With a new name and a federal moratorium off their backs, members of Physician Hospitals of America are positioning themselves to establish a permanent place for physician-owned hospitals in the nation’s healthcare system. Now they need strong leadership to make it happen.
This was the general message among speakers, panelists, board members and participants at the association’s annual meeting in Newport Beach, Calif., in November. Formerly known as the American Surgical Hospital Association, the group has changed its name to emphasize its support of for-profit hospitals with physician owners.
Attendees described the meeting’s mood as "upbeat" now that the moratorium on construction of new physician-owned hospitals has been lifted. This was reflected in the meeting’s attendance, which increased to 319 participants compared with 197 attendees the previous year.
"I think doctors feel more free to go forward with these plans whether they go solo or in partnership with community hospitals," says Joan Lapham, chief executive officer at Sierra Surgery Hospital in Carson City, Nev. Lapham says colleagues described 2005’s meeting as depressing because of the moratorium, but that at the 2006 meeting, there was a sense of cohesion among group members who discussed similar issues.
Randy Fenninger, the association’s lobbyist, says now that the moratorium fight—which began with the Medicare Modernization Act of 2003—has ended, members need to expand fundraising efforts and become more politically engaged at both the local and federal levels.
"We need a broader base in Congress, no matter who is in charge," Fenninger said, just days before Democrats won control of both the House and Senate.
To promote physician-owned hospitals, members should maintain connections with current supporters, but also cultivate relationships with members of their local planning and zoning commissions, county boards, state assemblies and state senate, Fenninger says. In one session, he equipped attendees with copies of news articles and federal reports from the Medicare Payment Advisory Commission and the CMS for members to use when discussing specialty hospitals with their local leaders. The August 2006 MedPAC report found that "while the specialty hospitals took profitable surgical patients from the competitor community hospitals (slowing Medicare revenue growth at some hospitals), most competitor community hospitals appeared to compensate for this lost revenue." Summaries like these can carry weight with local officials because they come from the federal government, Fenninger says.
Participants also heard from Scott Becker, an attorney with McGuire Woods in Chicago and the PHA’s legal counsel. Becker likens the past five years of the specialty hospital movement to World War I, and says the current phase is World War II. Among the reasons why this is a "concerning time" for specialty hospitals is that the segment still needs a broad base of support, Becker says.
"Our concentration is limited to 10 to 15 states," Becker told attendees. "If a representative wants to hurt you and he’s in a state without a doctor-owned hospital, he can do it without consequences," he said, adding that the battle is for the middle because the group already has "great friends" from the right side of the political aisle.
The meeting also included presentations on how to establish joint ventures with community hospitals, how to convert from a surgery center to a physician-owned hospital, and how to recruit and retain physicians.
But the need for strong leaders was the message repeated in sessions, panel discussions and receptions throughout the weekend. James Colgan , a PHA board member and a urologist at Sierra Surgery Hospital (where he also serves as a board member) says he would like to see the association expand its membership, increase the number of physicians serving on its board, and encourage young physicians to become involved in the group’s purpose.
"Physicians need to take a leadership position," Colgan says. "The message needs to be passed from doctor to doctor."