Questions arise over future of physician-owned hospitals

Increasingly, physicians have been sinking money in hospitals--an investment which seems to be working out very well for most. However, a new provision proposed by Rep. Pete Stark (D-CA) for the 2008 Medicare bill could call a halt to the party. The provision would prevent physicians from owning more than 40 percent of a hospital, and perhaps just as damningly, would prevent hospitals with even minor physician investments from adding capacity or expanding.

The rule would have serious repercussions for such hospitals nationwide, but would hit the state of Texas particularly hard, as it plays host to one of the highest concentrations of physician-owned hospitals in the country. Meanwhile, it would prove an early Christmas present for traditionally-structured acute care hospitals, which have long resented and feared the ability of physician-owned specialty hospitals to cherry-pick high-margin patients.

To learn more about the status of doctor-owned hospitals:
- read this Austin Business Journal piece

Related Articles:
Partnership building 10 doctor-owned hospitals. Report
Physician-owned hospitals: A conflict of interests? Report
Congress considers specialty hospital regulation. Report

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