'Niche' Providers - Blast Fax

Eastern Idaho Regional Medical Center (EIRMC), Idaho Falls, ID

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 341-bed Eastern Idaho Regional Medical Center (EIRMC) in Idaho Falls is a Top 100 hospital serving over 40,000 square miles with a trauma center and helicopter rescue service.  It's a sole community provider for more than 250,000 rural residents scattered across ID, WY, and MT -- and millions of Yellowstone Park visitors.  But, last November, local physicians opened a specialty facility right next door to EIRMC.  The physician-owned facility is licensed as a hospital, but lacks common hospital services, such as an emergency department, ICU, and clinical labs.  EIRMC has already seen nearly half of its OB deliveries, as well as orthopedic and surgical business, redirected to the new facility.  As a result, while continuing to meet its vital mission of providing care for all patients, including the underinsured and high-risk,  EIRMC is straining to subsidize important but money-losing services like neonatal intensive care and behavioral health.  And while the new specialty facility excited local media because it claimed to add 100 jobs to the economy, the fact is that many of those slots were filled with highly-skilled nurses from EIRMC.  So the community hospital was forced to spend more than $1 million in recruitment and temporary staffing -money that should have been used for community health services.

For more information, contact CEO Doug Crabtree at 208-529-6210.

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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