Physician-owned hospitals that have not yet opened or received certification from Medicare are racing to do so before 2011, after which the federal health reform law will bar new physician-owned facilities from the program, Kaiser Health News/USA Today reports.
The overhaul also sharply restricts the expansion of already established physician-owned hospitals, permitting them only in cases when the hospital is located in a state with a shortage of hospital beds and in counties growing 50% faster than the overall state, among other requirements.
As many as 30 new physician-owned hospitals are expected to beat the deadline, according to Molly Sandvig, executive director of Physician Hospitals of America.
Sandvig said another 44 likely will be unable to open by the end of December and must decide their next course of action. In some cases, physicians might have to sell their ownership stake for the hospitals to open.
Critics of the reform provision say the government should not hinder any hospital models so close to when 32 million additional U.S. residents are expected to get health coverage under the law.
However, Randolph Fenninger -- a lobbyist for physician-owned hospitals -- said that a Republican-controlled Congress might be friendlier to the hospital model. Many analysts expect the GOP to take control of at least one chamber of Congress as a result of the midterm elections next month, which could lead to eased restrictions for new and expanding physician-owned facilities, according to Kaiser Health News/USA Today.
In the meantime, some physicians-owned hospitals are looking to the courts for a reprieve. PHA and the physician-owned Texas Spine & Joint Hospital -- which currently has stalled its expansion project because of the law -- are suing the federal government, claiming that the overhaul is unconstitutional.
History of Controversy Over Physician-Owned Hospitals
The for-profit, physician-owned hospital model has been resisted for years by influential groups, including the American Hospital Association.
AHA has criticized the model for focusing on profitable care procedures, such as orthopedics and cardiac care, and dismissing money-losing areas of care, such as emergency departments and burn centers.
Jean Mitchell -- a Georgetown University Public Policy Institute professor and health economics specialist -- said physician-owned hospitals are "cash cows" that typically perform profitable services and care for healthier patients.
However, Michael Russell, president of PHA, said that critics of the model are guilty of "pure anti-competitive behavior."
He added that physician-owned hospitals increase access to care, decrease costs and ensure better quality -- three things that the overhaul attempts to accomplish (Weaver, Kaiser Health News/USA Today, 10/28).