Senate Finance Committee to Make Mess of Health Care #1

Senators Chuck Grassley and Max Baucus lead the Senate Finance Committee. They met last week to consider health care reform. A quick review of options indicated health care deform is on the way. I will tackle key elements of their plan in a series of posts. The first one is physician ownership of health care facilities (page 27 of the document Transforming the Health Care Delivery System: Proposals to Improve Patient Care and Reduce Health Care Costs.)

The plan purports to cut out physician self-referrals, then backs up a huge loophole for existing physician owned hospitals to drive through. All that's needed is a Medicare Provider agreement to be in effect July 1, 2009 and any physician owned hospital can continue self-referring.

The document listed a series of safeguards. They include reporting and disclosure requirements. Upon enactment of the law, physician ownership cannot change. Nor can the hospital expand services without the approval of the Secretary of Health & Human Services.

Corporate owned hospitals may or may not allow physician ownership. Rick Scott's Columbia/HCA incentivized physicians through local hospital ownership. That and his other pay for performance programs resulted in fraudulent billing, which cost the firm $1.7 billion in fines. HCA dismantled its physician ownership arrangements.

Today's physician owned hospitals are often specialty related, cardiac, cancer or orthopedic care. Who is Congress helping by grandfathering? It's not to aid nonprofit community hospitals. They don't benefit when specialists cherry pick admissions to optimize their investment.

It's a fluff change, with no real impact the first few years. It continues physician owned (PO) hospital corporafornication. But it does set up a bureaucracy with real growth constraints over time for PO hospitals. They can't add beds or operating rooms without meeting certain criteria and need the approval of the Secretary of Health & Human Services. Will HHS central planning cause PO facilities to sell out to their for-profit brethren over time?

In a particularly Bush like move, the document said, "There shall be no administrative or judicial review of this process." Health care deform and the Unitary Executive roar onward. Expected implementation date is January 1, 2010.