USA Today Examines Trend of Physician-Owned ‘Specialty Centers’
USA Today examines the trend of physicians who become "hospital entrepreneurs" by investing in "specialty centers" that focus on services such as cardiac care and orthopedic surgery. Proponents of the "controvers[ial]" centers say they offer patients "hotel-like amenities," give doctors "more control" than do traditional hospitals and create "better medical care" by focusing on specific diseases or conditions. By working in facilities that they own, doctors can increase their earnings by seeing patients on a more efficient schedule than that of traditional hospitals and by sharing the facility's profits. But opponents of the hospitals say they "take lucrative services from traditional hospitals," contribute to rising medical costs by creating "duplicative services," create conflicts of interest for physicians and "widen the health care gulf between rich and poor." Frank Nachtman, chief executive of Marshall Hospital, a traditional facility in Placerville, said, "They'll skim off the cream, take the profitable patients and dump the unprofitable ones on us. They want the healthy and wealthy patients." He added, "What about the sick and the poor? This will cause the demise of the whole non-profit health care system" (Appleby, USA Today, 3/18).
The trend has sparked a debate in Congress over how to regulate doctors who refer patients to facilities they own for treatment. House Ways and Means Committee Chair Rep. Bill Thomas (R) has requested that the General Accounting Office, the investigative arm of Congress, examine the impact of specialty hospitals on health care costs, care for low-income patients and traditional hospitals. Although federal law prevents physicians from earning "kickbacks" on such referrals, a loophole in the law permits patient referrals to facilities in which a doctor has invested, USA Today reports. Rep. Jerry Kleczka (D-Wis.) has introduced legislation (HR 2490) that would close that loophole (Appleby, USA Today, 3/18).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.