from the American Hospital Association (AHA). The following section describes the three data sets used. This is followed by findings pertaining to the number and types of physicians, privilege criteria and review, and compensation arrangements. A concluding section discusses the implications of the findings and makes suggestions for further study.

Medical Staff Size, Hospital Privileges, and Compensation Arrangements: A Comparison of System Hospitals