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Consumer Organization Calls for End to Physician Self-Referral

HR 1424 Creating Better Access to Health Care

INDIANAPOLIS, March 14 /PRNewswire-USNewswire/ -- Consumers for Competitive Choice (C4CC) announced today their strong support of a ban on physician-owned hospitals. The ban, found in HR 1424, is currently before the Senate after solidly passing through the House. President Robert Johnson encourages members of the Senate and their constituents to support the passage of HR 1424 and effectively ban the development of new physician-owned hospitals and medical centers.

"Few issues are as pressing as the need to prohibit the practice of physician self-referral, which presents an inherit conflict of interest whereby doctors are selecting the most profitable patients for treatment in hospitals they hold ownership in," says Johnson. "America's free market health care system works because it encourages competition in terms of cost, efficiency and quality. But it cannot work if certain competitors control the flow of patients and are not subject to the same standards as others."

Johnson continues, "Unnecessary costs will bloat our health care spending and could create wider economic strife. The Congressional Budget Office has found the savings if such referrals are prohibited will be an estimated $2.35 billion over 10 years."

The practice of physician self-referral harms patients and consumers in at least four ways:

1. Because doctor-owners enjoy a closed loop, self-referral system, they do not have to face traditional market forces and, much like a monopoly, may charge significantly higher rates.

2. Physician-owned specialty hospitals perform lab tests, imaging exams, and other procedures as much as 40 percent more often than their non-physician owned facilities, which CBO identified as overutilization.

3. MedPac reports that physician-owners have historically engaged in "cherry picking" of the best paying, more healthy patients to further strengthen profit margins, leaving the more complex, uninsured and underinsured patients at the full service hospitals.

4. Most physician-owned hospitals lack adequate emergency care facilities. The Government Accountability Office reported that nearly two-thirds of all physician-owned hospitals instruct their staff to call 911 in the event of a life-threatening emergency; while about the same number do not have a licensed doctor on staff during all hours of operation.

Johnson concludes, "Physicians should not be in a position to mix the medical needs of patients with their own financial interests," and implores "all members of Congress to pass legislation eliminating this conflict of interest and holding physician-owned specialty hospitals accountable in the same ways community hospitals are now."

SOURCE Consumers for Competitive Choice
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