Scope of Practice

House bill would repeal limits on physician-owned hospitals

Tanya Albert Henry , Contributing News Writer

Federal law essentially bans new construction of physician-owned hospitals and makes it nearly impossible for existing facilities to grow. But a bill that Sam Johnson, R-Texas, introduced in the U.S. House of Representatives would repeal those portions of federal law, opening the door for new physician-owned hospitals to be built and for existing physician-owned hospitals to broaden their offerings to the community.

The bill has bipartisan support from more than 50 co-sponsors and has been referred to the Energy and Commerce and the Ways and Means Subcommittees on Health.

AMA CEO and Executive Vice President James L. Madara, MD, sent a letter to Rep. Johnson in support of H.R. 1156, the “Patient Access to Higher Quality Health Care Act of 2017.”

“Your bill would level the playing field, allowing physician-owned hospitals to remain competitive, continue their solid record of providing the highest quality of health care to patients and contribute significantly to the communities they serve,” Dr. Madara wrote.

Physician-owned hospitals have been shown to provide the highest quality of care to the patients they serve, he noted.

They are consistently among the top hospitals recognized for high quality care and patient satisfaction under the Hospital Value-Based Purchasing (VBP) Program, which the Centers for Medicare and Medicaid Services (CMS) administers. Despite physician-owned hospitals accounting for just 5 percent of hospitals that participate in the VBP, seven of the top 10 performing hospitals and 40 of the top 100 performing hospitals were physician-owned in the 2017 fiscal-year rankings.  

And when Physician Hospitals of America, an association for physician-owned hospitals, analyzed CMS payment data, it found that these facilities saved Medicare $3.2 billion over a decade.

“I’m sure all Americans can agree that everyone deserves access to quality, affordable health care,” Rep. Johnson said in a statement. “I’m sure we also agree that competition in the marketplace is a good thing. … It makes no sense to prohibit good hospitals from serving their communities. This bill is about doing the right thing. Americans want, need and deserve quality, affordable health care options.”

Dr. Madara wrote to Johnson that the AMA looks forward to working with him to repeal the constraints.

“Limiting the viability of physician-owned hospitals reduces access to high-quality health care and has a destructive effect on the economy in communities these hospitals serve,” Dr. Madara wrote. “Limits on existing physician-owned hospitals put them at a competitive disadvantage, making it difficult for them to respond to the health care needs of their local communities.”