Recent analyses indicate that physician-owned hospitals (POHs) deliver care at significantly lower costs to Medicare, with some studies showing savings ranging from 7% to 15% compared to non-physician-owned facilities for similar patient populations. This data emerges amidst ongoing debate and calls from various groups to re-evaluate and potentially lift the restrictions imposed on POHs by the Affordable Care Act (ACA) of 2010.
A recent social media post from "A Midwestern Doctor" highlighted the contentious history of POHs, stating, > "Did you know physician owned hospitals had better patient outcomes, so hospital lobbyists made the Democrats ban their competitors to support the Affordable Healthcare Act?" This tweet points to a long-standing controversy surrounding these facilities.
Prior to the ACA, POHs, particularly specialty hospitals, were often criticized for allegedly "cherry-picking" healthier, commercially insured patients and potentially leading to overutilization due to physician self-referral. However, a 2023 study co-funded by The Physicians Foundation and the Physician Advocacy Institute, utilizing Medicare data, found minimal differences in patient mix between POHs and other hospitals, challenging the "cherry-picking" narrative. This study also revealed the substantial cost savings for Medicare.
The ACA effectively halted the growth of new POHs and restricted the expansion of existing "grandfathered" facilities by preventing them from billing Medicare. This legislative move was significantly influenced by lobbying efforts from traditional hospital associations, which viewed POHs as a competitive threat. The American Hospital Association, for instance, had advocated for permanent restrictions on specialty POHs.
Proponents of POHs argue that these facilities foster competition, improve efficiency, and can lead to better patient outcomes and satisfaction. Research suggests that POHs often provide higher quality care at lower or comparable costs, including lower mortality rates and fewer complications in specialty areas like cardiac or orthopedic care. The continued restrictions on POHs are seen by some as contributing to hospital consolidation, which has been linked to rising healthcare prices.
