RESOLUTION 61-04: Physician-Owned Specialty Hospitals

WHEREAS: the United States offers the world’s medical care but at rapidly increasing cost; and

WHEREAS: responsible competition and the dynamics of the free-market encourage innovation and reduce costs; and

WHEREAS: the growth of physician-owned specialty hospitals over the last 10 years represents a free-market trend that should be encouraged; and

WHEREAS: such facilities have consistently delivered superior results in terms of patient outcomes, operating efficiency, and patient satisfaction; and

WHEREAS: physician-owned specialty hospitals provide a valuable addition to the services offered by community general hospitals; and

WHEREAS: a preliminary study by the Medicare Payment Advisory Commission (MedPAC) found that competition stimulates community hospitals to make productive changes; and

WHEREAS: the preliminary MedPAC study also found that specialty hospitals add capacity to their local area and allow specialist physicians working in them to be more productive; and

WHEREAS: a joint study by the Federal Trade Commission and Department of Justice released in July 2004 strongly endorsed expansion of competitive, free-market choice as a means for delivering quality health care and containing costs; and

WHEREAS: The FTC/DOJ study found that individual state “Certificate of Need” requirements for new health care facilities were arbitrarily limiting free-market competition in health care services and denying patients the potential benefits of such competition; and

WHEREAS: Physician-owned specialty hospitals are overwhelmingly centered in states that have no Certificate of Need requirements for new facilities; and

WHEREAS: Congress included a moratorium on self-referral by physicians of Medicare patients to physician-owned single-specialty hospitals in the Medicare Modernization Act signed into law in December 2003.

WHEREAS: This moratorium expires in June of 2005;

THEREFORE BE IT RESOLVED: the Association of American Physicians and Surgeons believes it is not in the best interests of patients, physicians, or taxpayers for government to arbitrarily limit the growth of physician-owned single-specialty hospitals and

BE IT FURTHER RESOLVED that Congress should end the moratorium on physician-owned specialty hospitals contained in the Medicare Modernization Act.