da Hellander, MD
PNHP Executive Director
Corporate Health Care Begets Fraud: Recent US Experience
ABSTRACT: Many countries are currently engaged in debates over the privatization of their health systems. Privatization is advocated by the IMF and World Bank way of decreasing government expenditures on health and improving efficiency, despite much evidence to the contrary. Previous research on the U.S. market-based health system, much of it by Harvard-based researchers Drs. David Himmelstein and Steffie Woolhandler, has shown that U.S. public spending on health care is the highest in the world despite a lack of access to care for over 40 million persons.
Also, for-profit hospitals, HMO�s, nursing homes, and dialysis facilities are of both higher cost and lower quality than their not-for-profit counterparts. Less well known is that the period after the failure of the Clinton health plan in the U.S. in 1994 was characterized by a frenzy of mergers among health care corporations – pharmaceutical firms, insurers/HMOs and hospitals. Since then, a wave of corporate fraud of “Enron-like” proportions has swept the health care industry. The two largest hospital chains � Tenet and Columbia/HCA have paid fines and penalties over $2 billion for defrauding Medicare. Drug companies have been convicted and fined for illegally preventing generic competition, defrauding the Medicaid program, and paying bribes and kickbacks to pharmacies and doctors to prescribe their products. A recent and massive case of fraud in the corporate health sector is HealthSouth, a chain of for-profit rehabilitation hospitals and laboratories. HealthSouth’s founder and CEO, Richard Scrushy, inflated the firm�s profits by over $2.5 billion to bilk investors and the government. Nine HealthSouth executives have already pleaded guilty to securities fraud. Countries considering privatization of any health services – even laboratories – have much to learn (and avoid) from the U.S. example that corporate health care begets fraud.
International Association of Health Policy 