As congressional negotiators get set to debate the fate of specialty hospitals in the Medicare reform bill, a General Accounting Office report released this week contains both good news and bad news for the industry.
"Specialty Hospitals: Geographic Location, Services Provided and Financial Performance" on the one hand says specialty hospitals seem to have a significant impact in certain markets, which could fan acute care hospitals' arguments that that the facilities are driving them out of business with unfair competition.
On the other hand, it also finds that only about one-quarter of the physicians who use specialty hospitals have investments in them. That finding may soften concerns that these facilities are mainly used by physician-owners who want to make money from them.
The report is expected to influence negotiations on contradictory House and Senate language on specialty hospitals in the Medicare reform bill that are expected to begin any day now. The Senate version of the giant bill would bar exclusive physician investments in specialty hospitals, which industry representatives say would end the current building boom of specialty hospitals. But the House version would not restrict specialty hospitals and only calls for a study to build on the GAO's reporting.
Lobbyists for specialty societies report that negotiators are expected to consider compromise language declaring a moratorium on new specialty hospitals while a study is being prepared, but as of today the topic of specialty hospitals had not yet come up.
The industry opposes a moratorium, which could affect 26 specialty hospitals that are expected to open in the next year or so, representing a growth rate of about 25 percent, the new GAO report says.