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Financial Problems Predicted
Staff Reporters
According to the Wall Street Journal, January 22, 2009, a bill making its way through Congress to provide more low-income children with health-insurance coverage might mean financial trouble for scores of physician owned hospitals.
Emergence and Growth
The very existence of doctor-owned hospitals is controversial. But, their numbers have tripled to about 200 since 1990.
The Supporters
Supporters say these hospitals, which usually focus on several lucrative services, such as cardiac care or orthopedics, are highly efficient, saving expenses for both patients and insurance programs, including Medicare.
More: www.HealthcareFinancials.com
The Critics
Critics say physicians who refer patients to hospitals with an ownership stake drive up costs, because they order more tests or perform unnecessary surgery. They argue that such hospitals also cherry pick healthy patients hurting surrounding non-profits hospitals.
Assessment
According to Pete Stark, chairman of the House Ways and Means health subcommittee, the proposed legislation would prohibit “the unethical kickbacks that physicians receive from ownership hospitals, most of which are of questionable safety and quality.”
Conclusion
And so, your thoughts and comments on this Medical Executive-Post are appreciated. Do you agree, or disagree with the thesis; why or why not? Does this mean that not-for-profit hospitals, for-profit entities, or those hospitals with training programs don’t order un-needed tests? Are these hospitals and physician-investors, “crazy” or colorful and sane?
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Filed under: "Doctors Only", Alternative Investments, Career Development, Health Economics, Health Law & Policy, Managed Care, Quality Initiatives, Research & Development | Tagged: david marcinko, hope hetico, Peter Stark, physician owned hospitals, Robert Cimasi |
The Leading Business Education Network for Doctors, Financial Advisors and Health Industry Consultants 
Hello,
Ths was a very informative article. It was well put together and provided for a great read. I’m going to forward this blog to my hospital work study-group so that they can also read and review it all.
You’ve got a new subscriber to this free blog, and your print-journal, too!
-Dr. Donald Mega
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Hospital Expenditures Unrelated to Bed Supply,
According to Robert J. Cimasi; MHA, CMP™, of Health Capital Consultants LLC, in St. Louis, MO, there is a widespread perception in healthcare that “Where there’s a bed, there’s a patient day”, a cornerstone rallying cry for those who seek to restrict competition through legislation and regulatory control.
http://www.HealthcareFinancials.com
In fact, I was involved in a similar situation competitive situation back in the day [1986-1998] when involved in a private physician-owned ambulatory surgery center [ASC] that required a CON for licensure. And; at the time, similar though less vehement allegations were made.
Cited in the establishment of many CON laws restricting the construction and expansion of healthcare facilities was the “Roemer Effect.” In their 1959 study, Roemer and Shain argued that hospital beds can be intentionally filled by providers who induce ill-informed patients into hospital stays.
However, an example of the ineffectuality of this type of limited control is early attempts to limit costs by controlling the number of hospital beds. In the 1970’s, for example, Certificates of Need [CON] had little effect in controlling hospital costs even when bed supply was controlled because hospitals often simply increased their expenditures per patient.
And, so, an informed update on this topic in modernity would be appreciated for our readers and subscribers.
-Dr. David Edward Marcinko; MBA
[Editor-in-Chief]
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Did you know that Baylor Medical Center, in Texas, actually supports physicians in owning hospitals — and takes a stake in those facilities? Thanks to Baylor’s support, 22 doctor-owned hospitals have blossomed.
For example, of a total of 226 physician-owned facilities in the entire country, another 23 are under development there.
http://www.kaiserhealthnews.org/Daily-Reports/2009/September/21/Doc-Owned-Hospitals.aspx
No wonder Kaiser is upset!
Jerome
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Statutory Elimination of Physician-Owned Hospital Exceptions
On July 1, 2011, CMS released the proposed rule fully implementing provisions in the ACA that essentially eliminate the whole hospital and rural provider exceptions to Stark Law.
The changes surrounding the Stark Law in the ACA will have a significant effect on the growth, competition, and continued existence of physician-owned hospitals.
Source: http://www.healthcapital.com/hcc/newsletter/07_11/statutory.pdf
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