Where is physician ownership headed? Key thoughts from Dr. Blake Curd on POHs, ASCs

A lot has been said about physician-owned hospitals, despite the positive clinical outcomes and results coming from these institutions. Opponents complain POHs take the “best patients” — the healthiest patients with private insurance — and cherry-pick cases where complication risk is low. They claim over-utilization when physician ownership is involved.

However, a new study disputes this claim. A BMJ study found no evidence that POHs avoid poorer patients or patients from minority groups.


“This is another study in a long list of studies that demonstrates hospitals with physician ownership and direction are high quality, low cost and very efficient method of delivering healthcare,” says R. Blake Curd, MD, president of Physician Hospitals of America. “It’s everything healthcare reform is supposed to be about. The more data that comes out showing how well we stack up against traditional hospitals shows the claims that have been made about POHs in the past were nothing but rhetoric and people trying to protect their business model against a better more progressive model that supports better patient care.”


The Affordable Care Act does not allow new POHs to accept Medicare and Medicaid patients and won't allow already-existing POHs to expand if they want to continue serving Medicare and Medicaid patients.


“It’s time for lawmakers to take another look at this and remove the moratorium on physician-owned hospitals,” says Dr. Curd. “It’s important for physicians to have a direct impact on what is going on at their hospitals.”


There are 219 physician-owned hospitals in the United States, often small and for-profit entities. There were 120 POHs that were general hospitals, and many are located in urban areas. The study compared POHs and non-POHs around patient populations, quality of care, cost and payments.


Here are five key findings:


1. Patients at POHs were slightly younger on average — 77.4 years old versus 78.4 years old. The POH patients were less likely admitted through an emergency room. Around 23 percent of the POH patients were admitted through the ER, compared with 29 percent of non-POHs.


2. There was an equal likeliness that the patients would be black — 5.1 percent for POHs and 5.5 percent for non-POHs. The POHs reported 14.9 percent of patients used Medicaid, compared with 15.4 percent of non-POHs. The two groups also had similar numbers of chronic disease and predicted mortality scores.


3. Both POHs and non-POHs had similar patient experience scores, process of care, risk-adjusted 30-day mortality, 20-day readmission rates, costs and payments for acute myocardial infarction, congestive heart failure and pneumonia. The costs and payments were around $10,113 at POHs and $10,024 at non-POHs.

CMS payments for acute myocardial infarction, congested heart failure and pneumonia were around $7,217 at POHs and $7,033 at non-POHs.


4. Specialty POHs had higher patient experience scores than general POHs — 81.6 percent versus 57.3 percent. Specialty POHs also outperformed general POHs on an indirect composite measure of process for acute myocardial infarction, congestive heart failure and pneumonia. Specialty POHs had a higher risk-adjusted readmission rate for acute myocardial infarction, congestive heart failure and pneumonia.


5. The study authors concluded POHs comprise just 6.3 percent of Medicare admissions in any given market. "It seems less likely that POHs are having a meaningful impact on the financial viability of non-POHs," they concluded.


Further trends in the industry point to the perils of hospital dominance. Hospitals are employing physicians at a higher rate than before and purchasing large physician groups. There is tremendous vertical integration that has a negative impact on efficiency and cost of care.


“This study shows physicians who are employed are more likely to send patients to a high cost, low quality hospital because they are employed there,” says Dr. Curd. “The non-employed physicians are more likely to send patients to a low cost, high quality hospital.”


The ASC industry and physician-ownership advocates have very significant champions in the United States Congress working towards making these changes.


“Getting this piece of the healthcare law repealed is among the top priorities because it gives access to high quality, low cost hospitals,” says Dr. Curd. “Demand is high and POHs can’t expand. They can’t service as many patients as they would like. If the situation isn’t corrected, we are going to see the cherry-picking situation so many have claimed because not everyone can receive care. You will have business people making these decisions.”


The ASC industry currently isn’t under attack, but is an easy target for hospital industry champions. “If they are embolden by the continued success in stalling the POH industry, the ASC industry is another easy target. Then comes imaging, lab services and other physician-owned businesses,” says Dr. Curd. “The hospital industry is by and large all about consolidating as many services as they can under their own roof and not giving anyone else a chance. It’s under the guise of saving money, but really they just want to keep volume.”


Beyond making changes to the POH moratorium, Dr. Curd says re-examining certificate-of-need laws are the next step in opening the door for more physician-owned facilities. “CON laws are outdated and no longer warranted, and should be outlawed at the state level,” says Dr. Curd. “They aren’t employed judiciously; if a non-profit hospital wants to build or add, there isn’t a problem but physician-owned facilities are blocked and have to jump through hoops. The hospital and healthcare industry needs to have the best people providing the best product rise to the top and others can emulate their success.”

 

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