The Obama administration says it's identified hospitals that provide patients with the most value under a new ObamaCare bonus program. Unfortunately, the sweeping health law also makes it very hard for such facilities to expand or new ones to be built. Unfortunately, they turn out to be the very same facilities that the sweeping health care law tries to block from expanding.
ObamaCare has impeded the expansion of the hospitals that may provide patients with the most value according to the results of an ObamaCare bonus program.
The law's Hospital Value Based Purchasing program rewards hospitals that meet certain quality standards with a small percentage increase in their Medicare payments. Those that fall short face small Medicare payment percentage cuts.
The standards include "process measures," such as the percentage of patients receiving an antibiotic within an hour of surgery, and patient satisfaction measures, including how well a doctor communicates with a patient.
Nine of the top 10 hospitals in the first round of HVBP were physician-owned. Indeed, doctor-owned hospitals accounted for 48 of the 100 top spots, according to data from the Centers for Medicare and Medicaid Services. More than 3,400 hospitals were included in the program.
Treasure Valley Hospital got the top bonus, a 0.83% increase in its Medicare payments. The Boise, Idaho, physician-owned hospital offers an array of surgical services.
Most physician-owned hospitals tend to specialize in one field, such as cardiac or orthopedic surgery.
Physician-owned hospitals did so well because they "have more focus on patients and patient care. They put more money at the bedside," said Paul Kerens, president of Physician Hospitals of America. "Unlike major hospitals, we don't have as many bureaucratic layers to go through to get quality to the patient bedside.
Nancy Foster, vice-president for safety and patient quality at the American Hospital Association, said, "The measures are dominated by heart care and orthopedic care, which is where physician-owned hospitals are likely to excel. Additionally, hospitals that are new and smaller do better on the (patient satisfaction) measures and those differences make it more challenging for general, acute-care hospitals to score well.
While ObamaCare highlights and rewards physician-owned hospitals for their high patient value, the law also effectively bars any more from ever being built. Provisions withhold Medicare funds from any physician-owned hospital built after 2010.
That was a big victory for traditional hospitals, which claim their physician-owned rivals don't take as many low-paying Medicaid patients and thus are unfair competition. For years the AHA and the Federation of American Hospitals lobbied Congress to stop the expansion of physician-owned hospitals.
ObamaCare also put regulatory hurdles in the way of existing physician-owned hospitals that want to expand. The owners must first apply to the federal Department of Health and Human Services. They can do so only once every two years.
They must then wait while members of the community provide input. Further, the physician-owned hospital must be in a county where population growth is 150% of the overall state's growth in the last five years. Inpatient admissions to the physician-owned hospital must be equal to or greater than the average of such admissions in all hospitals located in the county. Its bed occupancy rate must be greater than the state average. And it must be located in a state where hospital bed capacity is less than the national average.
Even if the physician-owned hospital meets all of those conditions, it is prohibited from expanding more than 200%.
To Mark Galliart, CEO of McBride Orthopedic Hospital in Oklahoma City, the government is working at cross-purposes.
"If the government wants value, why won't they let us expand?
McBride received a Medicare payment bonus of 0.65%, ranking it No. 28 on the HVBP.