Patient Inc Comes to Ireland

national | public consultation / irish social forum | news report Wednesday October 04, 2006 21:49 by Health Activist

An American hospital corporation, Triad Inc., has emerged as a contender for six of the ten public hospital sites on offer from the government. Eight years ago, its parent company was indicted for multi-billion dollar fraud in the US involving insurance scamming and physician bribery. Dublin’s Beacon Hospital is Triad’s first venture in Europe.

Patient Inc comes to Ireland

An American hospital corporation, Triad Inc., has emerged as a contender for six of the ten public hospital sites on offer from the government. Eight years ago, its parent company was indicted for multi-billion dollar fraud in the US involving insurance scamming and physician bribery. Dublin’s Beacon Hospital is Triad’s first venture in Europe.

Triad’s parent company, Columbia/HCA, was the biggest hospital corporation in the US. Its settlement with the US Justice Department was, and remains, the biggest ever in the history of American health care. The hospital industry is one of the largest in the United States, and one of the most corrupt. For profit health care corporations head the list every year in settlements made with the US Justice Department under the False Claims Act. Government insurance schemes for the elderly and the poor, Medicare and Medicaid, have lost hundreds of millions of dollars to fraudsters.
The first whistleblower action was taken against the company in 1993. In 1998, the US Government finally joined the law suit; FBI investigations followed. By 2003, Columbia/HCA had been forced to break up, change its name and pay the US Justice Department $1.7 billion, to settle the slew of criminal and civil charges brought against it.
Triad was spawned in 1999 from HCA’s Pacific Group, when the company sold off some of its hospitals to pay its fraud bills. Around one-third of the hospitals owned by Triad today feature in a list of hospitals joined as defendants in the action taken by the US Justice Department against Columbia/HCA in 1998.
Most of Triad’s top management today are former HCA or Columbia/HCA senior executives. None of them have ever been found guilty of any wrongdoing, according to Triad.
In the 1998 case, over 400 hospitals stood accused of paying kickbacks to doctors and making false claims to government insurers, such as Medicare. Some of those hospitals were owned or managed by another member of the HCA family, Quorum.
Unlike HCA, however, Quorum failed to settle its charges with the Justice Department. Quorum and Triad are sister corporations: both share the same parent, HCA. Since 2002, Quorum has been a wholly owned subsidiary of Triad: Quorum is Triad’s management arm.
New fraud allegations under the False Claims Act continue to be made against Quorum to this day. Allegations have been made against a hospital managed by the corporation in Pennsylvania. Once more, Quorum stands accused of bribing doctors and making false claims against Medicare. These allegations extend to February 2006, four years after Triad bought the company.
In January 2006, the US Government took a case against a hospital in Ohio, Pittsburgh, also managed by Quorum. The lawsuit centres on false insurance claims to Medicare.
Triad is under contract to its parent company (now known as HCA) for services that include cost accounting. Cost accounting was at the heart of the fraud case taken by the US Government against Columbia/HCA and Quorum. The two corporations were accused of routinely preparing two sets of accounts, one fraudulent, for government insurers, the other for company purposes, to be concealed from government auditors. Columbia/HCA pleaded guilty to criminal fraud in 2000.
The Beacon Hospital, due to open next month in south county Dublin, is a Triad venture. Triad has leased the building from Beacon, installed its own management team and will share in the profits. The newly-appointed Beacon Hospital CEO previously worked for 20 years in a hospital in San Diego, California, that was named in a fraud settlement agreement made between the US Justice Dept and HCA. When Triad closed Mission Bay Hospital in 2002, its chief executive transferred to another Triad hospital in California, San Leandro, also named in that same fraud settlement agreement. Her former colleague at San Leandro has also been appointed to the Beacon Hospital in Sandyford, as its chief financial officer.
Beacon is Triad’s first venture in Europe. The corporation, which is partnered by the Beacon Medical Group, has recently been longlisted for six co-located private for profit hospitals on public hospital sites in Dublin, Cork, Limerick and Waterford. It is also planning a new maternity, women’s and children’s hospital in Sandyford Co Dublin. Triad is also understood to be involved in the new private hospital in Tullamore, Co Offaly.
Grafting new private wings onto existing public hospitals is government policy. Many fear that the new private for profit hospitals will bleed, and ultimately destroy, the public hospital system. Co-location lends itself to ‘sharing’ staff, technology and patients: the policy aims to fuse the private sector with the public system. The new for profit entities will enjoy significant advantages, co-location bonuses that come from being twinned with major public hospitals.
Co-location amounts to cost-free advertising, acting as a growth promoter for the adjacent investor-owned hospital, by stimulating demand for private care from patients who find themselves at the mercy of an increasingly battered public system that the government refuses to fund properly.
Critics of the policy also say standards of care will fall in public hospitals: co-location will give existing public hospital consultants a perverse incentive to absent themselves from their public hospital duties. Crossing the lawn to make substantial profits in the new investor-owned wing is a prospect that will tempt many. Doctors may also be driven by a sense of frustration, where government has refused, and is refusing to give them the resources they need to do their work.
Consultants may also be attracted by the new, cutting-edge technology offered by the new co-located hospitals. This technology will likely be used for public patients through the National Treatment Purchase Fund. But buying in diagnostic services from for profit companies costs the state far more than funding public hospitals to provide those same diagnostic services. US research shows that for profit corporations, such as Triad, make their money through overcharging for the services they provide. Co-location and other privatisation strategies have bankrupted the NHS in Britain.
Such policies threaten the future of our public health system. Existing public patients will be siphoned off for non-urgent procedures to the co-located hospital. Over time, all profitable non-emergency procedures will be performed in the private wing, leaving the public hospital to provide high-cost services, such as A&E, and intensive care. This will be done through the National Treatment Purchase Fund, which buys private treatment for public patients and bills taxpayers on the double to pay consultants twice to treat the same patients. Triad’s entry into the Irish ‘market’ shows that fraudulent billing practices and dubious doctor relationships may also come gift-wrapped with the privatisation package.