Thursday, March 25, 2010

ObamaCare will effectively bar new physician-owned hospitals

When I was a child, I was often told by my parents and teachers that I could be anything I wanted when I grew up, and I believed them.  Thanks to our new health care reform law, that is no longer true.  Today's youth cannot grow up to be a doctor that owns a hospital in the United States of AmericaInvestor's Business Daily explains:


Because of the new health care law, Dr. John Dietz has an empty building that he's not sure what he's going to do with.

Dietz is part owner of the Indiana Orthopedic Hospital.

"It is an expansion of our hospital that is three-quarters finished; it had three operating rooms for outpatient surgery," he said. "Now it can't be used for that purpose. We'll have to figure out an alternative for it."

Dietz and his fellow investors put $27 million into that new building.

Under the new law there are a host of bureaucratic hoops that physician-owned hospitals must go through to expand.

• The hospital must apply to the Department of Health and Human Services and can do so only once every two years.

• It must then wait for a period for members of the community to provide input.

• It must be in a county where population growth is 150% of the population growth of the state in the last five years.

• Inpatient admissions must be equal to or greater than the average of such admissions in all hospitals located in the county.

• Its bed occupancy rate must be greater than the state average.

• It must be located in a state where hospital bed capacity is less than the national average.

• Once a hospital meets all of those conditions, it is prohibited from expanding more than 200%.

And they are the lucky ones. There are currently 60 to 65 physician-owned hospitals under construction. Those that aren't finished and don't have a Medicare provider number by Aug. 1 (Dec. 31 if the reconciliation bill passes) will probably never open their doors. Without a provider number, such hospitals can't treat Medicare patients, which are usually essential to financial survival. (emphasis added)
It doesn't take a rocket scientist to figure out what lobbyists wrote this incoherent part of the 2,409 page monstrosity.  On the day after the House passed the bill, traditional hospital company stocks soared.  From The Miami Herald:
Hospital operators posted some of the day's biggest gains, on expectations that the legislation's requirements would mean more patients. Tenet Health rose 52 cents, or 9 percent, to $6.27; Health Management Associates shot up 92 cents, or 11.3 percent, to $9.05; LifePoint Hospitals, which owns mostly nonurban hospitals in the South and West, rallied $2.07, or 5.8 percent, to $37.91.
These companies have given back some of Monday's initial gains on profit taking, but the implication is clear.  Corporate hospitals will not have competition from doctor-owned hospitals in the future.  It's reminiscent of the way many successful General Motors and Chrysler dealers were summarily dispatched after the government takeover of those once-great companies.

Another thing is becoming crystal clear.  The winners and losers in business in the future will not be decided by performance and the free markets.  They will be hand-picked by federal government bureaucrats.

1 comment:

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