Think tank urges feds to lift ban on physician-owned hospital expansions

The Affordable Care Act (ACA) includes a ban on the creation of physician-owned hospitals and the expansion of existing facilities. But one organization believes it's time to lift the ban. 

Grace-Marie Turner, president of the Galen Institute, a think tank that supports free-market ideas for healthcare delivery, wrote in an opinion piece for Forbes magazine that "the punitive ban on physician-owned hospitals imposed by the ACA has to go." 

Physician-owned hospitals "are often the most efficient, state-of-the-art facilities in the country, the result of doctors' desire to be involved in making detailed decisions about the staff, equipment, training, and procedures that can best serve their patients," she wrote. Turner also noted that seven of the top 10 hospitals that received bonuses in the Hospital Value-Based Purchasing Program were physician-owned, even though they represent 5 percent of the hospitals nationwide. And, according to Turner, physician-owned facilities provide care at a lower cost than other acute care facilities.

Turner said the current rules are in place due to lobbying by the rivals to physician-owned facilities. She said politicians pay more attention to big hospitals because they are usually a major employer in their states and districts. The major hospital lobbies have indeed pressed Congress not to pass pending legislation that would loosen restrictions on physician-owned hospitals, but data have also shown that physician referrals tend to increase dramatically when they own a stake in the facility. A report by the Government Accountability Office concluded that imaging self-referrals cost the federal government $109 million in 2010.

Meanwhile, organizations for physicians and physician-owned hospitals have also been aggressively lobbying Congress on the matter as well.

To learn more:
- read the Forbes opinion piece

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