Trump administration recommends Congress lift physician-owned hospital ban

Laura Dyrda -

The Trump administration released a lengthy document examining the healthcare industry and making recommendations for changes going forward.

The document, titled "Reforming America's Healthcare System Through Choice and Competition," was created as a collaboration between the HHS, U.S. Department of Treasury and U.S. Department of Labor. It touches on several aspects of healthcare, including the insurance market, consolidation and the ACA's moratorium on physician-owned hospitals.

Since the moratorium took place in 2010, 37 planned physician-owned hospitals were not constructed, according to the report, but now the Trump administration recommends lifting the moratorium.

"These restrictions, which were favored by the American Hospital Association, were included to address potential financial conflicts of interest with doctors referring patients to their own hospitals and concerns that physicians may be referring the healthiest patients to their hospitals. Those concerns may have been overstated, considering that many studies suggest physician-owned hospitals provide higher-quality care and that patients benefit when traditional hospitals have greater competition."

The document goes on to cite a study published in the Journal of the American College of Surgeons showing physician-owned surgical hospitals performed better in Medicare's value-based purchasing programs than non-physician-owned hospitals. Studies also show patients are less likely to experience complications at physician-owned specialty hospitals.

As a result, the report recommended Congress replace current restrictions. "Congress should consider repealing the ACA changes to physician self-referral law that limited physician-owned hospitals," the report states.

In addition to preventing new physician-owned hospitals, the moratorium banned existing physician-owned hospitals from expanding. As a result, physician-owned hospitals have found it challenging to grow and survive in the changing healthcare market. Last week, El Paso (Texas) Surgical Hospital, a physician-owned hospital focused on orthopedics, said it would close at the end of the year, citing financial and operational issues.

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