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Subspecialty centers face growing resistance

Copyright 2003 by the American College of Physicians.

Physicians interested in offering their own services and procedures are getting a lot of press lately because of two trends: the growing numbers of specialty hospitals—particularly those specializing in cardiology and orthopedics—and the surge in freestanding endoscopy and surgical centers nationwide.

Subspecialists spearheading these types of physician-owned facilities say they are looking for the same benefits general internists want when they launch their own labs or buy their own screening equipment—more revenue and more control. But because the stakes can be so much higher with physician-owned facilities, subspecialists often face considerably more resistance.

In some cases, proposed specialty hospitals in several states are facing challenges to their certificate-of-need petitions. And in the last year, at least a dozen states have introduced legislation that would restrict the growth of specialty hospitals.

The Senate version of pending Medicare reform legislation goes so far as to prohibit the building of more specialty hospitals. (The House version calls for a study to see how specialty hospitals impact local care.) And some community hospitals are threatening to rescind physicians' admitting privileges if those doctors invest in their own facilities.

While resistance to physician ownership is increasing from hospitals, some medical groups are finding resistance from another source: other physicians. In the Minneapolis-St. Paul area, for instance, the Minnesota Oncology Hematology Professional Association (MOHPA), a group of more than 30 oncologists, recently proposed forming a joint venture with a national imaging group to buy a PET scan and open a freestanding PET scan center. The new service and facility, claimed MOHPA's president Thomas P. Flynn, MD, would give the group more control over the quality of equipment and imaging.

However, a local hospital—where many of MOHPA's patients were already getting PET scans—protested, saying its own expensive scanner was being underutilized. But the real resistance to MOHPA's plan came from a group of oncology radiologists, who were already angry over MOHPA's decision to open a freestanding cancer treatment center in 1998 that offered radiation treatments as well as other cancer therapies. That radiology group had lobbied for state legislation that would impose geographic limits on opening new radiation treatment sites.

Partly in response to those protests, the Minnesota Department of Health late last year decide not to rule on MOHPA's proposal until the group sought an opinion from the Office of Inspector General on the propriety of its proposed joint venture. In the face of that decree, MOHPA instead decided to abandon its PET-scan proposal.

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