Concerned About Costs, Congress Pushes Curbs on Doctor-Owned Hospitals

[flashl]

WASHINGTON — For years, Democrats have been trying to stop the proliferation of doctor-owned hospitals, in the belief that they drive up costs by encouraging doctors to order more procedures.

Now Democrats in Congress are moving to impose new restrictions on these for-profit hospitals, but they have carved out exemptions for a few institutions represented by influential senators and well-connected lobbyists.

• Senator Patty Murray of Washington, a member of the Appropriations Committee and the Senate Democratic leadership, secured a special dispensation to help Wenatchee Valley Medical Center, in rural Wenatchee, Wash. The provision was included in a bill that was passed recently by the Senate and is coming up soon in the House.
  
• Senator Herb Kohl, Democrat of Wisconsin, persuaded the Appropriations Committee and the full Senate to accept legislative language benefiting Aurora BayCare Medical Center in Green Bay.

...

Critics say that when doctors have a financial stake in a hospital, they have an incentive to send patients there because they not only receive professional fees for their services, but also can share in hospital profits and see the value of their investment increase. Such arrangements can lead to greater use of hospital services and higher costs for Medicare and other insurers, say the critics, including many in Congress.

On three occasions in the last 10 months, either the House or the Senate has approved legislation that would bar doctors from referring Medicare and Medicaid patients to hospitals in which the doctors have an ownership interest. None of the proposals have gotten all the way through the legislative process.

NY Times

[Clear Blue Sky]

1. Typical surgery centers ending up costing the insurance company

about half of what they would pay for the same procedure in a hospital. Efficiency saves money. Patients are happier in a surgery center as their stay is quicker and friendlier.

If doctors are doing unnecessary procedures, that's a different matter. Go after them. But to dumb down an efficient system is silly.

[Celebration]

3. There is a HUGE social cost in doing this

They are skimming the "best" patients out of the public hospital system, and the public hospital system, which provides emergency room service for heart attacks, automobile accidents, etc., are going out of business because of the skimming.

Every one of us who ever needs a decent emergency room system suffers under this model, as does health care for the uninsured.

This is a huge issue which must be addressed.

[Clear Blue Sky]

4. Does skimming mean the healthier patients?

Those are the ones best suited for a surgery center as they are less likely to have medical problems requiring a hospital stay.

Makes sense to bring those patients to a more efficient and cost effective facility rather than dumbing everyone down to the hospital level, which most patients don't need.

Same reason every infection isn't treated with the newest $10/pill antibiotic when 5 cent penicillin would do.

Hospitals partner with many of these surgery centers anyway, owning 50% (with physicians owning the other 50%) so they are recouping many of their losses.

Hospitals can be more efficient too, not trying to do everything, but instead concentrating on certain limited services. Does every hospital in the city need to offer every service? Pick one or two to be centers of excellence for heart, brain, cancer, etc.

[Celebration]

5. Skimming means the most PROFITABLE patients

If all the insurance covered patients that are uncomplicated go to surgery centers, that leaves the other real hospitals high and dry serving the poor and uninsured.

That is really, really bad for their balance sheets, and bad for emergency care.

Sure the surgery centers are efficient, but this has severe social costs.

[Clear Blue Sky]

6. Not necessarily just the most profitable.

If a surgeon has 5 cases to do in a morning, and 4 have good insurance and one has medicaid, it's either do all 5 at the surgery center or all 5 at the hospital. Convenience usually dictates doing all 5 at the surgery center. So the "bad insurance" patient gets the more efficient care anyway. Self pay (uninsured) patients are always done in a surgery center as their out of pocket cost will be 1/3 what it would be at the hospital for the same case. A hospital will want $5000 up front for an elective outpatient procedure, and a surgery center $1500.

Very sick patients need the hospital because of available back up services if they have problems after surgery. It's a patient safety issue, not an economic one.

Emergency care is another matter. Surgery centers don't provide that anyway.

[Celebration]

7. No but

Emergency care in hospitals is subsidized by the profitable surgery patients. Without them, the emergency care suffers.

[Clear Blue Sky]

8. Great dialog by the way...

What you say is true, but hospitals still have plenty of patients that must have hospital care because of required overnight stays, sickness, etc. Total joints are not surgery center procedures because they need a few nights in the hospital. And they are VERY profitable. Heart surgery likewise.

I just think it's a matter of having both facilities, each doing what they do best.

And as I mentioned, the trend is for hospitals to own a piece (usually half) of the surgery center, so in a way the surgery centers are still subsidizing the hospitals.

It's been fun chatting about this. Unfortunately a bunch of nitwits in Congress who know nothing about any of this will believe they know best and probably botch it up for everyone.

[Celebration]

9. probably should be handled locally

Markets vary widely with respect to these issues, I understand. I happen to have a good friend who is the dean of a medical school. This issue is near and dear to his heart. In his community, he feels that the doctor owned surgery centers are killing the big university hospital. He is really into community health care. I'm not so sure it is that big of an issue where I live.

[Clear Blue Sky]

10. Yes the town - gown relationship varies from city to city.

Some university centers remain tertiary centers, to handle the challenging cases, teach, research, etc.

Other centers get out in the community and compete directly with the folks in private practice, who would otherwise refer patients, serve as volunteer faculty, etc.

Need to strike a balance. In some cities this works well, others it doesn't.

[Double T]

2. The health care industry has a lot in common with the energy industry.

Corruption and greed are out of control and little if anything is being done to STOP IT.