Opponents of specialty hospitals often portray the debate in black and white terms, as if healthcare quality and access to care are threatened anytime such a facility enters the marketplace. As chief executive officer of MedCath Corp., a national provider of cardiovascular services that builds and operates fully licensed acute-care hospitals, I can say that in the case of our company, nothing is further from the truth.
MedCath hospitals are not a burden but instead are valuable additional resources in the communities they serve. They provide vital cardiovascular care and open-heart surgical programs, additional intensive-care capacity and full-time emergency rooms. Our hospitals are owned in partnership with physicians and, in certain instances, community hospitals.
Many of the arguments made by hospital systems are nothing more than anticompetitive rhetoric and simply do not apply to MedCath. For example, many hospital systems claim they are being harmed by physician-owned specialty hospitals in their communities, yet none of them has provided any data to support this claim. Our data suggest that the infusion of competition improves quality of care across all providers.
Opponents also argue that specialty hospitals simply dump emergency cases onto community hospitals. Approximately 18.5% of MedCath hospital admissions over the past 12 months came from another hospital that did not have the capabilities to treat these patients. In addition, all MedCath facilities have full-service emergency departments, which treat all patients regardless of their illness or their ability to pay. Last year, our emergency departments treated more than 60,000 patients, two-thirds of whom were not cardiovascular patients, yet we only transferred out 1,316 patients. Our most common transfers were to provide specialized services such as trauma, burn or psychiatric care.
The Medicare Modernization Act of 2003 includes an 18-month moratorium on the ability of physicians to refer patients to specialty hospitals in which they have an ownership interest. During this moratorium, government agencies, including the Medicare Payment Advisory Commission and HHS, are studying the effects that physician-owned specialty hospitals have on our healthcare system. These agencies are examining the costs of specialty hospitals (and whether the Medicare payment system should be refined), referral patterns and quality of care. I believe that, ultimately, MedPAC's findings will affirm that some specialty hospitals-based upon their merits-make many positive contributions and have earned the right to continue to participate in our rich and diverse healthcare system. I also believe that Congress will agree with those findings and end the moratorium.
Part of the benefit of hospitals such as ours is to provide vigorous competition that benefits the communities we serve. In preliminary findings, MedPAC found that physician-owned specialty hospitals often serve as a wake-up call for the traditional hospitals to improve their services and quality. Furthermore, a recent report by the Federal Trade Commission and the U.S. Justice Department stated that a major infusion of competition would help ensure the survival of the nation's healthcare system.
MedCath hospitals provide such vigorous competition through the involvement of our physician partners in the governance and operations of our hospitals. The alignment of physicians and hospital administrators is a primary reason MedCath facilities have been able to improve the quality of care, reduce patients' length of stay, save Medicare and taxpayer dollars, and achieve higher levels of patient and physician satisfaction. With ownership and oversight roles in the facility, physicians are motivated to design and operate highly efficient care systems. In an industry where misalignment of goals and objectives is commonplace, MedCath finds success by bringing physicians and hospitals together, working to provide quality healthcare to all patients.
I have personally managed hospitals and integrated delivery systems in both the not-for-profit and the for-profit general acute-care sectors. The hospital model that MedCath has developed is the most innovative that I have seen in terms of physicians and hospitals working toward the common goal of quality healthcare in a cost-effective manner. In our industry, where costs are out of control and quality is inconsistent, it is bewildering to me that healthcare leaders would even consider inhibiting innovation that is proving to benefit patients at a reduced cost.
Two examples of such innovation are Baylor Health Care System in Dallas, which is one of the nation's most respected not-for-profit, faith-based systems, and Avera McKennan Hospital in Sioux Falls, S.D. Baylor is partnering with physicians who have ownership to provide high-quality healthcare services to their community. Avera McKennan, meanwhile, has partnered with MedCath and local physicians. These three groups opened the Heart Hospital of South Dakota in 2001 and it quickly became a successful hospital in the delivery of high-quality cardiovascular care. Contrary to critics' claims that such ventures hurt community hospitals, Avera McKennan used this strategic opportunity to redefine its delivery system and is now stronger than ever.
When all the facts are tallied, they show that physician-owned hospitals, and physician referrals to those hospitals, benefit thousands of patients every year. And in our world, helping patients is always the bottom line.
John Casey is chief executive officer of MedCath Corp., Charlotte, N.C.