Hospital Groups to Congress: Maintain Ban on Self-Referral to Physician-Owned Facilities

The American Hospital Association (AHA) and the Federation of American Hospitals (FAH) sent a joint letter to Congress urging them to oppose any legislation that would repeal current law limiting self-referral to physician-owned hospitals.

To prove the point, AHA and FAH highlighted the recent analysis of the health care economics consulting firm Dobson DaVanvo. The firm compared the performance of non-physician owned full-service community hospitals with physician-owned hospitals identified on the Physician Hospitals of American public facing website.

Among the findings, physician-owned hospitals:

  • cherry-pick patients by avoiding Medicaid and uninsured patients;
  • treat fewer medically complex patients;
  • enjoy all-payer margins nearly three times those of non-physician owned hospitals;
  • provide few emergency services – an important community benefit;
  • and are penalized for unnecessary readmissions at 10 times the rate of non-physician owned hospitals.

The empirical record is clear that these conflict-of-interest arrangements of hospital ownership and self-referral by physicians result in cherry-picking of the healthiest and wealthiest patients, excessive utilization of care, and patient safety concerns, wrote AHA and FAH.

The letter to Congress concludes, The law as it stands protects patients, businesses and taxpayers. It also helps ensure that full-service hospitals can continue to meet their mission to provide quality care to all the patients in their communities. We urge you to oppose any and all attempts to weaken it.