Another Attack on Innovative Care

by Grace-Marie Turner

An article in the Wall Street Journal explains how physician-owners of hospitals — among the highest-quality, most-efficient hospitals in the country — are “descend[ing] on Congress” to seek relief from strict limits on expansion of their facilities imposed by the Affordable Care Act.

Congress, the author writes, “wanted to clamp down on a sector that some policy experts contend is prone to perform unnecessary procedures at high prices, driving up overall health spending,” though she provides no specific explanation of this claim.

Nine of the ten top-performing U.S. hospitals listed last December by the government’s Centers for Medicare & Medicaid Services were physician-owned hospitals. Yet the ACA forbids these facilities from expanding and bans new ones from opening.

The ban on this competition is supported by the American Hospital Association and the Federation of American Hospitals, which lobbied hard for its inclusion in the health law.

Big, monolithic community hospitals have been trying for years to quash these upstart physician-owned hospitals that provide better, more-efficient care with higher-rated outcomes. The main reasons: The big hospitals don’t like the competition from the efficient, quality innovators. Unfortunately, they have succeeded in using the power of big government to try to thwart them.

John W. Dietz Jr. with Indiana Orthopaedic Hospital says holding back physician-owned hospitals is unwarranted, given the massive number of people expected to gain health insurance in the years after the ACA is fully enacted in 2014. The hospitals often specialize in orthopedic, cardiac, and other care that allows them to fine-tune their expertise.

The WSJ article portrays the hospitals as “luxury facilities” that are trying to “wiggle around the federal health-care law’s growth caps,” but at the very end of her article, Mundy admits that “new Medicare measurements showing that doctor-owned hospitals represent about half of the top 100 facilities whose performance will merit bonus Medicare reimbursements because of their cost efficiency and patient satisfaction.”

“We are getting more work done for less cost,” Dietz says. Physician-owned facilities, he explains, can be more responsive because there is less bureaucracy. Doctors own them and are able to actually practice medicine rather than spend an inordinate amount of their time on cumbersome paperwork.

The big hospital organizations have long asserted that physician-owned hospitals purposely serve healthier, more profitable patients, leaving community hospitals to treat sicker, more expensive patients. Paul Kerens, president of Physician Hospitals of America, denies this claim, contending that “physician owners started getting into the hospital business to provide better patient care and provide efficiencies of care.”

A physician-owned hospital in McAllen, Texas, has offered to expand so it can treat more under-served Medicaid population. So far, no deal. The big hospitals don’t want the competition, even if it means having Medicaid patients stand in line at their hospitals for hours, days, or even weeks to get the surgeries and other treatments they need.

Members of the Physicians Hospitals of America are in Washington this week to talk with Congress and administration officials about their results and the need to expand to serve patients. The existing facilities are extending their hours and doing surgeries on weekends to serve growing patient demand, and they’re asking Congress to loosen the limits on hospital expansion and allow facilities that were partially completed when the health law passed to open.

Higher-quality more-efficient care, greater patient satisfaction, and doctors and nurses ready and willing to take care of patients? Certainly we can’t have any of that in the new world of Obamacare!