Hospitals Duel Over ER Care In Arkansas

by Mark Friedman  on Monday, Mar. 24, 2008 12:00 am  

Lynn Weaks, CEO of Arkansas Surgical Hospital, said the hospital meets all the regulatory requirements by having registered nurses on-site 24 hours a day, and doctors are on call if they're not at the hospital.

Ort said the Highway Department determined that the Surgical Hospital didn't meet that requirement.

Cherry-Picking Alleged

The AHA's main concern with the physician-owned specialty hospitals is that they get the best patients - the high-paying, well-insured surgical patients - without having to take in any of the 47 million uninsured Americans for whom the hospital emergency room is the primary safety net for medical care.

Federal law requires that any patient who enters an emergency room must receive initial care and be stabilized before leaving, regardless of his ability to pay. "But if you don't have an emergency department, that law doesn't apply," the hospital association's Pryga said. "And if you have an emergency department with one bed and no staff  then it isn't a portal for those patients to come through."

But Jason A. Spring, CEO of HealthPark Hospital in Hot Springs, a physician-owned specialty hospital, said the AHA was really trying to reduce competition for the full-service community hospitals that are its members.

Community hospitals "have devoted a great deal of time and money to destroying our industry," Spring said in an e-mail statement to Arkansas Business. "This is an ongoing battle between competition in the marketplace and the traditional hospital model. After numerous studies that suggest we are a business model that provides efficient, safe care to patients, they continue to work to eliminate us."

Congress has been trying to curb the expansion of physician-owned specialty hospitals for years. The House of Representatives passed a bill last year that said that if any doctor owns more than 2 percent of a hospital or if doctors own more than 40 percent of the hospital, it wouldn't qualify for Medicare payments, Rep. Pete Stark, D-Calif., said last week.

The House bill is in the Senate and might be voted on this year, he said.

History of Bad Blood

Between 2002 and 2004, the number of specialty hospitals nationwide jumped from 46 to 89, according to the American Hospital Association.

To curb the growth, in 2003 Congress approved a moratorium on Medicare payments to new physician-owned specialty hospitals. When that moratorium expired in June 2005, Congress prohibited the Centers for Medicare & Medicaid Services from approving new specialty hospitals until 2006.

The American Hospital Association has maintained that the physician-owned specialty hospitals are not more efficient and provide no better care than community hospitals. The AHA also claimed doctors who invest in specialty hospitals steered the better-paying patients and those with fewer complications to their hospitals while the sicker ones ended up at the community hospitals, often with no way to pay their bills.

On the other side of the debate, the American Medical Association - which represents doctors - insists that the specialty hospitals are good for health care. 

"They have lower infection rates, fewer medical errors, shorter turnover times, and increased cost efficiencies," according to a 2006 letter Dr. Michael Maves, executive vice president and CEO of the AMA, wrote to the Centers for Medicare & Medicaid Services. "Moreover, specialty hospitals encourage competition between and among health facilities, which has led to the delivery of higher quality, more efficient, and innovative health care in the communities where they are located."

Maves also pointed to a Medicare Payment Advisory Commission report that found no conclusive information indicating financial harm to community hospitals resulting from specialty hospitals.



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