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News & Press: POH News

Administration Recommends Repealing POH Moratorium

Monday, December 3, 2018   (0 Comments)
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On December 3, 2018, the Department of Health and Human Services (HHS) released a report entitled, Reforming America's Healthcare System Through Choice and Competition. This report, developed by HHS in partnership with the Departments of the Treasury and Labor, the Federal Trade Commission, and the White House, outlines the impact of state and federal laws and regulations that limit choice and competition in the healthcare market and makes recommendations to improve the healthcare system for American patients. The report was prepared in response to President Trump's Executive Order 13813, which directed the Administration to work to reform the healthcare system to provide high-quality care at affordable prices by promoting choice and competition.

Included in these recommendations is a section on Physician-Owned Hospitals and the restrictions in the Affordable Care Act. The full text of this section is included below (beginning on page 73). The administration outlines the impact of Section 6001 on the development of planned hospitals, uncreated jobs, and limitations on the availability of care as a result of the moratorium. Recognizing that POHs provide high-quality and safe care to patients, especially when compared to general hospitals, the Administration formally recommended that Congress repeal Section 6001 of the ACA and remove the limits on physician-owned hospitals.

ACA Rules Restricting Physician-Owned Hospitals Reduce Competition

The ACA placed an effective moratorium on the opening and expansion of physician-owned hospitals. According to the Physician Hospitals of America, 37 planned hospitals have not been constructed, and over 30,000 planned healthcare jobs have gone uncreated because of these ACA restrictions on physician-owned hospitals. These restrictions, which were favored by the American Hospital Association, were included to address potential financial conflicts of interest with doctors referring patients to their own hospitals and concerns that physicians may be referring the healthiest patients to their own hospitals. Those concerns may have been overstated, considering that many studies suggest physician-owned hospitals provide higher-quality care and that patients benefit when traditional hospitals have greater competition.

Physician-owned hospitals, furthermore, have been shown to provide patients with high-quality care. According to a study published by the Journal of the American College of Surgeons, physician-owned surgical hospitals outperform other hospitals in the Medicare value-based purchasing program. More than 40 percent of physician-owned hospitals received the top 5-star rating in a 2015 release by the Centers for Medicare and Medicaid Services (CMS), compared to only 5 percent of general hospitals. Further, patients are 3-to-5 times less likely to experience complications at a physician-owned specialty hospital than at a general hospital.

Recommendations: Replace Restrictions on Physician-Owned Hospitals

Congress should consider repealing the ACA changes to physician self-referral law that limited physician-owned hospitals

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