Health care reform is the hot topic these days for most Americans, because at some point we all need to see a doctor or receive treatment at a hospital. And while I believe that our health care system needs to be reformed, I more firmly believe that reform should emerge through the cooperative efforts of all the players in the health care field using free market principles to achieve our goals of expanding access, controlling costs and improving quality of care.
Unfortunately, President Obama’s health care initiative would restrict the roles of physician-owned hospitals in his “reformed†system. Predictably, many in the news media and Congress, especially Sen. Charles Grassley and Sen. Max Baucus, are spreading misinformation that entrepreneur-based hospitals and clinics are detrimental to reform, all without providing any evidence to support their positions – just innuendo and fear.
The misunderstanding runs the gamut of the media, from the Kansas City Star in my own community, to the national newsweekly Time magazine.
The Star recently ran an article in which a family practitioner said physician-owned hospitals drive up health care costs. Time tried to impugn the quality of care provided at these types of facilities and suggested that existing acute-care hospitals are being hurt by the competition.
These articles are almost laughable in their reliance on rhetoric without hard data to back such claims. Critics of physician-owned hospitals always make these claims. Actually, the truth is 180 degrees in the other direction.
There are a large number of surgery centers in the Kansas City area that are owned by physicians – and some in partnership with hospitals — and they are one of the primary reasons why costs in this market are lower than most. These facilities deliver health care less expensively with better outcomes and patient satisfaction than was available before they existed.
The growth in physician-owned facilities has actually been driven by technology and demographics. For example, conventional Lasik eye surgery costs a third of what it did 10years ago. And there has been virtually no inflation in the prices of cosmetic surgery, even though there have been enormous technological advances, and the demand for these procedures has increased six fold since the early 1990s.
Studies by the Government Accounting Office (GAO), Medicare Payment Advisory Commission (MedPAC), and Centers for Medicare and Medicaid Services (CMS) confirm that general hospitals are largely unaffected by competition from physician owned hospitals. According to an April 22, 2009, study by the Center for Studying Health System Change (HSC), general hospitals are able to respond to the presence of physician owned hospitals with few, if any, changes to the terms of care for their patients.
Physician ownership of hospitals is not new and they are not “upstart competitors†as the Time article suggests. Physician ownership of hospitals has a long and distinguished history in the United States. Physicians’ current interest in hospital ownership comes from the realization that medical care is no longer controlled by the providers, but is dominated by administrators and medical conglomerates that have lost sight of the real task – taking care of people who are sick or injured.
Currently, there are more than 220 physician-owned hospitals in 33 states and only 32 are “single specialty hospitals,†such as those referred to in the Time article. As noted by a Consumer Reports study summarized at HPCwire, many are among the best hospitals in the state in their field. The remainder includes 18 general acute care facilities, 153 multi-specialty facilities (children’s, women’s and multi-specialty surgical hospitals), and 19 rehabilitation/long term care hospitals. More than half are joint ventures with community hospitals and other third parties and are located in rural areas, inner cities and fast-growing suburbs that have shortages of hospital beds and specialty physicians. Together they employ nearly 60,000 Americans.
Under the bills currently being considered, 104 hospitals under development would not be allowed to open and more than 20,000 jobs would be lost.
The government, however, is spreading misinformation about the role of physician-owned hospitals. Senators Grassley and Baucus are either misinformed or overpaid by the status quo. So as we talk about health care reform, expanding access, improving quality and reducing costs, we should embrace physician-owned hospitals instead of smearing them with unfounded accusations.