Doctors, Deals and Health Care : The public has a stake in hospital ‘marketing’ arrangements

Should the public care what financial arrangement a hospital has with the radiologists, anesthesiologists and other physicians contracted to provide services? Yes, if those private arrangements affect health care.

The Department of Health and Human Services says that some hospitals across the nation, in their search for new dollars, are engaging in extortion by demanding rebates, charitable donations and other fees from doctors. Where true, such practices have the potential to translate into higher medical costs for consumers and even unnecessary or delayed care.

At Anaheim General Hospital, a lawsuit promises to provide a rare glimpse at this complex financial world behind the scenes of the nation’s health-care system. Already, the acrimony demonstrated between two ousted radiologists and the hospital administration is the stuff of television melodrama.

The doctors, with an exclusive contract to read all X-rays and perform radiological imaging procedures, balked at paying an unspecified “marketing” fee. The hospital administrator threw the doctors off the premises and called the police. Now the hospital is suing to recover the $181,000 it says it is owed.

State law forbids the offering or accepting of rebates or commissions in return for patient referrals. But whether services provided by a hospital are needed, or real, and whether they are priced competitively, are best determined by the facts in individual disputes. The matter is complicated by a flap between the American Hospital Assn. and the federal inspector general over his recently broadened interpretation of a federal anti-kickback statute.

The public, too, has a clear stake in these “marketing” services and other financial arrangements. Few can be comfortable either with the notion of padded bills or the idea that hospitals are extracting a finder’s fee for delivering ailing bodies to specialists; yet there are, of course, some agreements that may be fair. This case may help make that key distinction. In the meantime, the U.S. health-care system buckles under the weight of mounting costs.