Doctor ownership of hospitals faces legal setback

Put simply, physician-owned hospitals make other hospitals livid, as they often scoop up profitable business and (to hear the non-physician-owned hospitals tell it) suck the lifeblood out of community hospitals without such ownership in place. Community hospitals are so opposed to physician ownership, they're fighting for federal legislation banning such investments. So it's little wonder that they're delighted by a recent decision in which a physician-owned hospital and affiliated physicians were told that their anti-trust lawsuit against a competing hospital and health plan wouldn't fly.

In this instance, a federal judge in Arkansas has booted out an anti-trust suit filed by a group of cardiologists, the Little Rock Cardiology Clinic, against a competing hospital system and four insurers. The Clinic, which owns a 15 percent stake in local heart hospital Arkansas Heart Hospital, argued that health system Baptist Health and the insurers conspired to restrain trade and monopolize the market for cardiology services for privately-insured patients in a 16-county area. Baptist and the insurers did this, the Clinic says, by excluding Clinic doctors from the Arkansas FirstSource Network shortly after Arkansas Heart opened. The exclusion was designed to protect Baptist from competition by Arkansas Heart, the doctors argued.

However, the federal judge held that the anti-trust complaint had no merit, since neither Baptist nor the insurers actually offered cardiology services, making it impossible for them to monopolize the market. (In other words, the judge defined "competition" and "market" much differently than the doctors.) Now, some hospital groups are celebrating the decision, while advocates for physician-owned hospitals say the ruling turns on a technicality.

To learn more about this case:
- read this Modern Healthcare piece

Related Articles:
Physician-owned hospitals: Are they the boogeyman?
U.S. Reps give boost to physician-owned hospitals
Physician-owned hospitals: A conflict of interests?
Partnership building 10 doctor-owned hospitals

Suggested Articles

The profit margins and management of Community Health Group raise questions about oversight of managed care insurers.

Financial experts are warning practices about the pitfalls of promoting medical credit cards to their patients.

A proposed rule issued by HHS on Tuesday would expand short-term coverage, a move Seema Verma said will have "virtually no impact" on ACA premiums.