May
2, 2003
The
Honorable
Ohio
House of Representatives
The
Riffe Center for Government
77
South High Street
Columbus,
OH 43215
Dear
Representative :
On
behalf of Ohio’s 170 community hospitals, the Ohio Hospital Association Board
of Trustees would like to respond to a number of inaccurate statements made
this week in testimony to the House Health and Family Services Committee by
opponents to House Bill 71.
As
you may know, HB 71 is vigorously supported by OHA and is viewed by this Board
as critically important for maintaining a robust health care delivery system
for strong Ohio communities.
OHA
appreciates the time the health committee has spent on this issue — both this
session and at the end of the previous legislative session. However, with no
future hearings set at this time, this Board is compelled to address below some
of the misconceptions and inaccuracies presented in this week’s opponent
testimony.
Ø
Opponents
questioned whether Ohio’s full-service community hospitals provide enough
charity care to justify their not-for-profit tax-exempt status. In 2000, 4.8%
of patients served by Ohio hospitals were uninsured and unable to pay for their
care, amounting to over $550 million in care to the uninsured for which they
were not reimbursed. In addition,
hospitals provide far more in community benefits than they would pay in taxes,
including health education and screening programs.
Ø
Opponents
stated that physician-started hospitals like the Cleveland Clinic would never
have been built if this law were enacted. That statement is false. The
Cleveland Clinic is a not-for-profit charitable hospital. Physicians are
employed by the Clinic but are not investors. All revenues generated by the
facility are put back into the system to maintain facilities, purchase
technology and improve health care available to northeast Ohioans. HB 71 would
not prohibit current operations of the Cleveland Clinic and would not have
prevented its founding.
Ø
Opponents
argued OHA lobbied heavily to do away with Certificate of Need but now the
association is attempting to restrict competition. In 1994, OHA requested that
the legislature keep CON for hospitals and extend the program for high-cost
projects and for ambulatory surgical facilities. In 1995, when it became clear
that the legislature was moving forward with eliminating CON, OHA requested the
program be kept for inpatient hospitals. In HB 71, OHA is attempting to ensure
a fair competitive environment – one in which physicians who control patient
flow don’t have a leg up on competing providers.
Ø
Opponents
claimed no conclusive studies support state and federal laws prohibiting
physician self-referral to certain facilities in which they are investors,
known as Stark laws. Numerous federal studies from the 1980s and early 1990s show
higher
utilization when physicians had a financial stake in the facility. Opponents
also stated — falsely — that federal Stark laws contain a “safe harbor” for
physicians providing
services directly to patients in facilities they own. Physicians are prohibited
from referring patients to 11 categories of health care facilities if they are
owners and can be excluded from the Medicare and Medicaid programs for violations.
Ø
Opponents
argued not-for-profit community hospitals are hypocritical because they have
for-profit ventures of their own and that physicians who are employed by
hospitals are in positions of greater conflict than physician-investors in
specialty hospitals. In fact, even where not-for-profit hospitals are partners
in a for-profit venture, their profits are reinvested into hospital operations
— not paid out as dividends. When physicians are employed by hospitals, federal
Stark law requires that their compensation is not dependent on their patient
referral decisions.
Ø
Opponents
suggested limited-service specialty hospitals are the wave of the future and
that communities might best be served by having just one full-service community
hospital and an array of specialty hospitals. If our health care delivery
system is to undergo such dramatic change, it should be the deliberate result
of careful consideration by community leaders — including those who serve on
local hospitals boards — not just a consequence of physician-investors using
their patient referral authority to steer patients to their own hospitals.
OHA
looks forward to any future opportunity to resolve the issues surrounding HB71
in subsequent testimony and individual discussions on this legislation. Please
contact Jeff Klingler, director, state policy and advocacy, if you have any
questions. Jeff can be reached at 614-221-7614 or jeffk@ohanet.org.
Thank
you for your continued thoughtful consideration, and your support of HB 71.
Respectfully,
Members
of the Ohio Hospital Association Board of Trustees
Copy: Speaker Larry Householder
Gov. Bob Taft