New health law will ban future physician-owned hospitals; The trauma and cost of patient "dumping"

The (Gary, Ind.) Post-Tribune: "One of the more obscure components of the landmark health care reform bill passed by Congress includes a provision to ban future physician-owned hospitals and crimp the growth of this rising market niche. Northwest Indiana is home to five hospitals owned wholly or partly by doctors practicing here. ... Even though the existing local physician-owned hospitals will not be shuttered under the law, it does constrain future growth by preventing those hospitals already operating from expanding their surgical and procedural rooms and patients beds and prohibits them from expanding physician ownership. Molly Sandvig, executive director of the 160-member Physician Hospitals of America, a trade and lobbying organization representing the for-profit, doctor-owned hospitals, said the legislation 'destroys over 60 hospitals that are currently under development and leaves little room for the future growth of the industry.' Sandvig said the law will put at risk 25,000 jobs in hospitals in 38 states and billions of dollars in investments. Indiana is home to 15 physician-owned hospitals and there are more than 200 nationally" (Taylor, 4/5).

The Omaha World-Herald: In a local controversy, physicians "who had started building their own hospital agreed Saturday to work with Good Samaritan Hospital toward a one-hospital system that involves two separate campuses." Members of the legislature had threatened to try to stop the construction with a moratorium on construction but Speaker of the Legislature Mike Flood, who was among the officials working on marathon negotiations with the doctors and hospital to reach a compromise, said he was pleased with the final outcome. "Three weeks ago, the doctors began work on a $20 million hospital in hopes of beating a Dec. 31 deadline to be certified for Medicare and Medicaid reimbursements under federal health care law. Good Samaritan officials said the physician-owned facility would cherry-pick lucrative medical procedures and threaten revenue that underpins Good Samaritan's more expensive and sophisticated services" (Konz, 4/4).

The Providence Journal: "While some experts are predicting better times for hospitals from the national health-care overhaul, an analysis conducted for the Hospital Association of Rhode Island predicts that the state's 11 acute-care hospitals stand to lose $465.7 million over the next 10 years. The study found that any gains from more patients coming through the doors with insurance will be more than offset by cuts in payments the hospitals receive from the federal government, according to Edward J. Quinlan, the association's president. Most of the loss, about $400 million, will be in the form of reduced Medicare payments, according to a review conducted for the association. ... Medicare will also cut how much hospitals get paid for patients who need to be readmitted, as a way to encourage higher quality care on the first visit. ... Meanwhile, the federal government intends to cut back its DSH (Disproportionate Share Hospital) program, which provides relief for uncompensated care" (Salit, 4/5). 

The Providence Journal, in a separate article: "Rhode Island hospitals have been hit hard by a recession that has shrunk endowments, threatened government aid and brought in more patients who don't have insurance or can't pay their bills. By the end of fiscal 2009, only 4 of the 11 acute-care hospitals in Rhode Island were covering their costs, down one from the previous year, according to annual financial reports. And preliminary figures from the first quarter of this year indicate that only one is still operating in the black, according to the Hospital Association of Rhode Island" (Salit, 4/5).

The Philadelphia Inquirer reports on the burden that "patient dumping" creates on hospitals by examining the experience of Soon Ja Kim, 83, who "was admitted Dec. 23 and spent all winter in a private room at Abington Memorial Hospital. ... Mrs. Kim was approved for discharge Dec. 27, four days after she arrived. But she had nowhere to go. Her family had left her in Abington's emergency room with no intention of returning to get her. ... There is slang in the hospital world for what the family had done: dumping. It happens in many hospitals. One patient, for instance, just left after spending 10 years in a New Jersey hospital."

"Mrs. Kim is 4-foot-8, speaks no English, and has been in America, illegally, for a decade. She has arthritic knees and can no longer stand. She needs a nursing home. But none will take her. Because of her illegal status, she is ineligible for Medicaid, which pays the bill for two out of every three nursing-home residents. Without Medicaid, and with no means of her own, she became Abington's problem. Covering illegal immigrants was a red-hot issue during the health-care debate. ... The final bill provides no remedy for Mrs. Kim. On March 12, after 80 days, the charges -- the sticker price that few pay -- were $444,208.63. The true cost of her care, said Louis Incognito, Abington's reimbursement director, was $1,200 a day -- $96,000, and rising. ... Patient 'dumping' burdens hospitals" (Vitez, 4/4).

---

This article was reprinted from khn.org with permission from the Henry J. Kaiser Family Foundation. Kaiser Health News, an editorially independent news service, is a program of the Kaiser Family Foundation, a nonpartisan health care policy research organization unaffiliated with Kaiser Permanente.