How Forest Park Medical Center Buckled Under Obamacare

Forest Park Medical Center is a victim of the Affordable Care Act.The hospital company's peerless quality of care, fantastic facilities and lower prices couldn't save it from the stranglehold of complex regulation. My firm was hired to help Forest Park handle its financial challenges, and this work has required nine bankruptcies so far. Hundreds of people have lost their jobs.The death of Forest Park is one of the best examples of over-regulation killing business.Every local market will soon have a tight oligopoly of providers at war with a tight oligopoly of insurance companies collectively and unwittingly conspiring to increase prices, decrease alternatives and homogenize protocols. In the North Texas market, three hospital systems (Texas Health Resources, Baylor and HCA) now control approximately 90 percent of the market, while four (soon to be three, given pending mergers) insurance companies control approximately 90 percent of the market.Two years ago, Forest Park Medical Center, which opened in 2009, had grown to 1,800 physicians and more than 1,000 staff. The system of five hospitals could serve up to 50,000 patients per year. It was one of the largest physician-owned hospital systems in the country.Now, all are gone. It would be easy to blame mismanagement or corruption, and there was some of that, but that does not explain the trend. Forest Park is one of many companies caught in the maelstrom. More than one independent system has been forced into bankruptcy this year alone.Who drives the health care regulatory regime? Not the patient or the doctor. It's the large hospital systems and insurance companies. These hospitals are nonprofits that once provided care for indigents for which they were not paid. Nonprofit hospitals retain the tax-free status under the Affordable Care Act, even though the hospitals now get paid for indigent care. So hospitals bring in more money, but without paying a tax obligation for that increase.At the same time, some large systems sometimes complain it's unfair that physician-owned hospitals don't take Medicare, Medicaid and other federal insurance programs. Many physician-owned hospitals would love to, but a 1992 law, supported by some of those very same large hospitals, prevents it.So venomous is the relationship between large, nonprofit hospitals and physician-owned groups, that opponents often engage the Department of Justice to investigate their rivals. In the last few years, the DOJ has seized billions of dollars in settlements from most of the companies in the system.The regulatory regime is so complex that health care providers can hardly render service without running afoul of a rule. One of the Forest Park founders has been found guilty on seven counts of commercial billing fraud, and three other founders and 18 others affiliated with the system have been charged with violating a host of regulations.While small hospitals struggle, large hospital chains and insurance companies are consolidating as the Affordable Care Act allows them to bring in more cash. Dozens of rural hospitals have gone out of business.What we, the patients, need is more choice in providers, more clinical autonomy, more transparency in pricing and less regulatory complexity.Seldom is a doctor, nurse or hospital able to answer the patient's question: What will it cost? The answer is, it depends. It depends on the insurance carrier, the provider, the time of year, the form of payment (cash or reimbursement), the proximity of the provider to a hospital, the state in which the provider is located, the insurance plan the patient has selected and whether the procedure is deemed elective, just to name a few factors. This is not hyperbole. Every one of those factors is relevant to the determination of price.There are plenty of bad actors in this play, but most in the health care profession are noble men and women trying to help people get back to health, to provide comfort and care, and to genuinely improve the circumstances of others.The answer: Create a health care system that allows the physician delivering the service to be able to tell the patient what it will cost.Todd Furniss is chief executive of glendonTodd Capital. Email: info@glendonTodd.comGot an opinion on this column? Send a letter to the editor, and you just might get published.  Continue reading...

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