The Sleeper Lawsuit Against ObamaCare In Texas
Forbes.com
July 17, 2010
The lawsuits against ObamaCare filed by state attorneys general have gotten a lot of attention, but there's another worth watching. Last month the Texas Spine & Joint Hospital, along with the Physician Hospitals of America trade group, filed suit against Kathleen Sebelius. The hospital, based in Tyler, Tex., claims that the language in the Affordable Care Act (aka health reform) banning physicians from owning hospitals is unconstitutional.
I've argued over and over again that doctors who treat patients should be able to own hospitals. Accountants own their CPA firms and lawyers own law firms. Why should non-physicians have a monopoly on running hospitals? It strikes me as bad public policy, since doctors should know better than most what makes a good hospital. There's also a track record of these hospitals producing better clinical results than the non-specialized hospitals they compete with. For a backgrounder on this issue, check out "Stop That Patient," my cover story on the controversy.
The lawsuit could to trial as early as December. If it succeeds, could it lead to a groundswell of others that chip away at the 2,000 page health bill?
It's unclear how seriously to take the claims that the clause against specialty hospitals is unconstitutional. There's already a set of laws on the books, called Stark, that prevent doctors from investing in certain kinds of labs and imaging facilities. Given that this law has been in effect for almost 20 years, it seems difficult to say that a new law adding hospitals to that list would suddenly be unconstitutional. We raised this Physicians Hospitals of America executive director Molly Sandvig, who said, by email:
"First, the constitutionality of the Stark law has never been specifically questioned. Second, to take away a right that existed by law, upon which physicians could rely, Congress needs a rational basis. We're contending their was not rational basis because physician hospitals are better all around and don't damage the existing healthcare system (all the usual arguments). It is a violation of the 5th amendment right to due process and equal protection to remove a previously granted right without a rational basis."
The PHA also argues that the law will have a significant economic impact both on local economies and on tax revenues. Physician-owned hospitals employ 75,000 workers and pay on average $3 million in taxes per facility--compared to none by 85% of hospitals that have non-profit status.
The government hasn't weighed in yet, except to ask for more time. "Unfortunately there's nothing we can provide at this time in that this is a matter in litigation," says Charles Miller, a U.S. DOJ spokesman for the civil division.The attorney defending the case for Sebelius was not allowed to comment. A motion for summary judgment is scheduled for September and a trial could be as early as December, according to Physican Hospitals of America executive director Molly Sandvig.
This little rule, within ObamaCare, is another way that the legislation cuts down on patient choice. Using the market power of Medicare, the White House and Congress are essentially shutting down a business it doesn't like for political reasons. It's not a good precedent for patients who would like more options, not fewer.
Read the lawsuit:http://blogs.forbes.com/sciencebiz/2010/07/the-sleeper-lawsuit-against-obamacare-in-texas/
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