Law supports physician-owned hospitals

A Texas Congressman is trying to encourage the growth of physician-owned hospitals. Sam Johnson, R-Texas, recently introduced a bill into the U.S. House of Representatives to repeal portions of the Affordable Care Act and the Health Care and Education Reconciliation Act of 2010, which ban self-referrals to patients to new physician-owned hospitals.

“I’m sure we also agree that competition in the marketplace is a good thing. … It makes no sense to prohibit good hospitals from serving their communities. This bill is about doing the right thing. Americans want, need and deserve quality, affordable health care options," Rep. Johnson said in a statement.

The AMA supports the bill, stating that physician-owned hospitals have been rated under the Hospital Value-Based Purchasing Program as offering higher levels of quality care and patient satisfaction. 

"Your bill would level the playing field, allowing physician-owned hospitals to remain competitive, continue their solid record of providing the highest quality health care to patients, and contribute significantly to the communities they serve," AMA President James Madara, MD, wrote in a letter of support to Johnson.

The American Hospital Association and Federation of American Hospitals, on the other hand, are against the bill.

"For more than 15 years, community hospitals, policymakers, the business community and governmental advisory bodies have grappled with overutilization and higher health care costs caused by self-referral to physician-owned hospitals. Conflicts of interest are inherent in these arrangements, whereby physicians refer their patients to hospitals in which they have an ownership interest," states a joint letter from the organizations.