Statement: Congress Should Include the Physician Self-Referral Provision in the Farm Bill for Patients and Communities

American Hospital Association; Federation of American Hospitals

WASHINGTON, April 18  /PRNewswire-USNewswire/ — The following is being issued by the American Hospital Association, Federation of American Hospitals and Coalition of Full Service Community Hospitals:

Congress has long been concerned about physician self-referral and the conflict of interest it creates between a patient’s health care needs and physicians’ financial interests.  In fact, over the last year, the House of Representatives has twice passed a ban on physician self-referral to hospitals in which a physician has an ownership interest.  Clearly Congress is openly and strongly committed to addressing this issue as quickly as possible.

The provision being considered in the Farm Bill would not close physician-owned hospitals.  It would simply stop physician self-referral to new facilities.  Studies have shown that many physician-owned facilities treat far fewer patients who are sicker or poor and lessen patient access to emergency and trauma care.  Research also reveals that when physician-owned facilities enter a community, it results in increased utilization rates.  Studies also have shown that physician-owned hospitals, as a whole, do not deliver the promised benefits of higher quality and lower cost.  These include studies in peer-reviewed journals such as The New England Journal of Medicine and The Journal of the American Medical Association as well as reports by government agencies and advisory groups such as the Medicare Payment Advisory Commission and the U.S. Government Accountability Office. The government’s own Congressional Budget Office found that banning self-referral to new facilities would reduce Medicare spending by $2.4 billion over ten years, so taxpayers will win.  In short, these facilities siphon off the resources that full-service hospitals need to provide the range of services needed in everyday emergencies as well as in times of community crisis.

Including a provision in the farm bill — or any bill — to ban self-referral would protect patient access to vital health care services, as well as ensure fair competition in health care.  That’s why Congress must act on their commitment and end the practice of self-referral.

Editor’s note: For a listing of research addressing self-referral, contact Elizabeth Lietz at (202) 626-2284.

American Hospital Association; Federation of American Hospitals;

see original