One target of the newly enacted health reform of the federal government will be "physician-owned hospitals". In an article
REPORTED HERE amednews.com notes that "A provision in the health reform law enacted in March placed major
limits on physician ownership of hospitals.
New doctor-owned facilities that are not certified as Medicare
participants by Dec. 31, 2010, no longer will be allowed into the
program. Existing physician-owned facilities face immediate restrictions
on expansion. Physician investors say those rules are so strict that
virtually none of their hospitals will be able to grow." The article notes that the physician owners of Texas Spine & Joint Hospital in the eastern Texas community surrounding Tyler has canceled a major $37 million expansion that would have created 540 new jobs.
A $250 million project in Loma Linda, CA has also been shelved because it will not receive the required Medicare certification in time. They started their hospital project four years ago.
"Physician Hospitals of America -- an organization based in Sioux Falls,
S.D.-- said the reform law will 'virtually destroy' more than 60
hospitals that were under development and leaves few prospects for the
future of the industry. 'Patients across the country should be outraged
that, at a time when the government is supposedly attempting to increase
access to care, it has chosen to stop the growth of many of the best
hospitals in the country,' said Molly Sandvig, PHA's executive director."
"The hospitals already are fighting back. PHA and Texas Spine & Joint
announced June 3 that they had filed suit jointly in U.S. Federal Court
for the Eastern District of Texas, challenging the constitutionality of
the reform law's physician-owned hospital section. The lawsuit includes
a motion for a preliminary injunction that would allow the hospital to
proceed with its expansion plans."
"For community hospitals, limiting expansion of physician-owned
facilities was a vital piece of the health reform package," the article notes. "Organizations such as the American Hospital Assn. have argued that
physician-owned facilities operate under inherent conflicts of
interests, cherry-pick more profitable patients and place strains on
community hospitals, forcing reductions in key services."
"Legislative attempts to curb physician ownership often target so-called
specialty hospitals -- typically cardiac, orthopedic or surgical
facilities that focus on limited services. But the health reform statute
stops dead in its tracks any facility that has physician ownership,
even if it's less than 1% doctor-owned," the report notes.
Sierra CEO Jim Sergeant said...."I don't know of any other industry that is regulated as heavily as
we are," he said. "And then to be prohibited from trying to compete ...
it just dumbfounds me that Congress would allow this to occur,
especially when they're looking for jobs."
"What's ironic...is that doctor-owned
facilities eventually may be forced to cherry-pick more profitable
patients if they can't expand capacity. 'I call it a self-fulfilling
prophecy. What you're saying we do, you're actually going to force us to
do.'"
"The health reform law effectively will ban new physician-owned
hospitals from starting up and existing ones from expanding. Here's
where the 265 facilities stand:
- Employees -- more than 75,000 full- and part-time workers
- Average payroll -- $13 million
- Average staffed bed size -- 233 (general acute care), 65 (heart),
40 (multispecialty surgical), 34 (rehabilitation), 30 (long-term acute
care), 24 (orthopedic)"
