Congress Takes-On Physician-Owned Hosptials In SCHIP Bill
Congress Takes-On Physician-Owned Hosptials In SCHIP Bill
A little-noticed provision in the House’s version of the SCHIP expansion bill prohibits the construction of physician-owned specialty hospitals, or “focused factories” that specialize in lucrative cardiac, orthopedic, or surgical services.
The restrictions would prohibit new physician-owned hospitals from opening and limit the expansion of existing hospitals. “In order to expand, the facilities would be required to receive approval from the HHS secretary,” Kaiser reports.
Without missing a beat, Physician Hospitals of America, the trade group for physician-owned specialty hospitals, is already lobbying the Senate to pass a clean SCHIP bill:
It is completely counterintuitive that at a time when our country is experiencing an economic downturn, high rates of unemployment and inadequate access to health care, Congress would consider killing an industry that provides over 55,000 jobs nationally and that provides patients access to the best quality health care available in America.
Proponents argue that the small-scale operations — the average orthopedic specialty hospital has 16 beds and the average surgical specialty hospital has 14 — allow doctors to focus on patient-centered care that not only improves clinical outcomes “but also satisfaction among their patients and physicians.” And while a recent study found no difference in the quality of care delivered in a cardiac physician-owned specialty hospital, physician owned hospitals do offer patients a truly luxurious experience. Some hospitals are equipped with dim mood lighting, gourmet menus, wireless capabilities, and other resort-like vacation perks.
So why ban these islands of opulence? Well, critics maintain that physician-owned operations have an unfair competitive advantage with regular community hospitals. That is, by providing a narrow array of profitable services without having to maintain an emergency department or offer services to anyone who walks through the doors, specialty hospitals skim off the most profitable patients and undermine “community hospitals’ ability to subsidize the less profitable services they furnish to their communities.”
But if physician-owned hospitals seem to have a competitive advantage over general hospitals, their effect on community hospitals (and the community) is still unclear. A 2005 MedPac report concluded that overall, physician-owned hospitals had “little impact on community-hospital profitability through 2002.” Yet the report also expressed “concerns that physician-owned specialty hospitals could have incentives to disregard their role in effectively serving Medicare and Medicaid beneficiaries in their communities or to compromise clinical judgment in the pursuit of hospital financial goals.”
Similarly, a 2008 report released by the Office of Inspector General for HHS concluded that “most physician-owned specialty hospitals are poorly equipped to handle medical emergencies.”
“It’s unbelievable that a facility that calls itself a hospital would, at times, not even have a doctor on call or a nurse on duty. It is unacceptable that these facilities are not designed or equipped to handle emergencies,” Sen. Max Baucus (D-MT), a critic of physician-owned hospitals, said.
2 Responses to “Congress Takes-On Physician-Owned Hosptials In SCHIP Bill”
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Stark’s bill is cost-negative because it shifts costs away from emergency rooms and in to primary care, without reducing average emergency room wait times. As a Medicare bill, it allows easier modification of the Graduate Medical Education program and Medicare and Medicaid reimbursements in order to control physician supply and demand.
Daschle’s plan on page 154 of his book is to put everyone on the Federal Health Benefits Plan. I believe that this is also budget negative, but I don’t recall the last time I saw it scored. Does anyone know if the CBO has already looked at it?
January 17th, 2009 at 3:48 amThe Wonkroom’s article above repeats many of the old, disproved allegations made against physician hospitals over the years. Numerous public and private studies, some cited in the Wonkroom article, have disproved these charges.
The House is preparing to vote on the final version of the State Children’s Health Insurance Program (SCHIP) legislation. The bill is pro-child but the House language is anti-physician. The House version of SCHIP threatens quality healthcare delivered by physician hospitals, which has nothing to do with helping children get healthcare.
The Wonkroom focus on amenities, “… Some hospitals are equipped with dim mood lighting, gourmet menus, wireless capabilities, and other resort-like vacation perks …” misses the point. The studies the Wonkroom alludes to show that physician hospitals have fewer complications after procedures, lower infection rates, lower patient-to-nurse ratios and deliver high quality care with 98 percent-plus patient satisfaction ratings.
“Islands of opulence?” How is it that a private room that limits exposure to others and thus reduces infection, clean sheets, good meals and amenities that make patients and their families comfortable are bad things? Apparently patients like them, given the satisfaction ratings.
The Indiana Orthopaedic Hospital is not a five-star hotel, though we have received five-star ratings from HealthGrades for our orthopaedic specialties and we’re rated in the top five percent of joint and spine facilities in the country.
As noted in the article, indeed the House version of SCHIP puts at risk nearly 200 physician-owned hospitals across the country. This is an economic issue. In a teetering economy, do we want to restrict an industry that has created 55,000 nursing and staff jobs and employs 28,000 physicians?
Should we restrict an industry that does provide charity care and pays taxes? Physician hospitals treat Medicare, Medicaid and indigent patients, and physician hospitals pay taxes–more than $500 million in federal, state and local taxes according to the most recent numbers available.
Restricting physician hospitals would blunt innovation, cost jobs and economic benefit to communities around the country; and deny high quality healthcare to Americans.
February 2nd, 2009 at 3:19 pm