- Joined
- Feb 24, 2005
- Messages
- 15,463
- Reaction score
- 1,908
http://www.aamc.org/newsroom/reporter/may06/specialty.htm
Debate over for-profit specialty hospitals intensified recently as federal restrictions on the construction of new specialty hospitals are set to expire in June.
Known as "physician-owned" or "limited service" hospitals, specialty hospitals focus on a particular group of non-emergency medical procedures, such as orthopedic or cardiac cases, and often include physicians as financial stakeholders. They are not to be confused with traditionally specialized not-for-profit institutions such as children's or women's hospitals.
Although an 18-month moratorium on new specialty hospitals imposed by the Medicare Modernization Act of 2003 expired in June 2005, new hospitals will not be able to break ground yet. At the time the moratorium ended, the U.S. Department of Health and Human Services (HHS) suspended creation of new Medicare hospital provider numbers for specialty hospitals until the end of 2005 pending a review of whether these entities provided enough inpatient care to be considered "hospitals." The recently passed Deficit Reduction Act continues that suspension until this June and requires the agency to devise strategies specifically addressing this area.
Meanwhile, as of mid-April, Sen. Charles E. Grassley (R-Iowa), chairman of the Senate Finance Committee, was attempting to include new restrictions on specialty hospitals in a budget measure, which insiders said may have little chance of approval in the face of stiff Republican opposition in the House of Representatives. Grassley and Sen. Max Baucus (D-Mont.) both recently asked HHS and the U.S. Government Accountability Office (GAO) to review specialty hospital records on patient safety, quality of care, and physician investment activity.
Proponents of specialty hospitals claim that expert staff, high patient satisfaction, low infection rates, and shorter patient stays prove their utility. But many teaching hospitals view specialty hospitals as a negative force in the health care marketplace that create conflicts of interest when physicians who own hospitals (and often work at local community hospitals) refer patients there for financial reasons. Furthermore, opponents claim specialty hospitals could threaten the vitality of community hospitals by luring away the kinds of revenue-generating cases they need to finance basic services such as emergency room care services specialty hospitals do not normally provide.
"Specialty hospitals could upset the balance of health care and drive up costs," said Irene M. Cumming, president and chief executive officer of The University of Kansas Hospital in Kansas City, Kan. "We provide many services that are costly to maintain. The limited service hospitals focus on a small group of procedures and treat few, if any, uninsured or Medicaid patients. We believe everyone in our community deserves high-quality service, and we are troubled by anything that prevents us from fulfilling that mission."
The AAMC opposes the specialty hospitals system as currently constituted.
"The AAMC is concerned that specialty hospitals treat disproportionately low shares of very sick and uninsured and under-insured patients, create conflicts of interest, and negatively impact the revenue centers of teaching hospitals," said Richard Knapp, executive vice president of the AAMC and head of the office of government relations.
"We hope to continue working with lawmakers and national hospital organizations to develop bipartisan solutions that address specialty hospitals and close the regulatory loopholes that allow them to practice in this manner," Knapp said.
The hospitals came into existence via a loophole in the federal Ethics in Patient Referrals Act of 1989 known as the Stark Law loophole that allows community physicians to refer Medicare patients to a hospital in which they have a financial interest.
In most states, special "certificate of need" laws require proof that a community needs hospital services before one can be established. According to a 2003 GAO report on specialty hospitals, the seven states that do not have "certificate of need" laws Arizona, California, Kansas, Louisiana, Oklahoma, Texas, and South Dakota are home to two-thirds of the nation's 100 specialty hospitals. Various state efforts are underway to create or refine "certificate of need" programs and require specialty hospitals to broaden caseloads and accept underprivileged patients.
Officials at Houston's Texas Orthopedic Hospital said specialty hospitals can perform routine orthopedic procedures three times faster than the average general hospital, with an infection rate of less than 1 percent and high patient satisfaction.
"I think it's a win-win situation for everyone, especially the patient," said Tana Hafner-Burton, R.N., the hospital's chief nursing officer.
"Our doctors are happy because they have a vested interest. Nurses like it because they pick an area they're good at and are never switched. With our hospital's focus on orthopedics, the care is specialized, so you have patients that have similar cases and similar problems, so the physicians and nurses get better at the procedures, and the length of stay goes down," Hafner-Burton said.
Hafner-Burton said Texas Orthopedic Hospital does not significantly impact the caseloads of other general hospitals.
"There is a lot of talk about specialty hospitals 'cherry picking,' but there are enough orthopedic patients for everyone. And we do get our share of sick patients."
Nevertheless, the debate could worsen around the country, particularly if the number of specialty hospitals increases in coming months or years.
"It's a growing issue," said William Petasnick, president and CEO of Froedtert Hospital and Health System in Milwaukee. "If the restrictions to building new [specialty] hospitals are removed, you're going to see a proliferation."
Petasnick said most teaching hospitals have not yet been dramatically affected, but some in the same regions as specialty hospitals particularly in the Midwest and Southwest have seen a reduction in cardiac or orthopedic cases, and in extreme instances have had trouble covering the costs of certain services.
"The issue has to be on the radar screens of teaching hospitals," he said. "Not every teaching hospital will be affected, but many will. This could attract faculty away from their current roles, and there are other potential impacts, most notably economic. [Specialty hospitals] by-and-large do not take the complicated or indigent cases. And that burden falls back on the teaching hospital."
