Senate Bill 309
November 20, 2002
Randy Wexler MD, FAAFP
Mr. Chairman, members of the committee, other interested parties, my name is Randy Wexler, and I am a Family Physician with an office here in Columbus. In addition to a full time practice, I am enrolled full time in the Masters of Public Health program at the Ohio State University College of Medicine and Public Health. Although Senate Bill 309 addresses a number of issues regarding physician self referral, I would like to specifically bring to your attention my concerns regarding boutique hospitals. As an interested party I come before you today to encourage you to pass legislation that would stop the construction of boutique hospitals in Ohio.
The concept of concentrating specialty care into a focused local is nothing new. For years hospitals have had “cancer floors”, “surgery floors”, and the like. From this focused specialty care arose the concept of specialty or “boutique” hospitals. In the United States, the most common form of boutique hospital is cardiac or orthopedic in nature. The most well known of these entities, Med Cath, is a cardiac care specialty chain with 8 hospitals nationwide and several more in development. The only such hospital in Ohio is the Dayton Heart Hospital owned by Med Cath.
Physicians who support the construction of boutique hospitals in Ohio claim they are doing so because the current health system is inefficient in the delivery of care, and that this inefficiency is detrimental to patients. The health systems counter that a boutique hospital that siphons-off insured patients while leaving the less reimbursable patients and procedures to them will itself hurt patient care. Both sides provide compelling arguments. The question really comes down to this, if boutique hospitals are built in Ohio what will the long term ramifications be to the delivery of health care to all Ohioans?
Proponents of boutique hospitals, physicians and their investment partners, claim that a boutique hospital is more convenient for patients, provides better care, and can do so at a lower cost. I agree that such a hospital is likely to be more convenient, and in the past such institutions have done so at a lower cost, but I would argue that the convenience provided has nothing to do with the direct delivery of health care. As for cost savings, the purported $800 per procedure savings in the case of Med Cath, is not what it appears to be, and the argument that boutique hospitals deliver “better care” is debatable.
Boutique hospitals tend to have nicer amenities, private rooms, and gourmet food. None of this has anything to do with the delivery of good quality health care. The frills and pampering provided at boutique hospitals are quite simply a waste of resources, and as such should not be used in comparison to other institutions.
Though Med Cath claims to be able to do a standard cardiac procedure such as a catheterization for about $800 less when compared to non-profit institutions this is comparing apples to oranges. The boutique hospitals only need to stock and be prepared for a limited number of patients with far more limited needs. The not-for-profit hospitals need to stock for a variety of doctors doing a myriad of procedures, and in addition must plan for the care of all medical problems for all patients and their complex needs. Furthermore, not-for-profits must care for the needs of the indigent, and their charges are reflective of this. Boutique hospitals only need to answer to their stockholders.
Finally, proponents of boutique hospitals claim that they provide higher quality care, and companies like Med Cath flaunt data showing a 12.1% reduction in mortality. This may appear impressive at first glance, but if the raw numbers are evaluated, one would see that as reported in the Lewin Group Study, that the mortality rate for Med Cath is 2.3% compared to 2.64% for other institutions. The difference is in reality just a fraction of a percent and not of statistical significance.
There has been much made of the fact that local Columbus not-for-profit hospital systems have specialty centers similar to boutique hospitals and the examples most often cited are The James Cancer Hospital at The Ohio State University Medical Center, and the Women’s Hospital at Mount Carmel Saint Ann’s. Again, this is not comparing similarly situated entities.
Full service hospitals often have specialty floors dedicated to the care of specific conditions such as an orthopedic floor, a cancer floor, or a cardiac floor. The James at Ohio State, and the Women’s Hospital at St. Ann’s, are nothing more than an extension of these specialty floors. In addition, these specialty institutions at these full service not-for-profit hospitals are part of, and help to financially support, the full service mission of these hospitals. Freestanding boutique hospitals do nothing but serve a specified organ system, and do nothing to support the full service care of the public.
Although boutique hospitals are capable of delivering quality care, they only serve to benefit a small sub-set of the population who happen to be afflicted with a limited range of illness. If these hospitals “cherry pick” insured patients at the expense of the uninsured, they will siphon funds from full service not-for-profit institutions and threaten the care of the indigent and by extension the community. Full service hospitals are already facing financial pressures at a level not previously seen, and should their operating margins be disrupted further, such as would happen with a boutique hospital, there is a very real danger that they will cut back on necessary services as well as charity care. I recognize that large bureaucracies such as hospitals move slowly and lack efficiency, but that does not in my mind make the building of a boutique hospital justified. Physicians who are frustrated with the system need to work to improve that system. Just because the legal system is slow and bureaucratic, it does not mean that one can just set up an alternative. Medicine is no different.
Allowing the construction of boutique hospitals is bad public policy and will create adverse consequences for the citizens of Ohio. As you consider this matter, I ask that you take any and all action that you feel appropriate to stop construction of these entities.
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Dec 02 2002 16:15 BFI COLUMBU 68022/10/310406 Ver 1 |