The future of about 300 physician-owned hospitals nationwide is in jeopardy now that President Obama has signed a healthcare reform bill that would prohibit existing physician-owned hospitals from expanding and ban new ones from contracting with Medicare.
The bill grandfathers in any new and existing physician-owned hospitals that earn Medicare certification by Aug. 1, 2010 — a deadline that more than 60 hospitals currently under development wouldn't be able to meet, according to advocacy group Physician Hospitals of America. The deadline would be extended to Dec. 31, 2010, if the Senate approves a reconciliation bill.
In an e-mail to its members, PHA says it's not clear whether facilities that fail to meet the deadline will be able to receive Medicare certification, but "what is clear is that physician owners will not be able to bring Medicare/Medicaid patients to those hospitals."
Even hospitals that are grandfathered into the legislation will face existential threats, says PHA. That's because the bill prohibits existing facilities from adding beds, ORs or procedure rooms unless they can meet 4 "allowable growth criteria": They must be located in a county where the population grew at a rate that's at least 150% of the state's population increase over the past 5 years; have a Medicaid inpatient admission percentage equal to or greater than the average of all hospitals in the county; be located in a state with a below-national-average bed capacity; and have a bed occupancy rate greater than the state average.
PHA Executive Director Molly Sandvig says her organization is aware of no physician-owned hospital that would be able to meet each of these 4 criteria.
Unlike many other provisions in the healthcare bill that won't have an impact for years to come, the restrictions on physician-owned hospitals would go into effect immediately. Ms. Sandvig says PHA will pursue all options available to challenge the bill.
"You have to allow for existing hospitals to grow in one way, shape or form," Ms. Sandvig told Outpatient Surgery back in January, when her organization was lobbying Congress to strip the restrictions from the bill or at least lessen their impact on developing and existing facilities. "We can't be forced to be a stagnant industry."
If the restrictions on physician ownership remain in the bill, Don Burman, member of PHA's board of directors and CEO of Heartland Surgical Specialty Hospital in Overland, Kan., says physician-owned hospitals would have to leave the Medicare system in order to grow and survive in the marketplace. By excluding Medicare beneficiaries from the high-quality care physician-owned hospitals are able to give, he says the move would essentially create "two classes of healthcare."
Irene Tsikitas
