The American Medical Association voiced its support for federal legislation that would create exemptions to permit physician ownership of hospitals in high-need rural areas in a May 29 report.
Here are five things to know about the proposal:
1. The bill would allow physicians to own rural hospitals as long as the facility is more than a 35-mile drive from a main patient campus or critical-access hospital.
2. It would also lift limits on expansion of existing physician-owned hospitals to meet the needs of patients and communities.
3. “Rural hospitals provide essential health care services to millions of Americans, but they continue to face immense financial pressures and workforce shortages that threaten their viability,” James Madara, MD, the AMA’s executive vice president and CEO, wrote in a letter to the bill’s sponsor Rep. Morgan Griffith, and its original co-sponsors Reps. Kevin Hern, Vicente Gonzalez and Lou Correa.
4. According to the AMA, physician-owned hospitals grew from less than 70 across the U.S. in the early 2000s to approximately 250 by 2010. This growth was largely driven by the demand for general acute care hospitals in certain markets and opportunities to boost clinical operations and surgical procedures through facility specialization. This expansion stopped in 2010 with the passage of the Affordable Care Act, which included provisions that severely restricted the expansion of existing physician-owned hospitals and blocked new ones from opening.
5. “This legislation capitalizes on the fact that physician-led hospitals have been shown to provide high-quality care at lower costs compared to other hospitals,” Dr. Madara wrote. “Studies have found that hospitals owned by physicians deliver savings to Medicare, feature lower prices for procedures and are more efficient.”
