Skip to comments.Doctor-owned hospitals
Posted on 05/22/2013 2:29:12 PM PDT by JerseyanExile
In writing about the ACA and our health-care problems, I started to think more and more about supply restrictions. In every other industry, costs come down when new suppliers come in and compete. Yet our health-care system is full of restrictions and protections to keep new suppliers out, and competition down. Then we wonder why hospitals won't tell you how much care will cost, and send you bills with $100 band aids on them.
In that context, I was interested to learn this week about the ACA's limits on expansion of doctor-owned hospitals. The Wall Street Journal article is here, and I found interesting coverage in American Medical News. The text and analysis of the amazing section 6001 of the ACA is here.
In astouding (to me) news, the ACA prohibits doctor-owned hospitals from expanding, and prevents new doctor-owned hospitals at all, if they are going to serve Medicare or Medicaid patients. From WSJ
The Affordable Care Act aimed to end a boom in doctor-owned hospitals, a highly profitable niche known for its luxury facilities. Instead, many of the hospitals are wiggling around the federal health-care law's growth caps and even thriving.
Only in medicine is "highly profitable niche known for its luxury facilities" a bad thing. Didn't the left like employee-owned companies, worker cooperatives and all that? And when is getting around silly restrictions "wiggling?" Et tu, WSJ?
The law, passed in 2010, blocked building any new physician-owned hospitals and prevented existing ones from adding beds or operating rooms in order to qualify for Medicare payments
Now, let's see if it takes you more than 10 seconds to figure out the unintended consequences of this brilliant idea...
(Excerpt) Read more at johnhcochrane.blogspot.com ...
For a doctor to build a hospital is now a crime.
This makes sense to the pseudo-intellectuals who run our country.
Meanwhile, pretty much every congressman and senator retires as a multi-millionaire. But that’s “doing well by doing good.”
Soon to be “IRS-owned” hospitals, as I reckon ...
no more Mayo brothers?
That's not exactly true. Building or owning a hospital is not an issue. Referrals are the issue.
The original rules that dealt with physician ownership of hospitals are contained in the Ethics In Patient Referrals Act of 1992 (also called the "Stark Law"). Doctors can build a hospital, but if they refer patients for 'designated health services' at the hospital, they can't submit claims to Medicare or Medicaid for those services without violating the federal False Claims Act.
The Stark Law had exceptions for rural hospitals and specialty hospitals.
That's a little simplistic, but I hope you get my point.
You are correct about self referrals. However, many physician owned hospitals have luxury suites with real beds, gourmet meals and attentive nurses. They build a reputation for such care and there is no need for self referral when everyone in town wants to have that type of care. They do not scrimp on nursing care either. The largest hospital in our town has been plagued with infections and cut backs in nurses as well as support staff. They also cut the air conditioning in the summer months where we typically see temperatures in the 100 degree marks for weeks on end. Who wants to lay on a plastic mattress during that time??
doctor owned hospitals is a good idea, so of course they oppose it
The hospital ownership provisions of the Stark Law, 42 USC 1395nn(d)(3) weren't included because of an issue with physician-owned hospitals with luxury suites. They were initially meant to combat the growing number of hospitals who were selling subdivisions within the hospital to physicians or physician groups with the intent of locking in their referrals.
Note I've never said I'm defending the Stark Law.
Depends. If - and say if - hospital services are anything like clinical laboratories or nuclear imaging, it may not be such a good idea.
Pre-Stark, doctors who owned clinical laboratories were referring several hundred percent more clinical laboratory tests that those who didn't, according to the GAO report that initially led to the Stark Law. Perhaps those physicians who owned clinical laboratories better understood the use of them, but it's hard to argue with the claim that the reason those physicians ordered so many clinical laboratory tests is because they profited from them.
It was the same thing with nuclear imaging, when it was added as a 'designated health service' under the Stark several years ago. Cardiologists who owned nuclear imaging equipment were ordering 800% more nuclear imaging tests than those who didn't have an ownership interest. At least that's what the GAO report said.
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