Former Physician-Owned Hospital to Move Ahead With $167M Federal Loan

Physicians who originally had an 80 percent stake in a proposed Austin, Texas-area hospital have entirely dropped ownership due to the ban on physician-owned hospitals under the health reform law.

"We did not feel we could see victory on the horizon," says Eddie Alexander, CEO of Surgical Development Partners in Franklin, Tenn., which organized the project.

On the bright side, the project just received backing for the U.S. Department of Housing and Urban Development for $166.9 million in loans and physicians will still have a strong role in the hospital, Mr. Alexander says.

He says Lakeway Regional Medical Center, a 103-bed full-service hospital with six ORs, is a promising venture because there are no other hospitals within a 10- to 15-mile radius.

"In this project, physicians will have a strong voice in the hospital," Mr. Alexander says. "They will be able to participate on the board. We give them the clinical control that other hospitals do not."

Surgical Development Partners does not have any other pending hospital projects with physician investors but "we are still creating physician-friendly partnerships," he says. 

Read a Austin Business Journal report on Lakeway Regional Medical Center.