The passage of the healthcare reform bill will have a “devastating impact” on physician-owned hospitals and virtually destroy the more than 60 hospitals that are currently under development, according to Molly Sandvig, executive director of Physician Hospitals of America (PHA).

Specifically, the legislation limits the ability of physicians to have a direct ownership interest in hopsitals. Existing physician-owned hospitals are grandfathered in, but cannot increase physician ownership. PHA said that for months it has been working with the American Medical Association and other medical and healthcare groups “to warn Congress that a provision slipped into the legislation would have devastating, unintended consequences.”

"[O]ver 25,000 jobs are at risk in 38 states…rural and inner city hospitals being rescued and kept open by physician investment will now close,” Sandvig said.

PHA said it is continuing to work with both Senate and House supporters. “Committed champions in both parties have told PHA that they will explore all other legislative and regulatory options to mitigate the harm caused by the current language,” the association said.