Caveat emptor: joint ventures with specialty hospitals.

A specialty hospital joint venture between a health system and physician investors may implicate anti-kickback and tax laws when physicians self-refer patients to the hospital, raising the issue of conflict of interest. Physician self-referral can motivate behavior, such as cherry-picking patients and increased utilization, which in turn leads to windfall profits for physician owners and weakens classic community hospitals. Hopitals can best serve the interests of patients and improve performance by building enduring partnerships with physicians.