'Niche' Providers - Blast Fax

The Bone and Joint Hospital, Oklahoma City, OK

Niche providers drain community health services
No matter what, no matter when, America's community hospitals are there, keeping the promise that the full spectrum of health care services will be there, 24/7, when needed. Americans expect it … and community hospitals deliver.  BUT, physician-owned boutique hospitals - “niche providers” - undermine the mission of community hospitals by providing only the most highly profitable services to the least severely ill patients.

The Bone and Joint Hospital (B&J) in Oklahoma City was founded in 1920 by  orthopedic physicians who never took a dime of profit out of the hospital. When a new facility was needed in the 1970s, they believed that continued ownership was unethical and converted B&J to a non-profit hospital. Times have changed. A group of orthopedic surgeons not on staff at B&J purchased controlling interest in the nearby Northwest Surgical Hospital in Oklahoma City. The 23-bed facility does not accept Medicaid patients, only admitting profitable cases. Other physicians on staff at B&J have ownership at niche hospitals and send less profitable, government-insured orthopedic patients to B&J where all patients are accepted, regardless of ability to pay. In the face of valuable revenue lost to multiple outpatient surgicenters and the six boutique hospitals operating in Oklahoma City, how long can B&J continue to reinvest in quality care for the community - offering award-winning service while earning high patient and employee satisfaction ratings? Recognized by the Oklahoma State Quality Award for Excellence, B&J is also part of the SSM Health Care system - the first Malcolm Baldridge National Quality Award winner in health care.

For more contact CEO Jim Hyde at (405) 552-9100. 

The business model for niche providers is one in which owner- physicians refer patients to facilities in which the physicians have an ownership interest – heightening concern about conflict of interest in clinical decision-making.

  • Steering profitable cases or well-insured patients to niche providers diverts revenue from full-service community hospitals … revenue that is critical to
    keeping open money-losing services that communities need, like trauma centers, burn units and emergency departments. 
  • Hospitals lose money every day caring
    for people with complex health needs
    and little or no health insurance. Without
    revenue from profitable services to help
    offset this cost, how can hospitals continue
    caring for those who are truly in need? 
  • The Senate version of the Medicare Prescription Drug Benefit and Modernization Act of 2003 begins to address the problem by prohibiting physicians from referring patients to a specialty facility in which they have an ownership interest.

Senators and Representatives:  Help community hospitals keep the promise of care by protecting access to critical services.  Retain the Breaux-Nickles-Lincoln language on niche providers in the final Medicare Prescription Drug Benefit and Modernization Act of 2003.


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