With physician ownership of hospitals continuing as a divisive issue in the industry, the influential Medicare Payment Advisory Commission is looking at approaches to bring physicians and hospitals closer together.
At one of its scheduled meetings last week, MedPAC commissioners looked at the different ways doctors and hospitals both compete and collaborate, and the ways the sometimes tempestuous relationship between the two might be hurting the quality of the nations healthcare.
The healthcare delivery for Medicare patients has become too fragmented, and were interested in looking at ways to encourage better collaboration between providers, said MedPAC Chairman Glenn Hackbarth. In this area, physician and hospital relationships are of particular interest, he said.
MedPAC, which advises Congress on Medicare, had commissioned a report from its researchers that picked apart the doctor-hospital relationship.
But it was measures that physicians have taken to compete against hospitalsand their reasons for doing sothat dominated an initial conversation on the issue at the MedPAC meeting last week.
Ambulatory surgery centers and physician-owned specialty hospitals are more competitive venues physicians have taken to improve their own personal productivity, the researchers stated. Rapid growth has taken place in these types of facilities, despite moratoriums issued against building specialty hospitals several years ago, said MedPAC senior analyst Jeff Stensland.
Specialty hospitals have been widely criticized for cherry-picking healthier patients, and for being able to refer patients to a hospital in which they have ownership. Some of the physicians on the commission said, however, that physicians have their reasons for entering into these types of ownership agreements.
Ron Castellanos, a urologist from Fort Myers, Fla., noted that in the areas of ownership, there isnt a level playing field. Its interesting that hospitals can own physicians, but that physicians cant own hospitals, he said.
Physicians who have ownership in an ASC or specialty hospital believe they have more ability to control quality and patient flow, and deliver care at higher quality and lower cost, said commission member Nicholas Wolter, chief executive officer of the Billings (Mont.) Clinic. Some, however, worry that ownership can represent a self-referral conflict of interest and drives utilization rates higher.
Don May, vice president for policy with the American Hospital Association, who attended the meeting, spoke on that concern. The AHA has never been opposed to physician ownership of hospitals. Its the fact that these physicians can refer patients to their own hospitals that poses a conflict of interest, he said. (See Special Report, p. 28.)
Conversely, Castellanos said he was concerned with a practice that hospitals use known as exclusive credentialing, where a hospital will credential a physician but forbid that physician from using any other hospital or laboratory. I think thats a restraint of trade, and we should consider addressing that, he said.
There are myriad ways that hospitals are working together, MedPAC researchers said, but no clear way to manage them as a whole.
Francis Jay Crosson, a physician with the Permanente Federation in Oakland, Calif., noted that the issue of governance and management between hospitals and physicians needed to be improved. We dont want to create a world of physicians being in a subservient relationship with the hospital, he said. The problem is we dont have a successful model of what would work.
The MedPAC researchers identified a number of ways that the two groups do work together. Collaborative relationships identified include gain-sharing, hospitals hiring hospitalists, and comanagement arrangements, where hospitals and physicians form a limited liability company that pays the physicians a salary for performing certain clinical tasks.
The effects of these collaborations remain uncertain. While the hiring of hospitalists has been shown to improve access to care, and increase adoption of information technology and practice guidelines, the effects theyve had on volume, cost and quality have been mixed, said MedPAC senior analyst Anne Mutti. A hospitalist is more likely to be cost-effective if theyre paid a salary with incentives, Mutti said.
In other business, commissioners responded to research that offered some ways to address payment inaccuracies in hospital outpatient payments. The AHAs May said that MedPAC was trying to assess whether these inaccuracies were causing a bias in the system that might help or hurt different types of care and different types of hospitals. (Outpatient providers last week were presented with a new set of Medicare quality guidelines. See story below.)
There are two types of payment inaccuracies in outpatient payments, those found in complex services that have a higher profit margin than basic serviceswhich favors hospitals providing complex servicesand those regarding economies of scale in outpatient departments, said MedPAC senior analyst Daniel Zabinski.
The hospital outpatient payment system does not adjust payments for volume, which creates a disadvantage for isolated, low-volume hospitals, particularly rural hospitals, Zabinski said.