The passage of health care reform has brought physician-owned hospitals into question. Currently, there are about 260 physician-owned hospitals in the country employing almost 75,000 people. They range from specialty hospitals to general facilities to rehabilitation centers.
But the addition of more of these hospitals may come to a halt. New facilities not grandfathered in before the Congress-imposed Dec. 31 deadline won’t be allowed to operate. We talked to two experts on either side of the debate.
For physician-owned hospitals
Molly Sandvig, executive director of the Physician Hospitals of America, says doctors are able to self-govern their practices and treat patients the way they want to when it comes to physician-owned hospitals.
"We want to offer an option for patients that are of higher quality and lower cost," says Molly Sandvig, executive director of the Physician Hospitals of America.
“These have come about because doctors have discovered anything done in a hospital is done better by a physician,” Sandvig says. “[Doctors] don’t think they have the control they need in health care.”
Sandvig points to a 2009 Consumer Reports study that ranks physician-owned hospitals superior to community hospitals in 19 states. Currently, 20 states have no such hospitals.
She says those opposed to physician-owned hospitals are worried about increased competition. “There shouldn’t be steps taken by the government to limit what a patient should choose,” Sandvig says. “We want to offer an option for patients that are of higher quality and lower cost.”
That quality care, Sandvig believes, isn’t coming at the expense of cutting emergency care. “That’s an old argument,” she says. “Most of our hospitals are leaning toward general care. And they certainly aren’t cherry-picking patients. Physicians don’t look at insurance plans before taking patients. Patients choose these hospitals.”
Sandvig says it’s not a conflict of interest to have doctors running hospitals, and adds that physician-owned hospitals may be making more money, but that’s due to greater efficiency.
“Our private pay contracts with patients are lower,” she says. “And we certainly aren’t making more on Medicare and Medicaid. Even if physician-owned hospitals are making bigger profits, I don’t think that’s a problem.”
Against physician-owned hospitals
Cindy Morrison, executive director of the Coalition of Full-Service Community Hospitals, says the quality of physician-owned hospitals isn’t any better than other hospitals. She says this is partly due to physician-owned facilities relying on recruiting staff from community hospitals to fill its labor needs.
"No matter the direction of the discussion, the bottom line is these hospitals are motivated by profit," says Cindy Morrison, executive director of the Coalition of Full-Service Community Hospitals.
“No matter the direction of the discussion, the bottom line is these hospitals are motivated by profit,” Morrison says. “[Physician-owned hospitals] cherry-pick the most profitable patients and usually offer only the most profitable services for health solutions, even if unnecessary.”
As a result, Morrison says full-service hospitals are damaged financially and are required to provide emergency and trauma care at their locations. At a physician-owned facility, she adds, they often avoid offering these services, which are often costly. But patients in need can’t avoid emergency care, she says, even if they lack the means to pay for it.
Morrison says physician-owned hospitals earn much higher profits than other facilities and adds it’s a conflict of interest that physician owners get paid three times for every patient treated. They receive a fee for treatment, a facility fee for hospital care and an investment increase by contributing more customers to the bottom line.
That’s why Morrison says Congress has enacted legislation to increase transparency, limit growth in existing facilities, and stop the “uncontrollable addition” of more physician-owned hospitals.
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