Physician-Owned Hospitals Are Losers in Healthcare Reform Law

Joe Cantlupe, for HealthLeaders Media , April 1, 2010

"There are some things in the legislation we have no problems with," he says. "We're totally in compliance with the requirement to disclosure our ownership to patients. We're very happy to tell our patients."

Last fall, as Congress began debating the healthcare reform issue and took steps to cut down physician-owned hospitals, Sen. Dianne Feinstein, D-CA, warned that it would "result in harm to patient access to care in California."

Feinstein pointed out how ongoing hospital construction projects were urgently needed, especially to meet California's strict seismic standards. One hospital's construction project that appeared to be at risk was at Pacific Alliance Medical Center, a 142-bed full-service hospital that has "been the community's main hospital for 140 years and was purchased by a group of physicians 20 years ago after the existing hospital board planned to lose and demolish the facility," Feinstein said in the letter to Sen. Max Bauer, D-MT. "The hospitals' clientele is overwhelmingly poor and the hospital serves the second largest population of Medicare, SSI and Medicaid patients of any hospital, public or private, in the entire country."

Another hospital where ongoing construction projects were threatened by the legislation included Loma Linda University Medical Center–Murrieta, which serves Riverside County, CA. Expansion was seen as needed because the hospital has only 1.47 hospital beds per 1,000 people, "well below" the national average of 2.7 beds, Feinstein said.

Then Feinstein got to the core of the debate. "None of these facilities are designed to cherry pick the most profitable patients; instead they're innovative ways to fill communities' needs for additional healthcare facilities," Feinstein said.

Pick and choose. This time, physicians lost their hold on hospitals—and patients lost, too.

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Joe Cantlupe is a senior editor with HealthLeaders Media Online.

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