In Search of an Ethical Constraint on Hospital Revenue

Lauren Taylor

The Hastings Center

Originally published 14 APR 23

Here are two excerpts:

A physician whistleblower came forward alleging that Detroit Medical Center, owned by for-profit Tenet Healthcare, refused to halt elective procedures in early days of the pandemic, even after dozens of patients and staff were exposed to a COVID-positive patient undergoing an organ transplant. According to the physician, Tenet persisted on account of the margin it stood to generate. “Continuing to do this [was] truly a crime against patients,” recalled Dr. Shakir Hussein, who was fired shortly thereafter.

Earlier in 2022, nonprofit Bon Secours health system was investigated for its strategic downsizing of a community hospital in Richmond, Va., which left a predominantly Black community lacking access to standard medical services such as MRIs and maternity care. Still, the hospital managed to turn a $100 million margin, which buoyed the system’s $1 billion net revenue in 2021. “Bon Secours was basically laundering money through this poor hospital to its wealthy outposts,” said one emergency department physician who had worked at Richmond Community Hospital. “It was all about profits.”  

The academic literature further substantiates concerns about hospital margin maximization. One paper examining the use of municipal, tax-exempt debt among nonprofit hospitals found evidence of arbitrage behavior, where hospitals issued debt not to invest in new capital (the stated purpose of most municipal debt issuances) but to invest the proceeds of the issuance in securities and other endowment accounts. A more recent paper, focused on private equity-owned hospitals, found that facilities acquired by private equity were more likely to “add specific, profitable hospital-based services and less likely to add or continue those with unreliable revenue streams.” These and other findings led Donald Berwick to write that greed poses an existential threat to U.S. health care.

None of the hospital actions described above are necessarily illegal but they certainly bring long-lurking issues within bioethics to the fore. Recognizing that hospitals are resource-dependent organizations, what normative, ethical responsibilities–or constraints–do they face with regard to revenue-generation? A review of the health services and bioethics literature to date turns up three general answers to this question, all of which are unsatisfactory.

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In sum, we cannot rely on laws alone to provide an effective check on hospital revenue generation due to the law’s inevitably limited scope. We therefore must identify an internalized ethic to guide hospital revenue generation. The concept of an organizational mission is a weak check on nonprofit hospitals and virtually meaningless among for-profit hospitals, and reliance on professionalism is incongruous with the empirical data about who has final decision-making authority over hospitals today. We need a new way to conceptualize hospital responsibilities.

Two critiques of this idea merit confrontation. The first is that there is no urgent need for an internalized constraint on revenue generation because more than half of hospitals are currently operating in the red; seeking to curb their revenue further is counterproductive. But just because a proportion of this sector is in the red does not undercut the egregiousness of the hospital actions described earlier. Moreover, if hospitals are running a deficit in part because they choose not to undertake unethical action to generate revenue, then any rule developed saying they can’t undertake ethical actions to generate revenue won’t apply to them. The second critique is that the current revenues that hospitals generate are legitimate because they bolster institutional “rainy day funds” of sorts, which can be deployed to help people and communities in need at a future date. But with a declining national life expectancy, a Black maternal mortality rate hovering at roughly that of Tajikistan, and medical debt the leading cause of personal bankruptcy in the U.S. – it is already raining. Increasing reserves, by any means, can no longer be defended with this logic.

The info is here.

Involuntary Commitments: Billing Patients for Forced Psychiatric Care.

Nathaniel P. Morris & Robert A. Kleinman

The American Journal of Psychiatry

Vol 177, 12, 1115-1116.

Surprise medical billing, in which patients face unexpected out-of-pocket medical costs, has attracted widespread attention. As of March 2020, members of the U.S. House of Representatives and Senate were working on legislation to limit these billing practices. Surprise medical bills have various consequences for patients and families, including loss of income or savings, worsened credit scores, use of resources for legal counsel or litigation, and psychological stress. Patients can receive surprise medical bills for care they did not authorize, including treatment for loss of consciousness, cardiac arrest, traumatic injuries, and other emergencies where informed consent cannot be obtained before care. A related set of medical bills has not garnered much attention yet may rank among the most surprising for patients and families—bills for involuntary psychiatric care.

Billing patients for involuntary psychiatric care deserves more attention for several reasons. First, these patients may be held financially liable for care they did not authorize and even actively refused. Compared with most medical care, involuntary psychiatric care is different in that patients can be detained for evaluation and treatment against their expressed wishes. All U.S. states have statutes that authorize emergency and inpatient civil commitment, such as involuntary hospitalization on grounds of dangerousness to self or others due to a mental disorder, and a majority of states have provisions for outpatient civil commitment. These statutes are based on principles that under specific circumstances, individual and/or public benefits of managing someone’s mental health needs supersede that person’s rights to refuse psychiatric care. However, forcing someone to assume financial liability for involuntary psychiatric care may infringe upon additional liberties, including individuals’ abilities to consent to contracts and to allocate money. By shifting the balance of autonomy, justice, beneficence, and nonmaleficence associated with involuntary psychiatric care, these billing practices raise ethical concerns.

The info is here.

DC Physician Indicted for Almost $13M in Medicare Fraud

Ken Terry
MedScape.com
Originally posted August 9, 2019

A physician who has a practice in the District of Columbia has been charged with participation in an alleged $12.7 million healthcare fraud scheme that involved submitting false claims to Medicare for complicated procedures that were never performed, according to a Department of Justice (DOJ) news release.

In an indictment filed July 30 in the District of Columbia, physiatrist Frederick Gooding, MD, aged 68, of Wilmington, Delaware, was charged with 11 counts of healthcare fraud. He was arrested on August 1.

According to the indictment, from January 2015 to August 2018, Gooding participated in a healthcare fraud scheme in which he submitted Medicare claims for injections and aspirations that were not medically necessary, not provided, or both.

Gooding allegedly knew that the injections were not provided. To disguise his scheme, he allegedly falsified medical documents to make it appear as if the purported medical services billed to Medicare were medically necessary.

The info  is here.

Why does imprisoned psychologist still have license to practice?

Charles Keeshan and Susan Sarkauskas
Chicago Daily Herald
Originally published November 11, 2016

Here is an excerpt:

Federal prosecutors said Rinaldi submitted phony bills to Medicare for about $1.1 million over four years, collecting at least $447,155. In nearly a dozen instances, they said, she submitted claims indicating she had provided between 35 and 42 hours of therapy in a single day. In others, she submitted claims stating she had provided care to Chicago-area patients when she was actually in San Diego or Las Vegas.

The article is here.

The map is not the territory: medical records and 21st century practice

Stephen A Martin & Christine A Sinsky
The Lancet
Published: 25 April 2016

Summary

Documentation of care is at risk of overtaking the delivery of care in terms of time, clinician focus, and perceived importance. The medical record as currently used for documentation contributes to increased cognitive workload, strained clinician–patient relationships, and burnout. We posit that a near verbatim transcript of the clinical encounter is neither feasible nor desirable, and that attempts to produce this exact recording are harmful to patients, clinicians, and the health system. In this Viewpoint, we focus on the alternative constructions of the medical record to bring them back to their primary purpose—to aid cognition, communicate, create a succinct account of care, and support longitudinal comprehensive care—thereby to support the building of relationships and medical decision making while decreasing workload.

Here are two excerpts:

While our vantage point is American, documentation guidelines are part of a global tapestry of what has been termed technogovernance, a bureaucratic model in which professionals' behaviour is shaped and manipulated by tight regulatory policies.

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In 1931, the scientist Alfred Korzybski introduced the phrase "the map is not the territory", to suggest that the representation of reality is not reality itself. In health care, creating the map (ie, the clinical record) can take on more importance and consume more resources than providing care itself. Indeed, more time may be spent documenting care than delivering care. In addition, fee-for-service payment arrangements pay for the map (the medical note), not the territory (the actual care). Readers of contemporary electronic notes, composed generously of auto-text output, copy forward text, and boiler plate statements for compliance, billing, and performance measurement understand all too well the gap between the map and the territory, and more profoundly, between what is done to patients in service of creating the map and what patients actually need.

Contemporary medical records are used for purposes that extend beyond supporting patient and caregiver. Records are used in quality evaluations, practitioner monitoring, practice certifications, billing justification, audit defence, disability determinations, health insurance risk assessments, legal actions, and research.

The article is here.