Physician-Owned Hospitals: The Big Winners Under PPACA's Quality Programs

Although the Patient Protection and Affordable Care Act prohibited new construction or expansion of physician-owned hospitals, these facilities are emerging as some of the biggest winners under two provisions of the healthcare reform law, according to a Kaiser Health News report.

There are more than 260 physician-owned hospitals throughout 33 states, with high concentrations in Texas, Louisiana, Oklahoma, California and Kansas, according to data from Physician Hospitals of America. Analysis have suggested POHs have done very well under the PPACA's value-based purchasing program and are also less likely to face penalties for high readmission rates.

A Kaiser Health News analysis found that of the 161 POHs eligible for the PPACA's quality programs, 122 are receiving extra money while 39 are losing funds, according to the report. That's a significant difference from other hospitals' standings, as 74 percent of other hospitals are being penalized under the quality programs, according to the report.  

The analysis also found Medicare is paying the average POH bonuses of 0.21 percent more for each elderly patient during the fiscal year ending Sept. 30. On the other hand, the average hospital not run by physicians is losing 0.30 percent per Medicare patient.

Furthermore, POHs made up nine out of 10 hospitals to receive the largest bonuses in the fiscal year that began in October 2012.

It's unclear how many POHs will qualify for inclusion in the health law's quality programs. Most were eligible to participate in the value-based program this year, but two-thirds or more of the physician-owned hospitals probably will not qualify for inclusion in the next fiscal year, which begins in October, according to the report. That's because they may not have enough cases to have their mortality rates evaluated, which is a mandatory part of the program.

In the report, some POH-owners say their control over where money goes in the hospital, such as toward patient amenities, enhance the patient experience and result in higher satisfaction scores. Other owners say a fixation on quality, and physicians' pride in owning the facility, has resulted in higher quality scores. But one economist in the report said POHs should have been excluded from value-based purchasing due to what she says are patterns of patient cherry-picking.

More Articles on POHs:

56 Physician-Owned Hospitals to Know
Physician-Owned Hospital Finances: Q&A With Ben Dunford, CFO of Texas Regional Medical Center at Sunnyvale
4 Best Ideas for Improving Physician-Owned Hospital Profits

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