'Niche' Providers Blast Fax

Central Kansas Medical Center, Great Bend, 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.

Central Kansas Medical Center (CKMC) in Great Bend, KS, has proven its commitment to the entire community for 100 years by providing a full range of health care services. But its ability to serve everybody is now threatened by a predatory surgical facility that opened in 2001. The niche facility drained more than half the surgical procedures out of the hospital--eaving CKMC to care for patients who don't have the resources to fully pay for services. Although it only has four overnight beds, the niche facility is a licensed hospital and is required to have an emergency room.

But there is a sign on the front door directing patients in urgent need to CKMC, the full-service hospital down the road. The hospital now has to make some of the most painful decisions ever faced by an organization deeply committed to long-term community health-which services to sacrifice and which to save. For CKMC, this may come down to a choice between the number of beds offered or non-emergency surgery. Either way, the community loses.

For more information, contact CEO Tom Sommers at

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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