

Many physicians confronting declining reimbursement from insurers have invested in ambulatory surgery centers, where they perform outpatient surgical and diagnostic procedures.

An ownership stake entitles physicians to a share of the facility's profits from self-referrals. This arrangement can create a potential conflict of interest between physicians' financial incentives and patients' clinical needs. Our analysis of Florida data for five common procedures revealed a significant association between physician-ownership and higher surgical volume. Possible remedies include revising federal law to require disclosure of investment arrangements; reducing facility payments to dilute ownership incentives; and reforms (such as accountable care organizations) that discourage an excessive rate of procedures.