A physician-owned medical center planned as part of a hospital expansion in Santa Rosa, Calif., is one of the first casualties of the healthcare reform law's new restrictions on physician ownership.

The facility was supposed to be included at the same site as the Sutter Medical Center of Santa Rosa's proposed 70-bed hospital expansion at its Wells Fargo Campus, reports the North Bay Business Journal. According to the hospital's website, the proposed Physicians Medical Center would have been a 28-bed hospital offering invasive cardiology, surgery, outpatient and imaging services.

Lisa Amador, spokeswoman for Sutter Santa Rosa, confirms that it was the healthcare reform law, which prohibits physician-owned hospitals from earning Medicare certification after Dec. 31, 2010, that killed the plans.

"The healthcare reform bill recently signed into law prohibits the original physician partnership ownership model Sutter Health envisioned for the Physicians Medical Center," she said in a statement. "Sutter Medical Center Santa Rosa is currently evaluating other options." Ms. Amador did not return calls for comment, but told the Business Journal "it's difficult to speculate at this time" what those other options might be.

Although the physician-owned aspect of the project has been nixed, Sutter will go forward with the rest of the hospital expansion project, with groundbreaking expected by early October.

Irene Tsikitas

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