Physician-Owned Hospitals Faulted on Emergency Care

By Christopher Lee
Washington Post Staff Writer
Thursday, January 10, 2008

Most physician-owned specialty hospitals are poorly equipped to handle medical emergencies, federal investigators will report today, underscoring a long-standing concern about the rapid rise in the number of such hospitals.

The report found that 55 percent of 109 physician-owned hospitals reviewed had emergency departments -- and that the majority of those had only one bed, wrote Inspector General Daniel R. Levinson at the Department of Health and Human Services.

Fewer than a third of the hospitals had physicians on site at all times, and 34 percent relied on dialing 911 to get emergency medical assistance for patients in trouble, according to the report.

Moreover, 7 percent of physician-owned hospitals failed to meet Medicare requirements that a registered nurse be on duty at all times and that at least one physician be on call if none are in the hospital, the report found. Twenty-two percent failed to address in their written policies how emergency cases should be evaluated and treated when they arise.

The federal Centers for Medicare and Medicaid Services does not require participating hospitals to have emergency departments, but the agency does mandate that they keep written policies for handling emergency needs. It also says they cannot rely on 911 services as a substitute for their own first-line emergency care, though there is no prohibition on calling 911 to transfer a patient to another hospital.

The study did not name the hospitals.

"This report found specialty hospital shortcomings across the board," said Senate Finance Committee Chairman Max Baucus (D-Mont.), who, with Sen. Charles E. Grassley (R-Iowa), requested the investigation. "It's unbelievable that a facility that calls itself a hospital would, at times, not even have a doctor on call or a nurse on duty. It is unacceptable that these facilities are not designed or equipped to handle emergencies."

Molly Sandvig, executive director of Physician Hospitals of America, said the study provides no comparison data on how well other kinds of hospitals provide emergency services. The trade group believes that Medicare officials should take strong action against any hospital that does not meet federal standards, she said.

"Staffing requirements are something we always support," Sandvig said, adding that if physician-owned hospitals are using 911 services to stabilize patients, "that's not acceptable. . . . Obviously you need staff on site that has the ability to stabilize."

The issue of emergency care at physician-owned hospitals drew national attention early last year when a 44-year-old truck driver went into respiratory arrest following elective spinal fusion surgery at West Texas Hospital, a small facility in Abilene, Tex. The hospital staff called 911 for help, and the man was taken by ambulance to a larger regional hospital, where he died on Jan. 23. West Texas Hospital closed at the end of March after losing its Medicare certification.

In a 2005 case in Portland, Ore., an 88-year-old woman in recovery after elective back surgery at Physicians' Hospital had a heart attack after an injection of pain medication. No doctor was at the hospital, and nurses trying to resuscitate her called 911 to have the patient taken to a nearby community hospital, where she died four days later.

The new report "documents the significant and potentially life-threatening shortcomings of physician-owned specialty hospitals when it comes to emergency services," Grassley said in a statement. "Congress needs to take action to stem the trend before the situation is irreversible."

A Finance Committee spokeswoman said the panel will pursue new patient safeguards and stronger laws governing physician-owned hospitals when lawmakers take up Medicare legislation this year. Congress considered, but did not pass, proposed new restrictions on such hospitals last month in the year-end fight over a bill that averted a 10 percent cut in the fees that Medicare pays doctors.

Safety is just one element of a contentious debate over physician-owned hospitals, many of which have opened since the mid-1990s. There are about 180 such hospitals operating or in late stages of development, up from about 110 in 2001, according to Sandvig's group. Most specialize in services such as cardiac care or orthopedic surgery.

Supporters say physician-owned hospitals offer high-quality care, tend to have more nurses and, most important, offer patients competition and an alternative to traditional hospitals. Critics contend that doctors who steer patients to a hospital they own have an incentive to put profits above the patient's health and that specialty hospitals siphon off the most lucrative, easy-to-treat patients, leaving more complex and costly cases, as well as the poor and uninsured, to community hospitals.

Levinson, the IG, recommended that CMS identify and track physician-owned hospitals and ensure they are capable of providing initial emergency care. In a letter to Levinson, acting Administrator Kerry Weems concurred with the findings and indicated that the agency is pursuing most of the recommended changes.

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