'Niche' Providers - Blast Fax

Via Christi Regional Medical Center, Wichita, KS

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.

Via Christi Regional Medical Center in Wichita is a full service community hospital. But when the Kansas Heart Hospital opened nearby in 1999, heart bypass operations at Via Christi dropped from 1,400 to 650, a loss that makes it much more difficult for Via Christi to continue operating vital but expensive services the community needs, such as behavioral health, care for the growing uninsured population, an emergency room … the list goes on. To help maintain a vibrant institution, Via Christi expanded its neurosurgery department, a strategy so successful that two of the doctors Via Christi helped recruit for the project are now opening a spine hospital in January 2004. In an urban area of 554,000 people, physician-owners of these “niche” providers can refer the most profitable cases to their own facilities. But because they are not required by law to operate emergency rooms or other critical services, they leave those to full-service community hospitals. In the face of competition that siphons much-needed resources, how long can Via Christi continue providing the critical services the community needs?

For more, contact Randy Nyp, Via Christi President and CEO, at (316) 268-5000.

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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