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Health reform law targets physician-owned hospitals

A boutique hospital tucked into the woods of West Lake Hills could be part of a dying breed. Physician-owned hospitals such as the Hospital at Westlake Medical Center have been targeted by provisions in the wide-ranging health insurance quotes legislation that ban new physician-owned hospitals and prohibit existing ones from expanding.

The law is aimed at limiting doctor ownership of hospitals, an arrangement that critics say can lead to conflicts of interest and the siphoning of paying and insured patients, which leaves traditional public and private hospitals to shoulder the burden of indigent care. Safety issues also have been raised over some physician-owned hospitals because of concerns of inadequate emergency room staffing and facilities.

Opponents of the ban have scoffed at those characterizations, but they are forced to live with the new law รข?? at least for now. In Austin, owners and administrators of physician-owned hospitals are coping with the new law in various ways, from changing their business structures to considering selling out to wondering whether to continue at all.

Health care as business venture

Visitors to the Hospital at Westlake Medical Center can easily forget that they are at a place that treats the sick and injured. On a recent sunny day, employees cleaned an outdoor pool that rippled. Music softly hummed from speakers hidden in the live oaks on the carefully maintained grounds. Inside, visitors traversed floors inlaid with glass from Italy and granite from the Middle East to simulate the Colorado River. African mahogany lined patients’ rooms, and all the tubes and needle-disposal bags were hidden in custom-made cabinets.

The hospital was built to attract patients or “customers,” as CEO Rip Miller likes to call them. Now, in the wake of the federal legislation, Miller, the only non-doctor with an ownership position in the hospital, is talking about the possibility of selling his creation to one of the area’s large hospital systems.

Growth is the reason any entrepreneur gets into a business, said Miller, who has an ownership position in a hotel in South Africa, a construction company and a cattle ranch in North Dakota. I don’t think there will be any physician-owned hospitals in 10 years,” Miller said. I think it’s sad that the country is going to lose the culture of physician-owned hospitals.

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This entry was posted on Monday, May 31st, 2010 at 4:40 am and is filed under Health Insurance Blogs. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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