New Evidence of the Prevalence and Scope of Physician Joint Ventures

Abstract

Physician ownership of health care businesses (outside their own practice) to which they refer patients has attracted considerable attention in the medical literature, in the media, and from federal and state policymakers. Despite the concerns raised about these ownership arrangements, known as joint ventures, the prevalence and scope of joint ventures involving physicians is not well documented. This report examines the prevalence and scope of physician joint ventures in Florida based on data collected under a legislative mandate. Our results indicate that physician ownership of health care businesses providing diagnostic testing or other ancillary services is common in Florida. While this conclusion is based on our comprehensive survey of health care businesses in Florida, it is at least indicative that such arrangements are likely to occur elsewhere. We find that at least 40% of Florida physicians involved in direct patient care have an investment interest in a health care business to which they may refer their patients for services; over 91% of the physician owners are concentrated in specialties that may refer patients for services. About 40% of the physician investors have a financial interest in diagnostic imaging centers. The estimates reported here indicate that the proportion of referring physicians involved in direct patient care who participate in joint ventures is much higher than previous estimates suggest.