Media Largely Ignore ObamaCare's War on
Physician-Owned Hospitals

By Ken Shepherd | March 29, 2012 |


With the two-year anniversary of the law's signing and this week's marathon set of hearings before the Supreme Court about ObamaCare, it's a good time to examine just another area where the media have failed to report on a little-reported liberty-infringing aspect of the health care overhaul.

No, I'm not talking about not the individual mandate. I'm talking about a provision that forbids the formation of new physician-owned hospitals (POHs) and severely restricts the expansion of existing ones.

As USA Today reported in October 2010 (emphasis mine):

Physician-owned hospitals, which proliferated in the 1990s, have sparked intense battles within the hospital industry for years. The facilities' rivals -- non-profit community hospitals and for-profit institutions without physician investors -- have long pressed Congress to curb physician facilities. In 2003, Congress imposed a lengthy moratorium on the construction of new doctor-owned hospitals that specialize in cardiac, orthopedics and other specific areas.

The new law is much tougher. It applies to all physician hospitals, even those that aren't specialty facilities. Besides barring new doctor-owned hospitals after this year, it prohibits the 269 existing institutions from expanding unless they meet stringent conditions. As a result, backers of the physician hospitals say, the new law is something of a legal minefield for doctors' facilities.

So essentially POHs have been targeted by rivals that are better-connected politically and exploited those connections to afflict POHs in the ObamaCare law, which of course was exceedingly long and which hardly anyone actually read before voting on.

Considering that the media love to paint physicians and medical specialists as the heroes and large corporations as the villains in health care stories, you'd think they'd be all over a provision in the law that is certain to affect Americans' access to health care from hospitals where the practicing physicians actually own the facility. But alas, that's not the case and in fact what little coverage there is paints supporters of POHs as advocating a special interest.

A search of Nexis from March 2010 thru today finds zero mentions of either "physician-owned hospital" or "doctor-owned hospital." Similar searches of Nexis through editions of the Washington Post yielded only one hit, a February 16, 2012 article that noted that "Senate Republicans demanded a provision" in a $150-billion economic stimulus bill "that would exempt physician-owned hospitals from portions of the 2010 health-care law, a move Democrats opposed."

Searches through the New York Times yielded only one story, from December 13, 2011, entitled "G.O.P. Bill Would Benefit Doctor-Owned Hospitals", and that was skewed to attack POHs (emphasis mine):

WASHINGTON -- The House Republican bill to hold down payroll taxes and extend unemployment benefits, coming up for a vote on Tuesday, offers a special dispensation to doctors who invest in hospitals.

The bill would repeal and relax several provisions of the 2010 health care law that clamped down on doctor-owned hospitals. The bill would allow such hospitals to open if they were under construction at the end of last year, and it would allow them to expand if they were already in existence.

Congressional aides say dozens of hospitals and their physician owners could benefit.

Numerous studies have found that when doctors have a financial stake in a hospital, they tend to order more tests and procedures, raising costs for Medicare and other insurers.

Many doctor-owned hospitals specialize in surgery, orthopedics or heart care. Proponents say they provide superior services.

The provision of the House bill allowing the spread and expansion of doctor-owned hospitals would increase federal spending by $300 million over 10 years, the Congressional Budget Office said.

Dr. Michael E. Russell II, president of Physician Hospitals of America, a trade group for doctor-owned institutions, said the 2010 law ''limits access to care,'' at a time when the need for it will increase because of the expansion of coverage. More than 30 million Americans are expected to gain insurance under the 2010 health care law.

Dr. Russell said the House Republican bill would benefit 25 to 30 hospitals that were under construction but had not opened. In addition, he said, more than half of the 270 existing doctor-owned hospitals want to expand, and they too could benefit.

But Representative Pete Stark of California, the senior Democrat on the Ways and Means Subcommittee on Health, said the provision dealing with doctor-owned hospitals was ''a special interest giveaway.''

Richard J. Umbdenstock, the president of the American Hospital Association, said his group could not support the House Republican bill because it would cut Medicare payments to hospitals, forcing some to “limit services and limit access for patients.”

Mr. Umbdenstock also deplored the loosening of restrictions on doctor-owned hospitals.

“Research shows that there is more utilization of services when hospitals are owned by physicians,” Mr. Umbdenstock said.