Health Law Bans New Doctor-Owned Hospitals, Blocks Expansion of Existing Ones
By Fred Lucas, Staff Writer
The new health care overhaul law, which promised increased access and efficiency in health care, will prevent doctor-owned hospitals from adding more rooms and more beds, says a group that advocates physician involvement in every aspect of health care delivery.
Physician-owned hospitals are advertised as less bureaucratic and more focused on doctor-patient decision making. However, larger corporate hospitals say doctor-owned facilities discriminate in favor of high-income patients and refer business to themselves.
The new health care rules single out such hospitals, making new physician-owned projects ineligible to receive payments for Medicare and Medicaid patients.
Existing doctor-owned hospitals will be grandfathered in to get government funds for patients but must seek permission from the Department of Health and Human Services to expand.
To get the department’s permission, a doctor-owned hospital must be in a county where population growth is 150 percent of the population growth of the state in the last five years; inpatient admissions must be equal to all hospitals located in the county; the bed-occupancy rate must not be greater than the state average, and the hospital must be located in a state where hospital bed capacity is less than the national average.
The rules fall under Title VI, Section 6001 of the Patient Protection and Affordable Care Act. The provision is titled “Physician Ownership and Other Transparency – Limitations on Medicare Exceptions to the Prohibition on Certain Physician Referral for Hospitals.”
More than 60 doctor-owned hospitals across the country that were in the development stage will be canceled, said Molly Sandvig, executive director of Physician Hospitals of America (PHA).
“That’s a lot of access to communities that will be denied,” Sandvig told CNSNews.com. “The existing hospitals are greatly affected. They can’t grow. They can’t add beds. They can’t add rooms. Basically, it stifles their ability to change and meet market needs. This is really an unfortunate thing as well, because we are talking about some of the best hospitals in the country.”
The organization says physician-owned hospitals have higher patient satisfaction, greater control over medical decisions for patients and doctor, better quality care and lower costs. Further, physician-owned hospitals have an average 4-1 patient-to-nurse ratio, compared to the national average of 8-1 for general hospitals.
Further, these 260 doctor-owned hospitals in 38 states provide 55,000 jobs, $2.4 billion in payroll and pay $509 million in federal taxes, according to the PHA.
In one ironic aspect, President Barack Obama’s two largest legislative achievements clashed. The Hammond Community Hospital in North Hammond, Ind., got $7 million in bond money from the federal stimulus act in 2009. It will likely be scrapped because of the new rules on physician-owned hospitals, according to the Post-Tribune newspaper in Merrillville, Ind.
Doctor-owned hospitals have long been a target of the American Hospital Association, which represents corporate-owned hospitals as well as non-profit hospitals.
An AHA study from 2008 says that physician-owned hospitals “lessen patient access to emergency and trauma care;” “damage the financial health of full-service hospitals and lead to cutbacks in service;” “are not more efficient than full service community hospitals;” “use physician-owners to steer patients;” “cherry pick the most profitable patients;” and “provide limited or no emergency services.”
One AHA fact sheet asserts that physician-owned orthopedic and surgical hospitals costs are 20-30 percent higher than average hospitals. Further, these hospitals lead to higher profits just for doctors, the AHA asserts.
“We don’t cherry pick patients, period, end of story. We take patients based on their need for care, not on their ability to pay,” Sandvig said. “It [the health care reform] puts control outside the hand of physicians and patients and into bureaucrats’ hands really.
The Association of American Physicians and Surgeons (AAPS) is one of many organizations suing to have the law declared unconstitutional on the grounds that the federal government cannot compel someone to buy a product.
While the provision on physician hospitals is not part of the lawsuit, it will affect it, said Dr. Jane Orient, AAPS executive director.
“If the law is declared unconstitutional, then the prohibition is part of the bill,” Orient told CNSNews.com. “There are vested interests in getting rid of physician-owned hospitals because they do a better job and are more affordable.”
The provision in the legislation and efforts opposing these hospitals can be simply explained from Sandvig’s view.
“It’s anti-competitive. I think it’s pretty clear,” Sandvig said. “We’re a model that makes sense that’s affecting innovation. We’re trying to do something better than it has been done. Anytime you do that, there’s going to be a clash between the existing and the new. Unfortunately, it’s a real David and Goliath battle.”
- Kim Dotcom: Julian Assange Has New Info Forthcoming About Hillary Clinton
- 'Fake' Reform: Little to Celebrate as USA Freedom Act Passes House
- Shock Poll: Americans Hate Jeb Bush More Than Hillary
- Russell Brand Trademarks 'r3VOLution' Logo Made Famous by Ron Paul Campaign
- After Legalizing Medical Marijuana, Puerto Rico Bans Smoking It
- DOJ Tells Judges They Don't Get A Say In Whether Information Is Classified
- D.A.R.E. Gets Duped By Anti-Pot Satire
- Homeland Security Chief Admits He Doesn't Understand 4th Amendment
FAIR USE NOTICE
This site contains copyrighted material the use of which in some cases has not been specifically authorized by the copyright owner. Such material is made available for the purposes of news reporting, education, research, comment, and criticism, which constitutes a 'fair use' of such copyrighted material in accordance with Title 17 U.S.C. Section 107. If you wish to use copyrighted material from this site for purposes of your own that go beyond 'fair use', you must obtain permission from the copyright owner. It is our policy to respond to notices of alleged infringement that comply with the DMCA and other applicable intellectual property laws. It is our policy to remove material from public view that we believe in good faith to be copyrighted material that has been illegally copied and distributed by any of our members or users.