Why the Nation's Best Hospitals are an Endangered Species

The healthcare reform law's hospital value-based purchasing program was developed to identify and encourage quality performance. Facilities that meet its standards see a bump in their Medicare reimbursements, while those that don't get docked.

Healthcare reform also put the brakes on physician-owned hospitals. It denies Medicare certification to any built after 2010 — in essence, prohibiting the establishment of new facilities — and imposing strict regulatory requirements on expansion for existing facilities.

Guess which kind of hospitals recently earned high marks in the Medicare bonus program?

According to a statement from the industry association Physician Hospitals of America, 9 of the 10 top-ranked hospitals in the value-based purchasing program (and 48 of the top 100) are physician-owned. A total of 3,428 hospitals participated in the program's first round.

"Ironically, the [Affordable Care Act] makes it unlawful for these same [physician-owned hospitals] from expanding to meet community demand," notes PHA Executive Director John Richardson, "so additional patients won't be able to reap the benefits these hospitals provide in great numbers unless this section of the ACA, Section 6001, is modified or repealed."

An article published in the January 23 issue of Investor's Business Daily quotes an Oklahoma City specialty hospital's CEO more succinctly.

"If the government wants value, why won't they let us expand?" asks Mark Galliart of McBride Orthopedic Hospital, which ranked 28th in the value-based purchasing program.

David Bernard