An increase in physician-led hospitals would reduce the monopoly power of consolidation by allowing more medical centers to compete in the current market, according to a new study.
The Economic and Social Benefits of Physician-Led Hospitals report found that 55% of physician-led hospitals are in southern states like Florida and Texas.
“One factor that probably explains it quite a bit is regulation because of the certificate of need,” said Dr. Nam D. Pham, author of the study. “In other places like D.C., in order to create a new health facility, you need to have a certificate of need explaining to the government why another hospital is needed.”
Currently, physician-led hospitals are not allowed to expand facility capacity due to Section 6001 of the Affordable Care Act.
“These physician-led hospitals create economic impact for the areas in which they operate so why not let them grow,” Pham said. “We should encourage that competition. The hospital chains are okay but you have to allow the smaller guy to operate.”
The study further found the following:
Only 4% of metro areas that have physician-led hospitals are very highly concentrated compared to 13% for areas in which they don't have physician-led hospitals.
“There's a trend of doctors creating businesses and smaller hospitals but at the same time consolidation in the industry is also very high and the bigger hospitals don't want the competition,” Pham told Legal Newsline.
Physician-led hospitals excel in customer service.
“The CMS has a survey of the patient before, during, and after their hospital experience, and they score each hospital from one to five based on their consumer survey,” Pham said. “Forty-one percent of physician-led hospitals were given a five. That is something that shocked me.”
Smaller hospitals competing with bigger chains creates improved access to care.
“The patient gets more access to different hospitals and because hospitals compete with each other for the patient, it reduces costs," Pham added.