While massive and potentially revolutionary healthcare changes loom on the horizon, physician-owned hospitals find themselves in a familiar position: wondering if the proposed legislation will mean their extinction.

 

"We are part of the health reform package, just as everything else under the sun is at this point," said Molly Sandvig, executive director of the Physician Hospitals of America.

 

HR 3200, which had not made it to a floor vote at deadline, would limit physician-owned hospitals and restrict their growth.

 

"We expect to see significant changes in general, not just physician-owned hospital language," Sandvig said. "When it comes to the floor, I think there's going to be basically another Battle Royale throughout the House to get that thing passed to the floor and then passed."

 

None of the healthcare reform bills introduced in the Senate so far mention physician-owned hospitals, she said. But the final package from the Senate Finance Committee will likely include some proposed restrictions.

 

The American Hospital Association supports a ban on physician self-referral to limited-service hospitals. The AHA says there should be some limited exceptions for existing facilities that meet strict investment and disclosure rules. In the last two years, at least seven pieces of legislation have proposed a self-referral ban; all have failed.

 

American Hospital Association officials could not be reached for comment. However, the AHA has on numerous occasions come out in favor of banning self-referral to physician-owned hospitals. While these types of facilities provide doctors with the opportunity to earn more money and have exerted greater control over their operating environment, the AHA says limited-service hospitals can have a devastating effect on healthcare delivery and communities' costs.

 

The AHA says its research shows physician-owned specialty hospitals undermine the healthcare safety net by jeopardizing patients' and communities' access to vital services. The specialty hospitals target more lucrative services, such as cardiac and orthopedic procedures, according to the AHA. Stripping a community hospital of that revenue, often the bulk of its income, weakens the hospital's finances and places the community's safety net at risk. Physician owners also refer more patients to their hospitals.

 

The result is higher utilization rates and higher costs for Medicare and other health insurers, according to the AHA. The facilities also create a conflict of interest between a patient's needs and his or her physician's financial interests.

 

Congressional Budget Office estimates show restricting existing facilities' growth and banning new hospitals would save $1.2 billion over a 10-year period.

 

The Physician Hospitals of America has countered with its own studies that show the facilities provide higher quality care at lower costs, and that community hospitals are not harmed by the physician-owned hospitals' presence.

 

Patti Clement, chief executive officer of The NeuroMedical Center Surgical Hospital in Baton Rouge, said the physician-owned hospitals defeated an earlier effort to prevent new facilities from being built and existing facilities from expanding.

 

It makes no sense to stop a hospital from expanding in a technology-driven industry, Clement said. But HR 3200's language is a better alternative for physician-owned hospitals than being told to close or have a fire sale.

 

Clement said The NeuroMedical Center is working closely with Sandvig and the Physician Hospital Association, lobbying hard on Capitol Hill and telling their side of the story to members of the Louisiana Congressional delegation.

 

"We've actually brought in most of the Louisiana delegation to our facility within the last couple of months," Clement said.

 

The hospital has also gotten its patients to take part in a letter-writing campaign to Louisiana's members of Congress, Clement said.

 

"We believe the grass roots efforts have helped. We probably have gotten a thousand patients in the last couple of months to send letters in," Clement said. "We're sending them to all of the Louisiana delegation and some of the key leaders in Congress as well as the administration."

 

Clement said part of the physician-owned hospitals' strategy is to make sure representatives and senators have as much information as possible.

 

Most of the healthcare reform bills have so much information in them that it's difficult for one person to be conversant in every detail, she said. Unfortunately, things move pretty fast in Washington, and members of Congress aren't always looking at the data.

 

"I think we still run the risk of being targeted," Clement said.

 

That's why the physician-owned hospitals liked the Senate's decision to delay a vote on healthcare reform until after the recess, Clement said. The longer the delay, the more time people will have to examine the proposed legislation and find out what might have been slipped in under the guise of reform.