Bacon’s latest column in the Washington Times:
An Associated Press story sparked a small furor recently when it reported that the Obama administration’s ban on deep-water drilling would cost an estimated 23,000 jobs. With unemployment stuck near 10 percent, consternation over the avoidable job destruction was understandable.
But that’s hardly the only example of how Mr. Obama’s policies are devastating the economy. A little-noticed provision of the Affordable Care Act will wipe out an estimated 25,000 jobs that physician-owned hospitals were expecting to create within the next year or so. To keep the big hospitals on the sidelines of the health care debate, the authors of Obamacare cut a deal that effectively blocks physicians from building or expanding their own specialty hospitals – spiking 39 projects that were on the drawing board before the law was enacted.
The job-killing provisions of Obamacare are particularly ironic given that physician-owned facilities tend to be economically efficient and deliver superior medical outcomes. Stated goals of Obamacare are to tame in-hospital infections, reduce medical complications and cut readmission rates – metrics in which many physician-owned hospitals excel. But health care “reform” hamstrings the tightly focused physician-owned surgery centers while protecting generalist community hospitals with more political clout.
The larger hospitals have long nursed a grudge against the nation’s 265 doctor-owned hospitals. Accusing physicians of “skimming the cream” of the most profitable patients and referring patients to their own facilities, a supposed conflict of interest, the big-hospital lobby has pushed for years to restrict the ability of doctor-owned hospitals to compete. The restrictive proposals made little progress during the George W. Bush years, but tumultuous debate over health care reform put them back into play.
Obamacare architect Sen. Max Baucus, Montana Democrat, proposed to pay for Obamacare’s massive expansion of entitlements in part by imposing a 20 percent cut in Medicare fees for hospital services over the decade. Understandably, the American Hospital Association and the Federation of American Hospitals protested the arbitrary nature of the cost savings. So, the Baucus caucus threw the big hospitals a bone – the crackdown on physician-owned hospitals – in exchange for putting a muzzle on their opposition. Neutralizing the hospital lobby was crucial for the law’s passage. Read more.
Bacon’s Rebellion angle: Fortunately for Virginia, none of the canceled physician-owned hospital projects are located here in the Old Dominion. That’s because there are so very few POHs here. Why is that? Because Virginia has the Certificate of Public Need (COPN) process by which the general hospitals can block the creation and/or expansion of POHs.
Virginia hospitals justify the anti-competitive COPN on the grounds that physician-owned hospitals “skim the cream,” mostly treating patients with better-paying private insurance and forcing general hospitals to treat money-losing Medicaid patients and those with no insurance at all.
That argument bears revisiting. The Physician Hospitals of America contend that POHs have comparable Medicare/Medicaid patient mixes to many general hospitals and that they do provide some uncompensated care as well. Obama’s insurance reforms should bring about a large reduction in uncompensated care. If the uninsured population drops by 2/3 or so, as is predicted, the number of patients without any means to pay for their medical care is greatly diminished. In that case, general hospitals need no special protections from competing doctors’ hospitals.
It will be interesting to see if Gov. Bob McDonnell’s health care council takes up this issue — or just buries it.
