Author + information
- Alfred A. Bove, MD, PhD, FACC, ACC President⁎
- ↵⁎Address correspondence to:
Alfred A. Bove, MD, PhD, FACC, American College of Cardiology, 2400 N Street NW, Washington, DC 20037
The topic of physician-owned hospitals is one of the popular items in the health care reform debate currently underway. Congress and others in government recognize this relationship as problematic because it raises an apparent conflict of interest. The concern is if physicians refer patients to their own hospitals when the admission is not indicated, or when a test or procedure is not indicated other than for the need to support the finances of the hospital. Because of this concern (whether the problem is real or imagined is not clear), the current proposed legislation contains provisions to prevent physicians from having significant ownership interest in hospitals. Existing relationships will be grandfathered, but new endeavors will be prohibited. Private, nonphysician ownership will be allowed on the theory that the nonphysician owners will not influence referrals to their private hospital. Somewhere in the discussion the hospital lobby also has something to say about ownership. My personal observation is that hospital managers are intensely driven by volume while we, the physicians, are trying to move away from volume-based reimbursement and toward a quality- and outcomes-based reimbursement system. There are numerous examples of nonphysician hospital executives providing financial incentives to physicians for admitting patients to their hospital. Some are legal (teaching stipends), and some are not (free rent in hospital-owned buildings). Even with teaching stipends, care is needed to be sure that the stipends are just right and not excessive for fear of provoking a Stark regulation response.
The American College of Cardiology is opposed to prohibitions on physician-owned hospitals. We think that physicians can exercise proper professionalism if they wish to invest in a medical care facility (imaging equipment and surgicenters also count in this game). One solution is to require full transparency. Ownership must be declared, and alternate resources must be revealed. Some provisions would allow physician ownership as long as full disclosure and alternate sources for care are provided. Another solution is use of appropriate use criteria to be sure tests and therapies are not being overused. We feel that these measures would create an acceptable middle ground that would allow physicians ownership, but prevent conflict of interest.
On a broader scale, however, is the right to own private property. This right is a fundamental principle of a democratic society. Private property ownership is a protected right, and we can expect in our society to be able to own a business or property without fear of it being taken by government or hostile acts. Indeed, our justice and security systems vigorously protect this right. So it is acceptable to refer your friends, neighbors, and professional colleagues (and patients) to your physician-owned restaurant or landscaping service, but not to your physician-owned hospital, imaging center, or rehab center. I would not separate medical services from other services. If you own a restaurant and discuss it with a patient, the patient needs to know that you own the restaurant and that he or she can find good food at other restaurants. With full transparency, it is quite reasonable to offer your services to a patient as long as he or she understands the relationship and the alternatives.
Another consequence of the current health care reform debate is the clear interest in reducing specialty care and moving toward a primary care model in the U.S. The relentless reduction in reimbursement is causing specialty practices (cardiology and oncology particularly are targeted) to disband and the physicians to seek employment as full-time paid staff of a hospital. Some lucky practices manage to sell the practice to a hospital, while others just disintegrate, and individual physicians find employment in a hospital-based system (or in industry). This trend seems to be increasing due to the significant reductions in reimbursement that are proposed in the ongoing relative value unit reviews (so far echocardiography and nuclear imaging have been “adjusted,” and catheterization is next), the reform bill, and the Centers for Medicare and Medicaid Services rules.
Government officials are quick to quote the performance of large integrated health systems like Mayo, Geisinger, and Kaiser-Permanente, and suggest that all physicians would do better as employees of an integrated health network. Salaries, they theorize, would eliminate incentives to overuse therapies and procedures, and cost would go down. Note, however, that many urban academic health systems also have full-time medical staff, but costs are not as low as the aforementioned systems; so, there are other factors (socioeconomic, payor mix, cost of living, rent, and so on) at play that will continue to create differences in cost among various integrated health systems. Accountable Care Organizations are one method by which groups of private physicians can form physician-managed entities that incorporate quality and outcome into reimbursement. These are being considered in the health care reform legislation.
At our legislative conference this September, we heard about a full-time hospital-employed cardiologist who was prohibited by his hospital administration from participating in the legislative conference because of concern about conflict of interest. We also are aware of systems that set quotas for volume, such as catheterization volume, that are not cognizant of the trend toward more noninterventional therapies for chronic coronary artery disease that have resulted in a nationwide reduction in catheterization and surgical volume. I call this the “Excel” management method in which the hospital budget is modeled in a spreadsheet, and volume numbers are modified until the bottom line turns from red to black—no matter that the required number of admissions exceeds the population of the surrounding county. A physician employed by a health system is bound to follow the rules and directives of his or her employer, even if the goals are misaligned with nationwide efforts to improve patient care.
If our health care system moves to a point at which it is impossible to run a private cardiology practice profitably due to overwhelming reimbursement reductions, many more physicians will be driven into a full-time hospital employee model. Perhaps this provides an opportunity to make the employment experience fruitful, the hospital successful, the care better, and the institution profitable. This might best be accomplished if the physicians took an active and principal role in managing the hospital, health system, and practices. One characteristic of the successful health systems noted above is that all 3 have significant physician management input into strategic and operational decisions and goals.
The lesson to be learned from the successful integrated health systems is the same lesson that is coming from the successful physician-owned hospitals: Outcomes are above the national average in many of the quality measures when physicians are involved in health system management.It seems as though the indicator for quality performance is the participation of physicians in the operation of the hospital or health system. Perhaps nonphysician managers do not quite understand patient care the way physicians do.
But haven't we known that all along?
- American College of Cardiology Foundation