Physician-owned hospitals unfairly targeted by health reform, group argues

Poor, beleaguered McAllen: Did you ever suspect that you'd become the focus of the national debate over healthcare costs? Well, like it or not, the smallish Texas town has become the rallying point for reformers, who argue that it's high cost structure highlights everything that's wrong with the current healthcare system.

Not surprisingly, McAllen is also a battleground, with some parties being targeted as the villains in the affair. That's just what happened to physician-owned hospitals there, according to the trade group Physician Hospitals of America. The group just issued what can only be described as an indignant press release, noting that a current federal investigation of reimbursement hanky-panky in McAllen did not involve the town's physician-owned facilities.

It appears that since June 2009, when Atul Gawande wrote an article on McAllen and cost control that appeared in the The New Yorker, the PHA has been fighting arguments that physician-owned hospitals were to blame for the town's high costs of care. Now, the group is fighting hard to kill provisions in the House and Senate health reform bills that would prohibit doctors from referring Medicare enrollees to hospitals in which they have an ownership interest. Existing hospitals in operation before November 2009 could be grandfathered in, though terms differ between the two houses.

That's just unfair, suggests the PHA. The group notes Universal Health Services, not the town's sole physician-owned facility--Doctors Hospital at Renaissance--was fined $27.5 million by the DOJ, accused of providing kickbacks to physicians to get them to refer to its hospitals. Given such happenings, it makes no sense to target physician-owned facilities for special treatment, argues PHA leader Molly Sandvig, JD.

To get a feel for PHA's argument:
- read this press release

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