Medicare Fraud and For-Profit Hospitals- A Story That Never Ends

Sunday, CBS’ Sixty Minutes took a close look at Health Management Associates (HMA) a for-profit hospital chain that, according to its employees, has “relentlessly pressured its doctors to admit more and more patients—regardless of medical need—in order to raise revenues”

“We talked to more than 100 current and former employees and we heard a similar story over and over,” CBS correspondent  Steve Kroft reported.  Emergency room physicians were told “that if they didn’t start admitting more patients to the hospital, they would lose their jobs.” The orders came from the top:

With 71 hospitals in 15 states, HMA is the fourth-largest for profit chain in the country. Last year it raked in revenues of nearly $5.8 billion;  half of that came from Medicare and Medicaid. In other words, taxpayers were footing the bill for a large share of those unnecessary hospitalizations.

Patients also paid. As one doctor observed: “If you are put into the hospital for reasons other than a good, justifiable medical reason, it puts you at significant risk for hospital-acquired infections and what we would refer to as ‘medical misadventure’” (i.e. “preventable medical errors)

     :                           “Putting Heads on Beds” –An Old Story

 The piece was shocking. But it is not a new story. It is an old story. To be more precise, it is a never-ending story. In Money-Driven Medicine: The Real Reason HealthCare Costs So Much, I profiled several for-profit hospital companies that did just what Health Management Associates has done: “put heads on beds”– even though the patients didn’t need to be hospitalized.

At Tenet, in Redding, California, patients weren’t just hospitalized, they underwent heart surgery. An investigation would reveal that in many cases, they “had no serious cardiac problems whatsoever.”

 A FBI affidavit estimated that in one-quarter of all cases, Tenet’s two “rainmaker” heart surgeons were slicing  open patients who should never have been on an operating table. Other doctors tried to alert the hospital’s administration. They were ignored.

Some of those patients did not survive. Others were crippled. All suffered psychological trauma. 

                    HCA:  Florida Governor Rick Scott’s Back-Story                       

In 1997, Health Corporation of America (HCA) made headlines when FBI agents swarmed HCA offices in five states, and found evidence that at HCA, executive salaries hinged on meeting financial targets such as “growth in admissions and surgery cases.”
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How Health Care Reform Can Create Jobs — and Cut Costs

The following post originally appeared on the TIME Moneyland blog.

Nobody would be surprised to hear that spending more on healthcare will result in new jobs. But a new program announced by the Obama administration last week seeks to create new healthcare jobs and at the same time reduce healthcare costs. Is such a trick possible?

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