The Nebraska Legislature will soon consider a proposal to impose a temporary moratorium on building new hospitals in Nebraska. Such a pause would provide time to study the effects of doctor-owned hospitals in the state.
The proposal stems from the controversy in Kearney, where a group of physicians is trying to break away from Good Samaritan Hospital and start their own hospital.
The physicians say Good Samaritan has failed to stay innovative and forward-thinking and that competition is a positive. Those on the other side say the new hospital would reduce Good Samaritan’s revenues, eroding the hospital’s ability to offer services that only it provides.
The process in Kearney has gotten so far that some city leaders as well as construction and labor-union interests now support the proposed hospital. An effort to press the pause button on the project thus faces difficult odds.
But regardless of what happens in Kearney, Nebraska leaders as well as the general public need to have a serious discussion about the real-world effects when doctor-owned hospitals — often focusing on a particular speciality — are created, in competition with community-based hospitals.
Community-based hospitals play a crucial, unique role in Nebraska. Their community depends on them for under-reimbursed services such as emergency and trauma care, neonatal intensive care, freestanding community clinics, hospice, behavioral health and health education.
As the Nebraska Hospital Association notes, such services “generate little or no income and most likely would not exist, or would have to be operated by the government, if they were not provided by Nebraska’s hospitals.” If their ability to deliver such services is significantly impaired, communities can suffer.
Rapid City, S.D., provides an example. When a neurosurgical hospital opened in that city in the late 1990s, the local community-based hospital faced tremendous difficulties in finding enough physicians to provide emergency neurosurgery.
In Kearney, Good Samaritan accepts patients from several smaller hospitals and pays for their transportation. Those smaller hospitals, which under federal rules can keep patients for only a limited time, have an interest in making sure that Good Samaritan is able to continue in that role.
Many Nebraskans will remember the old days when many a community in the state had two hospitals. Often the scenario involved a Catholic hospital and a Lutheran one. But the local market couldn’t provide enough business for both institutions. So, over time, the hospitals merged into one.
Mergers between community-based hospitals and doctor-owned hospitals aren’t the norm, though; the doctor-owned institutions arose in the first place due to frictions at the traditional hospital.
The point here isn’t that physician-owned hospitals should be stigmatized as evil, much less banned. After all, they often are nimble institutions that provide leading-edge care, with the latest equipment and impressive nurse-staffing levels.
Doctors at community-based hospitals have disagreements all the time with hospital management over staffing, capital spending and other things, and it would be silly to think that the hospital management is always right.
Plus, the current health care system — by paying doctors based on the amount of care and services they provide — serves as a powerful incentive for physicians to maximize the quantity of prescriptions and services, leading many to enter into doctor-owned medical ventures.
Some states put requirements on doctor-owned hospitals. One state imposes a fee, for example, generating funds for services for low-income people. Lawmakers need to strike a reasonable balance, taking care not to overregulate the medical sector.
With all that said, however, the fact remains that traditional community-based hospitals serve a role that no other institution does in Nebraska. If those hospitals are no longer able to provide certain services as needed, what is going to happen in the medium-sized and small Nebraska communities that depend on them?
It’s time for Nebraska to have a serious discussion on these issues. The interests of all parties should be treated fairly and taken into consideration. A thorough examination of these hospital issues would have tremendous benefit in helping the state decide how best to move forward.
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