More specialty hospitals on the horizon?by Cara Hetland, Minnesota Public Radio
There's a national debate over whether doctors should own the hospitals they practice in. Many states have "physician-owned specialty hospitals" that compete with full service hospitals for patients and procedures.
Minnesota, Iowa and North Dakota have state laws that make it difficult for physicians to own their own hospitals. But in South Dakota there are eight such facilities -- the most in the country per capita. That's why some of the national players in this debate are there.
Sioux Falls, S.D. — Cindy Morrison sits at her desk on the fifth floor, known as the corporate floor, at Sioux Valley Hospital. On the floors below, babies are born, bones are set and heart operations take place.
Sioux Valley is a full-service hospital. Morrison, vice president for public policy, is adamantly against doctors owning hospitals.
"By law, only one person can admit a patient to a hospital and that's a physician," says Morrison. "When that physician owns the hospital that he's admitting a patient to, it's a conflict."
Morrison represents one of two national groups pressuring Congress on this issue. Both groups are based in Sioux Falls. Morrison and Sioux Valley Hospital formed a coalition of 150 full-service community hospitals across the country that want Congress to put an end to physician-owned hospitals.
"We believe very strongly that a patient should never have to wonder if their physician is more interested in them as a patient, or for their own financial goals," says Morrison.
A few blocks away, Molly Gutierrez sits in her office. She lobbies for the other side from the administrative offices for the Sioux Falls Surgical Center. This center is one of the eight physician-owned specialty hospitals in South Dakota.
Surgeons here perform mostly same-day procedures like scoping a knee or repairing a hernia -- surgeries that don't require intensive care. These are also the procedures that are the most lucrative. That's one reason why the specialty hospitals want them.
But Gutierrez, executive director of the American Surgical Hospital Association, says specialty hospitals are created so physicians can control every aspect of patient care.
"Physician-owned hospitals are a positive thing for health care, because they really provide a choice to patients," says Gutierrez.
It's not just a new medical choice for patients; Gutierrez says specialty hospitals offer more efficient health care with fixed costs. She says physicians work more effectively because they have a personal stake in the business.
"The key for doctor-owned facilities is they can affect what kind of equipment they buy, the staff they hire, the cleaning schedule and turnaround time in the operating room and the infection rate," says Gutierrez.
It all sounds like a good deal for the patient. But in this battle over ownership and procedures, one man says it's the patient who's getting lost.
Michael Myers is a former hospital CEO at Mayo's St. Mary's in Rochester and Fairview hospital in Minneapolis. Myers has also helped physicians open hospitals, including the Surgical Center in Dakota Dunes, South Dakota. Currently Myers teaches health care business and law classes at the University of South Dakota.
He says the potential for conflict in doctor-owned hospitals stems from an issue of trust. Most patients don't question where they'll have a medical procedure done, and they don't think to ask their doctor what's in it for them.
Myers says specialty hospitals do draw patients and procedures away from the nonprofit, full-service hospitals. But he says that shouldn't be the biggest worry, because the health care industry is booming.
"Rivers of money are flowing through these systems and they are expanding at rapid rates," says Myers. "So it's hard to begin to feel very sorry for the hospitals. And you certainly can't feel sorry for the physicians. They're all doing remarkably well."
Myers says there are federal laws on the books that prohibit doctors from owning labs and pharmacies because of conflict of interest. But there's a loophole that allows ownership of a hospital. It's called the whole hospital exception.
Three years ago, a federal moratorium was put in place that stopped the expansion of physician-owned hospitals. The government wanted a study about Medicare and Medicaid payments at those hospitals. Last month the moratorium was lifted.
Michael Myers says in the states that allow it, there will be more physician-owned hospitals competing with full service hospitals. He doesn't expect Congress to get in the middle of that debate again.
- Morning Edition, 09/26/2006, 7:24 a.m.