Controversy over Doctor-Owned Hospitals: Alive and Well in Health Reform Debate

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September 3, 2009

I've been meaning to write about a great Aug. 9 Denver Post article I read while on a trip to that city.

Reporter Karen Augé examined the controversial health policy issues surrounding doctor-owned hospitals in the wake of a death of a young woman at Colorado Orthopaedic and Surgical Hospital.

Here's how she opens the story:

It is barely 10 months old, but already Colorado Orthopaedic and Surgical Hospital has made a name for itself, all the way to Washington, D.C.

Just not in a good way.

Since a young woman died there after a medication error, the doctor-owned hospital has become the target of unprecedented sanctions by the state health department and a poster child for what some see as inherent problems with doctor-owned hospitals. It also has inflamed a debate over whether those hospitals should have a place in the nation's medical landscape.

State health officials in early July ordered the hospital to stop performing surgeries but allowed it to resume surgeries in late August.

Auge does a good job of unpacking the controversy over doctor-owned hospitals, spelling out the arguments for (specialized in certain surgeries, ostensibly improving quality) and against (such hospitals cherry-pick lucrative patients and drive up health costs.)

This debate has been going on for years. (Here's a good overview.) There has been a federal moratorium on new construction of these hospitals. When the federal SCHIP program was expanded and renewed earlier in 2009, however, it did not include previously proposed curbs on expansion of doctor-owned hospitals. That's no lasting victory for the hospitals' lobbying group, however, as other restrictions are currently being tossed around by federal lawmakers involved in health care reform.

Atul Gawande touches on the complexity of the doctor-owned hospital policy debate in his recent examination of health care costs in the New Yorker, noting that while an aggressively-marketed, doctor-owned hospital in one Texas community seemed to foster higher health-care costs, its relatively small patient base could not account for that community's surprisingly high overall cost of care. Kevin Sack of the New York Times also wrote about that Texas hospital's political donations and their impact.

One way to explore and localize national health reform in your community is to look at any doctor-owned hospitals in your community. Check out Gawande's article for ideas on how to examine their costs relative to other hospitals'. And consider examining their political donations, too.

As always in health care reporting and all journalism: Follow the money.

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