Q: Why are more than a quarter of physician-owned hospitals in the United States in Texas? You have mentioned that this has something to do with the absence of CON laws in the state. Are there other reasons?
Bobby Hillert: This may sound like too simple an answer, but the State of Texas and the private sector in this state encourage an entrepreneurial spirit in every industry. Our state government correctly recognizes that unnecessary red tape can stifle innovation. And even natural competitors within an industry have been known to accept each other in the Texas marketplace. Unlike in other states, several non-profit health systems in Texas have decided to embrace the innovations produced by the physician hospital model, instead of fighting it. Like many of the other innovations that have thrived here, physician-owned hospitals have excelled in Texas.
Q: Patient satisfaction data from Hospital Compare, CMS’ rating system for hospitals, show that physician-owned hospitals did markedly better than other hospitals in Texas. Why do you think that is?
BH: Healthcare is like any industry in that you have to offer a unique product in order to differentiate yourself from the competition. In this case, thousands of Texas physicians recognized a void in the healthcare delivery system and filled it by creating a model that places an emphasis on the patient experience and incredible outcomes. For a patient, having surgery and spending time in the hospital is one of the most intense and frightening experiences that anyone can have. Every hospital should strive to make the patient experience as positive as possible. The CMS data is proof that physician-owned hospitals are putting the patient first. Otherwise, patients could go elsewhere.
It’s important to note that the incredible Hospital Compare results for physician-owned hospitals don’t stop with patient satisfaction data. The Heart Hospital of Austin ranked first in the nation among all hospitals in Hospital Compare’s measure for the percentage of patients who survived a heart attack. And the Baylor Heart & Vascular Hospital in Dallas had the nation’s lowest readmission rate for heart patients in the same survey. That’s just a small sample of the outstanding results.
Q: What kinds of hospitals do you represent?
BH: We are very proud of our hospitals that focus on a certain specialty, but there are other kinds of physician-owned hospitals in our group. We also represent a children’s hospital, joint-venture hospitals with non-profit systems, rehabilitation hospitals and psychiatric hospitals. I need to clarify that all physician-owned hospitals in Texas, with the exception of the children’s hospital, are licensed as a “general hospital.”
Q: You have talked about the importance of the patient-physician partnership at physician-owned hospitals. Can you explain that?
BH: Physician-owned hospitals are successful because physicians, in their roles as caregivers and management, are involved in every aspect of the hospital’s operations. Physicians use their direct experience with patients to help form each management decision and make sure that it results in better outcomes and higher patient satisfaction.
Q: What impact do physician-owned hospitals have on the communities they serve?
BH: St. Joseph Medical Center in Houston is a great example. Several years ago, the city’s oldest hospital faced an uncertain future. A group of physicians stepped up and put together the financing necessary to save the hospital. Today, it plays a critical role in providing healthcare in the downtown area. This is just one case in Texas in which physicians have stepped up to provide a very important service to a community.
Several of the largest non-profit health systems in Texas decided to team up with physicians and create joint-venture models. These models, in which the parent system owns 51 percent and the physicians have a 49 percent share, have the same charity care requirements as the parent health system and pay very important taxes that go back into the community.
A study conducted for our group earlier this year found that Texas physician-owned hospitals will pay an estimated $86 million in taxes this year, money that will be re-invested back into the local community. In addition, our hospitals perform quite a bit of charity and unreimbursed care.
It’s also interesting to note that a federal study several years ago found that physician-owned hospitals have a positive impact on their local communities. The study indicated that the presence of physician-owned hospitals prompted existing hospitals to enhance their operations to meet the newer hospitals’ offerings.
Q: As you know, the House health reform bill contains a provision to stop further construction of physician-owned hospitals. Will it be possible to remove that provision?
BH: Every member of Texas’ Democratic delegation in the House, with the exception of only one, has asked Speaker Pelosi to allow the hospitals that are under development to have a fair opportunity to get up and running. That determination will be made after the House and Senate finish their bills and form a conference committee to hash out the differences.
Q: Reportedly 50 more physician-owned hospitals are under development in Texas. Are there any trends in the kinds of hospitals that are being planned?
BH: Just like the current mix of hospitals, these projects represent a variety of forms: general community, specialty, joint-venture with non-profit systems, rehab and psych. It all depends on the specific medical needs of each medical community.
Learn more about Texas Physician Hospitals Advocacy Center and contact Mr. Hillert at bhillert@tphac.org.
