Can Hospitals Exist without Doctors?

One cannot run a hospital without doctors, and one cannot run one with them.

Peter F. Drucker (1909-2005)

December 14, 2011- Yesterday Kaiser Health News ran a piece “Hospitals Clash with House Republicans on Medicare Cuts.”

The article revived these questions:

• Are hospitals friends or foes of independent physicians?

• Will the future of hospital-doctor relationships be one of cooperation, collaboration, or cooptation? (On the last bullet point, "cooptation" means hospitals take over the practice of medicine).

• What is the role of hospitals in health reform – hospitals after all have already agreed to $155 billion in Medicare cuts under Obamacare?

But I digress. What is the hospitals’ problem with the Republican legislation? What is the big deal? The Senate will probably not even take up the bill up anyway.

Simply this: Hospitals would have to pay $17 billion of the $38 billion required for the “doctor fix, ” a 2 year reprieve from the 27% Medicare doctor pay cuts.

How? Starting in 2013, the bill would lower hospital Medicare payments government now pays for uncollected bills, copays, and deductibles and for the administrative costs devoted to collecting these unpaid items.

Hospitals say this additonal cost burden would be devastating. Uncollectibles are soaring because of the recession, diminished state Medicaid funding, and a 2% cut due the “sequester” in the wake of the failed budget bill.

The hospitals’ hostile reaction to the Republican legislation raises these questions.

. What is the basic attitude of hospitals toward independent doctors, who may practice largely outside the hospital environment but who may depend on hospitals for their work and livelihood?

• If the 27% cut goes through, can hospitals live without doctors who will no longer accept Medicare or Medicaid patients?

Answers to these questions may be moot, i,e.not relevant in the present practice environment.

• Many of the doctors who cease or cut back on practices will be older independent doctors who practice outside of hospitals.

• Many will go into cash-only practices, concierge practices, walk-in clinics, and urgent care centers outside of the province of hospitals.

• Many, especially younger or mid-career doctors, will become hospitalists, ER physicians, or employees of hospital-owned practices.

• Academic centers or large hospital systems or doctor driven- systems already employ 10% to 12% of physicians.

. Many primary care doctors will work for government-sponsored Community Clinics, which already care for 20 million Americans.

• Some of the practice vacuum will be filled with physician extenders – nurses, nurse practitioners, and physician assistants.

• Many doctors may be working within the context of accountable care organizations (ACOs) - in which doctors will be paid to care for large defined populations of Medicare patients and will be required to follow a series of complicated bureaucratic rules.

Tweet: Hospitals oppose Republican bill giving doctors 2-year reprieve from 27% cuts but which lowers hospital Medicare payments by $17 billion.