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Health Policy Thought Leaders Call for Immediate Reversal of Physician-Led Hospital Ban; House and Senate Bills Introduced.

February 22, 2023

Washington, DC – Physician-Led Healthcare for America (PHA) applauds the bi-cameral introduction of the “Patient Access to Higher Quality Health Care Act of 2023.” In the House, H.R. 977 is sponsored by Congressman Michael Burgess, MD (R-TX) and 22 original co-sponsors. In the Senate, S. 470 is sponsored by Senator James Lankford (R-OK) and 13 original co-sponsors.

This bill would reverse Section 6001 of the Affordable Care Act, which arbitrarily bans new physician-led hospitals and places growth restraints on grandfathered hospitals.

The Congressional legislation complements a growing chorus of health policy thought leaders who are calling for a reversal of the ban on physician-led hospitals. In a new competition analysis paper, several of these thought leaders explain how this reversal would inject immediate competition into consolidated healthcare markets.

Acting in their personal capacity, attorneys from the U.S. Department of Justice’s Antitrust Division and the Federal Trade Commission’s Bureau of Competition and physicians from the Johns Hopkins University School of Medicine and the American Medical Association (AMA) assert in a new competition policy paper:

“For those in the U.S. health policy community concerned about consumer harms resulting from the growth of health system market power and the shrinking role of physicians in leading and designing patient care, our paper urges a reevaluation of the prohibition on new or expanded POHs. POHs present an opportunity to inject more competition into patient/consumer markets, U.S. payor markets, and markets for physician services. Competition in these markets is vital for reducing costs and improving quality. This not only benefits healthcare consumers—which eventually includes all of us, but also taxpayers providing publicly-financed health benefits that cover nearly one in two Americans. It also benefits physicians through increased competition for their services and greater opportunities for entrepreneurship and innovation in patient care.”

The paper, “Hospital Competition and Restrictions on Physician-Owned Hospitals,” references the explosive growth in hospital and physician practice mergers over the past few years:

“There were 1,412 hospital mergers from 1998 to 2015, with 561 occurring from 2010 to 2015. In 2010, 28 percent of primary physicians were employed by hospitals. By 2016, that number had risen to 44 percent. Large physician practices have been growing larger while smaller practices have been growing smaller. According to recent data, over 90% of metropolitan statistical areas have been estimated as consolidated for hospitals, 65% for specialist physicians, and 39% for primary care physicians.”

The authors – Matthew C. Mandelberg, JD, MPA; Michael H. Smith, JD; Brian J. Miller, MD, MPA, MPH; and Jesse M. Ehrenfeld, MD, MPH – cite a dearth of tools that policymakers have turned to for addressing the troubling consolidation trends, stating, “Few effective policy tools have been identified that might stall or reverse these trends.” The authors point to a reversal of the ban on physician-led hospitals as one solution to inject immediate competition.

“PHA applauds Senator Lankford, Congressman Burgess and the original co-sponsors for introducing legislation that would unleash patient access to high quality care led by physicians,” Frederic Liss, MD, PHA’s president, said. “Congress has had several years to analyze the troubling consolidation trends. Now is the time for Congress to move beyond analysis and act on behalf of our patients to inject hospital competition into our nation’s healthcare markets by removing the arbitrary ban on physician-led hospitals.”

Liss added:

“The existing ban on physician-led hospitals is nothing more than a measure pushed by corporate lobbyists to stifle competition from physicians. Medicare allows physician ownership across every other area of the healthcare spectrum, including ambulatory surgery centers, imaging and physical therapy, among many other instances. Medicare allows physician ownership in these cases due to its proven ability to increase efficiency and quality while curbing costs for patients. PHA commends the authors for going beyond simply recognizing concerns related to consolidation and offering a tangible solution that is immediately available: physician-led hospitals.”

Wall Street Journal Coverage

Click here to read “End ObamaCare’s Ban on Physician-Owned Hospitals,” a February 21, 2023, op-ed written by Senator Lankford and Dr. Miller.

About Physician-Led Healthcare for America

Founded in 2001, Physician-Led Healthcare for America serves as the stakeholder voice for physician-led hospitals and other physician-led entities that focus on the patient-physician relationship.

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