Los Angeles Times Examines Potential Conflicts of Interest for Doctors Bidding on Tenet Hospitals
The Los Angeles Times on Monday examined the potential impact of up to 15 doctors' groups seeking to buy hospitals that Tenet Healthcare, the nation's second-largest for-profit hospital chain, plans to sell this year (Girion, Los Angeles Times, 4/5). Tenet in late January announced plans to sell 27 of its 100 hospitals. The company began downsizing last year when it announced plans to sell or divest 14 facilities as part of an ongoing cost-cutting effort. However, unlike last year's sales, which focused largely on noncore markets, the hospitals in the upcoming sales will include several in larger markets, including 19 in California. Of those 19, all but one are located in Los Angeles or Orange counties (California Healthline, 2/5). The hospitals that will be sold are the company's poorly performing facilities that are expected to post significant losses this year. Tenet said it expects to net $600 million from the sales (California Healthline, 1/29). Of the hospitals for sale, Daniel Freeman Marina Hospital in Marina del Rey and Daniel Freeman Memorial Hospital and Centinela Hospital Medical Center, both in Inglewood, have received bids from investor groups that include doctors. The Tenet sales are "likely to renew the debate over whether the benefits of doctor-owned hospitals are worth the potential conflicts of interest," according to the Times. Federal laws prohibit a doctor from receiving payment for referrals and in most cases from referring Medicare and Medicaid beneficiaries to providers and facilities in which doctors have a financial interest.
Jerry Flanagan, a spokesperson for the Foundation for Taxpayer & Consumer Rights, said, "The concern is that they will close the trauma centers and emergency rooms and turn these hospitals into specialty clinics where they can be assured very lucrative treatments." Tenet, which has received a total of 92 bids and at least one offer for each facility, said the company is treating all prospects equally and pledges "to find buyers committed to keeping all the hospitals open as general care centers," the Times reports. Supporters of doctor-owned hospitals say there is no evidence to show that hospital ownership causes doctors to negatively influence patient care. Jack Lewin, CEO of the California Medical Association, said that hospital ownership could allow doctors to provide better service to patients and reduce health costs (Los Angeles Times, 4/5).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.