Nueterra Healthcare fully supports the recent lawsuit filed by Physician Hospitals of America and a Texas hospital aimed at rescinding language in the new federal health care reform law that prohibits fair competition in the medical marketplace.

On June 4, Physician Hospitals of America and Texas Spine & Joint Hospital jointly filed suit in U.S. Federal Court in the Eastern District of Texas challenging the constitutionality of Section 6001 of the Patient Protection and Affordable Health Care Act. Section 6001 prohibits physician-owned hospitals from expanding after March 23, 2010, and bans any new physician-owned hospitals that are not certified as Medicare providers by December 31, 2010.

Both plaintiffs maintain that Section 6001 is exclusionary and unconstitutional, eliminates competition for non-physician owned hospitals, and will ultimately have a negative impact on patient choice and medical care affordability.

“There is no justifiable reason for physician-owned hospitals to be singled out in this federal legislation. We are providing a valued service to our patients and the community,” said Dr. Michael E. Russell, II, an orthopedic spine surgeon at TSJH. “If we are prevented from expanding, patients will have fewer choices and costs will ultimately go up.”

Texas Spine and Joint Hospital is a top-rated facility that provides valuable jobs and tax revenue in Tyler, Texas. The outcome of the lawsuit could set a precedent affecting the 265 existing physician-owned hospitals in the United States, 29 of which are scheduled to open and receive Medicare certification by Dec. 31, 2010. An additional 45 are currently under development and would not be able to receive Medicare certification by that date. And 39 others are being forced to shelve their development plans because of the new law.

“It is truly illogical and unfortunate that at a time the government is supposedly attempting to increase access to care, it has chosen to stop the growth of many of the best hospitals in the country,” says Molly Sandvig, executive director of PHA. “The American people need more access, not less. We need high quality, efficient, patient-centered care, not more of the same high cost, inefficient, bureaucratic minded care.”

Physician-owned hospitals currently employ more than 75,000 full- and part-time employees in 34 states and have an average annual payroll of $13 million per hospital, with $3.4 billion in cumulative annual payroll nationally.

As the lawsuit progresses, we will keep you informed.

Nueterra is keeping a high profile among supporters of America’s physician-owned hospitals and ambulatory surgery centers. That commitment is what brought Chairman Dan Tasset and David Ayers, president of Nueterra’s Surgical Facilities Division, to a recent Physician Hospitals of America conference in Dallas.

There was a very large turnout for the conference, at which industry leaders discussed the next steps for physician-owned hospitals following passage of the health care reform law. Members discussed the legislative and legal implications for their hospitals, options for expansion, development and restructuring, and how to further affect the regulatory and administrative processes.

The new law creates a strange paradox:  while opening insurance coverage to 34 million more Americans, it prohibits physician investors from creating new facilities in their own communities and restricts their ability to expand and enhance existing ones. That means a lot more patients and fewer facilities to treat them. The new law puts the country on a track where we may well be facing a shortage of treatment options for patients. In a country that supposedly is built upon the free market system, this defies logic.

For that reason Nueterra, together with the PHA, is ratcheting up our commitment to the patient-physician relationship, which is the bedrock of our health care system. We believe that physicians have the right to invest in and participate in the governance of hospitals and surgery centers. Their patients have the right to choose to be treated there or not.

More and more intrusive government regulations are driving doctors out of the profession earlier than they would retire normally, as well as keeping younger people from entering medicine at all. The new reform law exacerbates the situation even more.

Curtailing market competition is not the answer. Nueterra will continue to fight for physician rights.

Nueterra continues to champion the cause of physician ownership for ambulatory surgical centers and surgical hospitals with members of Congress and other elected officials. The Patient Protection and Affordable Care Act that is the new health care reform law imposes serious roadblocks to physician ownership going forward.

As soon as the bill was signed into law, plans for 24 new physician-owned hospitals were suddenly nixed and the 47 such facilities currently under construction will be severely tested to meet new regulations in order to open. And it all has resulted because the owners and operators of community hospitals represented by the American Hospital Association don’t want competition. It’s as if General Motors was able to pass a law that bars Ford from producing new vehicles.

That’s why Nueterra and St. Luke’s Health System recently hosted Kansas Congressman (and candidate for Senate) Jerry Moran on a tour of our joint venture, St. Luke’s South Surgery Center. We wanted to make him aware of the difficult environment that physician-owned facilities now face and we had a good discussion of the issues.

Nueterra and partners have also held discussions along these lines with Texas Gov. Rick Perry and Missouri Sen. Christopher Bond.

Our message remains clear: Physicians need to have leadership positions and be involved in the governance of facilities in which they have financial stakes. Onerous regulations simply will send entrepreneurs elsewhere with their investment dollars. We believe that the supply of young physicians will also be curtailed as they realize their financial options are more limited.

Nueterra is committed to telling elected officials the truth about physician-owned facilities – we deliver quality care in patient-centered environments that result in extremely high levels of patient and physician satisfaction.

We are willing to risk those values in the open marketplace. Why aren’t others?

A funny thing happened on the way to national health care reform – Nueterra Healthcare began experiencing one of the strongest years in our history.  While others are busy wringing their hands over the new law’s intention to impede the growth of physician-owned hospitals, Nueterra is moving forward and will open seven new facilities this year.

Nueterra started the year with the opening a new community hospital in McKinney, Texas, which is the first of two hospitals the company will open this year in partnership with Methodist Health System. Later this month, Nueterra will open a new surgery center at the Navy Yard in Philadelphia as a joint venture with the Rothman Institute and Thomas Jefferson University Hospitals. Other facilities will open throughout the year and across the country.

Nueterra is looking for the new opportunities that are being created by the new health care reform law. It’s hard not to be excited by the fact that in the next four years 32 million Americans who are currently without health care insurance will be entering the health care marketplace. As a leader in this industry, Nueterra Healthcare has always embraced a mission to put more power in the hands of physicians to improve outcomes, reduce costs, and increase physician and patient satisfaction.

Granted, the new law specifically impedes, if not outright bans, the ability of physician-owned hospitals to grow in the future. So, physician-owned hospital leaders will continue to work with legislators and regulators to minimize the most blatant anti-competitive aspects of this law.

Nevertheless, the recent reform legislation does not change Nueterra’s mission or our commitment to physicians. We will continue to develop medical facilities where physicians control the delivery of care, participate in the governance and reap the economic rewards.

Nueterra executive David Ayers recently told the Kansas City Business Journal: “Nueterra’s going to come out of (health care reform) just fine because we find ways to make our business work.”

That’s the bottom line. We’re very excited about the prospects that are emerging for ventures with companies that are already part of the Nueterra family and with new partners altogether.

For more than a decade Nueterra Healthcare has worked with physicians and health systems to expand health care options in their own communities. Together we have succeeded in forging new partnerships to develop surgery centers and hospitals where physicians take personal stakes in the health of their patients.

While our government has now banned the growth of physician ownership of hospitals, Nueterra is undaunted.

When they started the company, the founders of Nueterra believed in health care reform by putting more power in the hands of physicians to lower costs and improve outcomes. The government’s newly enacted restrictions on physician ownership haven’t changed our company’s purpose. We believe change creates opportunity, and Nueterra’s focus since its inception has been on creating new opportunities for physicians and health systems.

Our goal is to continue to keep our facilities vibrant by bringing in new physicians and developing innovative ways for physicians to share in the success of the effective delivery of quality health care services.

In the next few years, more than 30 million additional people will obtain insurance and become fully functional medical consumers. The models of physician ownership that we have created will be able to take advantage of new opportunities in the medical marketplace. Physician-owned hospitals and surgery centers are the “value-based healthcare” that the reform plan wants to achieve.

Nueterra is also exploring several innovative ownership models that will still allow physicians to be in control.

There is nothing to fear. Nueterra is going to continue to develop hospitals where doctors hold key management positions – where they will be able to govern and reap economic reward while providing quality care to their patients.

Are you ready for what appears to be the final round of the health care reform debate? We’re getting it this week as Congress once again is headed toward votes on massive bills in the House of Representatives and the Senate.

In the more than two months that have passed since the Senate’s Christmas Eve vote, a lot has changed. Most striking, the Democrats have lost their 60-vote majority in the Senate with the election of Republican Scott Brown  in Massachusetts. And in the House,   several more Democrats as well as Republicans have expressed doubts about their reform bill – over abortion coverage and the bill’s lack of cost controls.

We hope the bills get a complete airing and that the votes won’t be tied to artificially imposed deadlines, which will serve to limit the debates. Whatever happens need to be well thought out and not jammed down the throats of the American people.

Nueterra has said all along that Congress is debating the wrong bills, which continue to ignore some of the solutions that can be alleviated through physician ownership of medical facilities. Nueterra understands the need to curb costs and we are part of the solution. That’s why we’re moving ahead on the development of new facilities. We’ve been down this road before and we are committed to providing opportunities for physician ownership wherever we can.

As we’ve said before, health care can be reformed from within without a sweeping overhaul. Here’s how:

• Put a cap on medical malpractice damages. It’s time to stand up to the lawyers and put a limit on medical malpractice damages.

• Create real incentives for individuals to open health savings accounts. We’ve consistently maintained that the only real way to reform health care is to turn patients into intelligent consumers.

• Allow insurance companies to sell their plans across state lines; it’s simply putting our free enterprise system to work.

• Allow trade associations and guild members the ability to band together and purchase group insurance.

• Create state-based high-risk insurance pools for individuals who have difficulty obtaining insurance coverage.

Since the founding of Nueterra Healthcare 10 years ago, we have pursued a mission to improve the quality of health care, to ensure its efficient delivery to the public and subsequently make health care more affordable and accessible to more people.

Sound familiar?

We haven’t been waiting around for the government to pass legislation aimed at achieving a “reformed” health care system. Rather, we are pursuing that mission in the medical marketplace through strategic partnering with physicians – the only people who can really take care of patients. The more partners we involve in our business will mean there are more opportunities for patients to obtain high quality care. Simply put, we are expanding access and controlling the costs.

An example of how Nueterra helps to expand access is this week’s opening of Methodist McKinney Hospital in the Dallas area, a joint venture with the Methodist Health System and area physcians. The 65,000-square-foot facility features six fully equipped operating rooms, comprehensive diagnostic imaging including CT and MRI services, and 15 private patient rooms. The hospital is the second to open under Nueterra’s Community Hospital Division, following a facility that opened in Great Bend, Kan., in July.  We expect to open another health care facility in the Dallas area next year.

Real health care reform will take place in examining rooms and operating rooms as physicians working in efficient health systems are in control. Nueterra will continue to pursue our mission and will succeed in that mission.

We are extremely disappointed in the way the Senate handled the “health care reform” legislation. If Congress can reach a compromise bill that can pass both the House and the Senate, then surely we will look back on it as one of the worst pieces of legislation ever passed in the history of our nation.

If it passes it will be because the Democrats are buying votes.  When Congress regresses to this level of backroom bargaining, how can it not spell disaster?

Speaker of the House Harry Reid (D-Nev.) put so much money in front of Sen. Ben Nelson (D-Neb.) how could he not pass it up? All U.S. taxpayers will be forced to pay the state of Nebraska’s Medicaid share for many years into the future if this bill becomes law. How could Sen. Nelson pass it up?  A similar pay-off went to Sen. Mary Landrieu (D. La.).  Why aren’t the voters of all the other 48 states screaming foul?

Who knows how many more side deals are lurking in the fine print? The devil is in the details, indeed. This will not help our economy get back on its feet; we just can’t afford the huge blank check at this point.

In fact, poll after poll shows that the general public is no longer in favor of the health care reform that will result from either the House or Senate versions of the bill. The most recent Rasmussen Report, an independent polling organization, shows 55 percent of the U.S. electorate oppose the reform bills, although most (67 percent) believe the legislation will pass.

As the effects of health care reform begin to become clear, we have faith that the public will step up and require Congress to clean up much of the nonsense that our elected officials have allowed to transpire. Either that or elect people who will.

It’s amazing that after all the months that Congress has wrangled over health care reform as few as one or two senators will make or break the bill. Late last week it looked like the vote of Ben Nelson, a conservative Democrat from Nebraska, could block the bill from passage over the issue of abortion coverage.

The fight over abortion arises because, under the bill, the federal government would take on new responsibilities for health care, subsidizing coverage for millions of people. At issue is whether policies bought with subsidies could cover abortions even if private premiums are separated.

Advocates of abortion rights say that women who now have insurance covering abortion could lose it under the restrictions that would be imposed under a health bill passed by the House last month.

“There are other substantive issues,” Mr. Nelson said in the radio interview. But, speaking about abortion, he added, “That alone is a reason,” the New York Times reported.

The White House has assigned a full-time aide to deal with Sen. Nelson’s concerns as the Senate attempts to move toward a vote on the bill before Christmas. Meanwhile, liberal Democrats are complaining that they have compromised enough to the conservatives, and now they are threatening to block the bill.

It’s fascinating how so much time and effort have been spent to cobble together a health care bill that can garner 60 votes needed for passage in the Senate. While leaders in Congress and the White House seem willing to do anything to placate Sen. Nelson, it’s really unclear how the kowtowing will affect other aspects of the bill.

Meanwhile, our servicemen continue to put their lives on the line in the war against terrorism, which seems to have taken a back seat for the nation’s attention. It simply illustrates that government can’t solve problems for us. Every day we see the government doing things that make no sense, such as inhibiting the free market with needless regulations.

As we have stated many times, in order to reform the health care system we need to empower entrepreneurs to address problems in the marketplace. Take away the onerous certificate of need restrictions for more hospitals and curtail punitive damages for physician malpractice and we could solve the crisis in short order and stimulate the economy at the same time.

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