Physician-owned hospitals - an unavoidable trend IMO


The issue of whether or not hospitals run better when the doctor's who work there own all or part of it has been a contentious issue. A provision ram-rodded into a 2006 deficit-reduction bill was a mandate that could put a moratorium on hospitals that are partly owned and run by doctors by denying eligibility for medicare/medicaid reimbursement for services (a condition that makes running a hospital impossible). There's compelling arguments on both sides of this.There are almost 130 physician owned hospitals in the United States versus approx. 5000 plus general hospitals.

"General Hospitals", who offer wide ranges of service and exist as either not-for-profit or for-profit hospitals, claim that doctor's face conflicts of interest over patient referral and will "cherry pick" healthier patients in higher-profit areas of medicine (usually cardiac medicine/surgery and orthopedic surgery) while eschewing medicaid patients and money losing endeavors (like emergency room services).

Physician investors in hospitals meanwhile argue that existing hospital corporations fear competition, and that they've built highly efficient facilities which have a tendency to have more nurses on patient floors, invest more in high-technology, and provides amenities and levels of service not available at general hospitals.

There's data from the feds which actually show both arguments to be true simultaneously.

My personal take is that physician ownership is both necessary and will become increasingly common unless prohibited by congress (as the hospital lobby has worked towards in Washington). As the margins of the economics of organized medicine become tighter, hospital-based physicians are going to demand a "piece of the action" to offset the savaging of their income by medicare and corporate medicine reimbursement. Hospital-Physician partnerships will be necessary for institutions to attract and maintain their medical staff in some profitable specialties. When doctors have a stake and more input into operating decisions, I can't help but think we'll all be better off at the end of the day.

Will this affect Plastic Surgery much? Not really I suspect. Our specialty has been marginalized for years by hospitals as we don't generate near as much revenue as other surgical specialties like orthopedics, cardiac surgery, or transplant surgery. With outpatient cosmetic surgery now the horse pulling the cart for the public face of our specialty, I think more and more Plastic Surgeons will feel like they don't have much of a stake in that fight. That may be kind of myopic and narrow-minded, but it's true. Except for outpatient surgery centers, I don't think there's a lot of doctor's going to be lining up to throw money at the full-service hospital business.

There's a great blog on WebMD, "Mad About Medicine" which has a number of related articles on the economics of medicine. Good stuff!

Rob

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