Hospitals can't be owned by doctors under Obamacare, existing doctor-owned hospitals barred from expanding

hospital bed

Lawmakers looking for a little shoulder room as the federal government begins to lash down regulations on the controversial health care straightjacket might do well to study the buckle and strap that prevents physician-owned hospitals from expanding.

story in the San Antonio Express-News this morning hears complaints from owner-doctors, but actually gets to the nub of why the Patient Protection and Affordable Care Act won't allow doctors from growing their hospitals in the first place. The powerful American Hospital Association, made up of 5,000 hospitals and health care networks, thinks doctors who have a going interest in hospitals have a conflict of interest between patient and profit.


“Studies have shown that many physician-owned facilities treat far fewer patients who are sicker or poorer and lessen patient access to emergency and trauma care,” Matthew Fenwick, a spokesman for AHA wrote in an e-mail to the newspaper. “These facilities siphon off the resources that full-service hospitals need to provide the range of services needed in everyday emergencies.”

Physician Hospitals of America, representing the fewer than 300 doctor-owned hospitals in 34 states, says it is a matter of health care hegemony for the AHA. “What it comes down to is they want to limit competition,” Michael Russell Jr., president of the trade group, said.

The law cuts off Medicare and Medicaid reimbursements to hospitals like South Texas Spine & Surgical Hospital north of San Antonio, a successful operation which once had plans to add to its current 30 beds. “So we're stuck in the mud,” medical director Gilbert Meadows, said. “Can't grow, can't get new partners, can't have new beds.”

Physician Hospitals of America, representing Texas Spine and Joint Hospital in Tyler, sued to overturn that part of the new health care law. Lawyers for the trade group have asked Michael Schneider, the federal judge hearing the case, to rule in favor of doctor-owned hospitals by virtue of the recent ruling by Federal Judge Roger Vinson in Florida that the entire health care law is unconstitutional.

Vinson's ruling in favor of 26 states including Texas is expected to make its way to the Supreme Court.

Contact Mark Lisheron at 512-299-2318 or

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Photo of money by flickr user Nathan & Jenny, used via a Creative Commons license.