Bill restricts specialty hospitals

The Wichita Eagle

March 06, 2008

Physician-owned hospitals are again on the defensive after the U.S. House of Representatives passed a bill late Wednesday that will cut off expansions and restrict investment.

The bill -- HR 1424 -- is part of a larger health care bill that requires benefits equity for mental health and substance-related disorders under group health plans, and prohibits genetic discrimination with respect to employer health insurance.

The Wichita region is home to five physician-owned hospitals: Galichia Heart Hospital, Kansas Spine Hospital, Kansas Heart Hospital, Kansas Medical Center in Andover, and Kansas Surgery and Recovery Center.

Two of those hospitals -- Galichia and Kansas Medical -- are listed as general hospitals and maintain emergency departments.

The proposed law will prohibit any of these hospitals from increasing the number of operating rooms or hospital beds from the date the law is enacted.

It also restricts physicians' hospital ownership, calling for an individual doctor to own no more than 2 percent, and limiting total physician ownership in an existing hospital to 40 percent.

The bill also seeks to eliminate conflicts of interest by mandating, among other things, the disclosure of ownership status to patients.

It requires hospitals to submit annual reports that detail the identity of each physician owner and any other owners of the hospital.

'We're not in favor of the language regarding physician-owned hospitals, and we think it's unfortunate that certain members of Congress have inserted special-interest language into otherwise legitimate bills,' said Malik Idbeis, a spokesman for CHA -- formerly Cardiovascular Hospitals of America -- a Wichita-based company that develops physician-owned general hospitals.

CHA owns a hospital system in Hawaii, plans to have another one open later this year in Louisville, Ky., and is developing a third in Louisiana, Idbeis said.

'The bottom line is such actions take away a patient's right to choose,' he said.

Critics have argued for years that doctors should not be allowed to have ownership in hospitals where they send their patients.

Among their complaints are that these hospitals take the best-paying, least-sick patients, leaving the bulk of charity care and the most-expensive patients to community hospitals.

But supporters say physician-owned hospitals offer more efficient care and that physicians formed them because they wanted better control over quality and patient outcomes.

Galichia chief executive Steve Harris said the bill was expected and that he and others will be fighting the provisions during House-Senate negotiations to determine the final bill.

'We're prepared to fight for the rights of our patients to have choice,' he said.

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