“Patients, he said, may simply deserve only the amount of care they can afford.” That “he” is one Dr. Prem Reddy, a wealthy cardiologist busily buying up hospitals — 8 so far — many in SoCal.
His company, Prime Healthcare Services Inc., snaps up hospitals then cancels insurance contracts to collect higher reimbursements, and gets rid of needed — but not financially lucrative — medical services, according to the LA Times.
Basically, Prime Healthcare makes extra money via its emergency room services. Many insurance policies will allow patients to go to the nearest hospital facility for emergency care (though Sicko shows that insurance companies often try to find loopholes out of this). So if in an emergency, a patient can go to a Prime Healthcare hospital’s ER for treatment — the insurance company’ll have to pay higher fees since Prime Healthcare doesn’t have contractually-negotiated fees with insurance companies.
On four occasions since 2002, inspectors have found that Prime Healthcare facilities failed to meet minimum federal safety standards, placing their Medicare funding at risk.
The fact that Reddy’s getting away with this is a compelling reason to support Senate Bill 840, Senator Kuehl’s California Universal Health Care Act — a bill that’s expected to pass both houses — but also a bill that Schwarzenegger’s likely to veto again. Why? For one, Reddy’s a registered Republican who “held a $1,000-a-plate benefit at his Apple Valley home for Gov. Arnold Schwarzenegger that raised $230,000″ last year.
Is it possible to raise enough outrage that Schwarzenegger’ll be forced to sign the bill?
Reminds me of when I worked for a for-profit hospital chain that was opening a new facility in 2001. That year, when the new year rang in, the first baby born was a little hispanic child. Mattered not to the rich white ceo that the child was an American citizen. It was a “mexican” from parents who were going to be paying cash in payments so the baby didn’t get recognized as was heavily advertised, nor did it get the scholarship that was also being advertised. Evil, sheer evil.
Comment by NVMojo — July 8, 2007 @ 11:49 am
Whereas, LA Times article “Hospital Group Rejects System…” by Daniel Costello dated July 8, 2007, is full of distortions and sensationalism that portrays me in a very bad light, as a physician, I take a serious objection to the gross misstatement he attributes to me in “that patients may simply deserve only the amount of care they can afforded”. This is preposterous. Every patient deserves the care he/ she needs based on the severity of illness, not what he/she can financially afford. The reporter’s grossly negligent comparison of healthcare services with other essential needs attributed to me is taken totally out of context and is erroneous. I am especially troubled because of thousands of patients and employees of Prime Healthcare Services’ hospitals that may be deeply hurt by this callous report.
Comment by Prem Reddy, MD — July 8, 2007 @ 1:49 pm
I was surprised to read the article “Hospital group rejects system and cashes in” in the July 8, 2007 LA Times and find that there was no mention in the article of Chino Valley Medical Center being in bankruptcy and on the verge of closing before Prime Healthcare Services (PHS) came to its rescue in the US Bankruptcy Court and has subsequently turned it around to be a premier community hospital with upgraded facilities and equipment. Contrary to the statements in the article, Prime Healthcare Services did not cancel managed care contracts at Chino Valley Medical Center but instead those were rejected through the Court by the United States Bankruptcy Judge. It was the poor reimbursement provided by these contracts which caused Chino Valley Medical Center to be in bankruptcy in the first place. Prime Healthcare Services’ demonstrated commitment to keep the emergency departments at its hospitals open with the least amount of closure (saturation/bypass hours) is commendable given the present changes in the patient dynamics of increased uninsured patients, porous borders and increasing number of illegal immigrants in the border states like California. PHS’ commitment to supporting these free community clinics that serve the poor and uninsured is commendable.
Respectfully,
James M. Lally, DO, MMM
President & Chief Medical Officer
Chino Valley Medical Center
5451 Walnut Avenue
Chino, CA 91710
http://www.cvmc.com
Comment by James M Lally — July 8, 2007 @ 3:07 pm
I found this Sunday ‘ s cover story on Prime Healthcare Services, “Hospital Group Rejects system and Cashes In,” to be inaccurate, and does not tell the whole story. As an emergency physician working in three emergency departments under Prime Healthcare, I can assure you and the readers that no uninsured patients are turned away. In fact the opposite is true. There is an increase in the number of ED visits and hospital admissions for the uninsured. This is because the emergency department under Prime Healthcare is a significant aspect of their business model, and they work tirelessly to provide us with the staffing and equipment we need in order to see more patients than other local hospitals. The result is that we have become the fastest and busiest departments in our marketplace. Wait times, lab and x-ray turn around times, and door to doctor times, are outstanding. Patients of all payor classes (including the uninsured) come to Prime hospital ED ‘ s for their emergency needs because they know they will get the fastest care.
While it is true that some programs have closed at sites that are managed under Prime, such as pediatrics and obstetrics, it has only been when those services were minimally utilized, or already in existence at another Prime Hospital in the area. For example, Prime closed its OB services at Chino Valley Medical Center , but referred all OB patients up to its Montclair hospital 3 miles away. Consolidating was a creative way for the organization to cut costs and still provide access to care in the community.
Much of what Dr. Reddy is doing may be perceived as controversial, but in the end, he is keeping hospitals open that would have otherwise closed had he not taken over operations. He has single handedly saved the jobs of thousands of employees, nurses, and others in Southern California . Where others before him have lost millions in the healthcare industry, he has made millions, and in turn infused vital capital for equipment at each center. He has made it easier for those of us who practice hospital-based medicine to care for patients 24 hours a day. This has a direct and positive impact on patient care.
The California healthcare system is dying a slow death. 60 hospitals have closed in the last 10 years in our state largely because the costs to provide care exceed reimbursement. At the same time companies like Blue Cross have posted record earnings on Wall Street into the billions of dollars. Canceling contracts with health plans such as Blue Cross is not as devilish as may be implied in the cover story. Hospitals do it all the time. What Dr. Reddy is doing is ingenious. First, he forces health plans to renegotiate contract rates at levels that allow hospitals to stay open and earn profit. He has successfully renegotiated several contracts simply by canceling them and “starting over.” Secondly, he is taking dollars away from Wall Street and the private sector, and placing them back into California ’s broken system. Dr. Reddy calls himself a maverick, and he’s right. He thinks outside the box. We need new ways of thinking through California ’s health crisis in order to remove ourselves from the shattered system BEFORE it collapses.
While I do not agree with everything that Prime Healthcare does operationally, I am encouraged by their results. I feel the same way about Dr. Reddy that I do about Chief Bratton and his success in decreasing crime in Los Angeles , and Governor Schwarzenegger and his success at balancing the budget. All three men are new age thinkers with track records, working in extremely difficult settings. Each man knows great victories and great failures (as Daniel Costello pointed out in the case of Dr. Reddy). What is certain, like them or hate them, they are in the arena fighting for causes that have an effect on Californians, and will certainly not go down in history as having timid souls. I can respect that.
Mark R. Bell, M.D., F.A.C.E.P.
http://www.emergentmed.com
Comment by Mark R. Bell, M.D., F.A.C.E.P. — July 8, 2007 @ 6:33 pm
Wow, that’s some massive PR effort going on there… not one, not two, but THREE, count ‘em THREE defensive posts.
Comment by Don Hosek — July 9, 2007 @ 3:07 pm
interesting. One thing about the free market in health is that it doesn’t work. The free market works on the principle that the buyer can make a informed choice based on evidence. Health is one of the area’s people don’t choose. If you go to a doctor and he recommends drug A when infact drug B is just as good half the price and doesn’t bring the doctor skiing how many people will challange the doc? Zero.
Hence Health care is not a true free market as the consumer can’t make a choice which is vital for a free market to work. A government can. Whether that be state hospitals or private hospitals it can chose the best deal for a patient. But it has to be probably regulated. the Drug a drug b thing can happen in public sector as in private sector.
Comment by simon — July 10, 2007 @ 4:52 am
Wow, sounds like those doctors are real fans of this blog, and finally found their golden opportunity to chime in! Or…not.
Comment by Nicole — July 10, 2007 @ 5:24 pm
It is unfortunate the care that is provided by all hospitals operated by Prem Reddy MD.
The bottom line is profit at the expense of patient care. Time will show the levels of patient neglect. Will write latter when I have time.
Comment by Bill — July 11, 2007 @ 9:10 am
prem reddy offered his employees insurance benefits
but he does not accept this insurance in his facilities. what is going on?
Comment by O — August 7, 2007 @ 6:10 am
Dear O, If you work in healthcare field you should know the simple fact that health insurance companies are in it to make money off of hospitals, physicians and patients. In this instance, the insurance company in question did not want Prem Reddy and his hospitals to provide healthcare liberally to their employees. Prem Reddy and his hospitals always have been good to their employees helping them the best way they can. In fact Prem Reddy admires Moore and SICKO movie for bringing out the truth about big insurance companies and supports the Universal Health Coverage Bill which will pay for the healthcare provided at hospitlas for uninsured and ingident patients, that currently the hospitals are not getting paid for.
Comment by Rep — August 7, 2007 @ 9:42 am
I agree that insurance company make money at the expense of hospitals and patients. But Dr. Prem Reddy makes money at the expense of patients.
In Summary:
All Medicare patients are discharged from Dr. Reddy’s hospitals soon as possible, many times with disregard to the severity of their illness. Because payment is the same regardless of the length of stay.
Patient’s with insurance that reimbuses hospital for daily rates are kept in hospital as long as possible. Dr. Reddy is angry whenever a patient is dicharged from the ER that has insurance. ER physicians are instructed to admit as many patients as possible even though they may not require admission to the hospital.
Uninsured patients are cared for by all hospital in which they are seen. Many times the care is limited because of their lack of insurance coverage.
What I have heard from Dr. Prem Reddy’s employees have been complaints about there Healthcare coverage and benefits, but I personally do not know the details of coverage provided.
Comment by Bill — August 7, 2007 @ 11:34 am
Bill, Obviously you are some one that has vested interests against Prime Healthcare. You seem to be trying hard getting lost in a wild goose chase. There are some of us that have worked all our lives to make a positive impact for people around us and then there are others that have nothing to show for. Day in and Day out we work and provide best healthcare for our patients.
Fact: Prime Healthcare has saved thousands of jobs at the hospitals that would have shutdown otherwise.
Fact: Prime Healthcare’s employees are happy and grateful to have jobs, steady payroll, great benefits, which is something that is cannot be taken for granted at other hospitals in California.
Fact: Prime Healthcare’s hospitals provide medical care to more uninsured patients and provide more charity care. See LA Times article referencing this publicly available data with the State.
Fact: Prime Healthcare’ hospitals have received several awards for providing top quality healthcare.
Fact: Prime Healthcare is saving California hospitals that are financially troubled and/or bankrupt.
Fact: Prime Healthcare is compliant with all Medicare regulations. Its hospitals receiving highest accreditation scores is a testament to it.
Perhaps you and your friend would do something productive with your lives than mocking those that are serving people.
Comment by Rep — August 10, 2007 @ 8:49 am
Rep — When you say that Prem supports the “Universal Health Coverage Bill,” are you referring to SB 840? The bill that Schwarzenegger, who Prem raises money for and gives lots of moolah to, has said he’ll veto?
Comment by Siel — August 10, 2007 @ 9:13 am
Unless those with differing opinions can “chime” in…how the heck is this a balanced conversation ? You may not be a fan of big hospitals, or MD’s..but they too have opinions, and have a right to those opinions…after all..they actually work, live and breathe in those big hospitals ! As a rule, I would say…walk in their shoes awhile…then spout off ! No, I am not an MD, or a medical care worker…just someone who thinks these types of blogs talk about free speech, but then rip apart anyone who might differ in opinion or thought…pretty small minded stuff basically. I have my own issues with the health care system being corrupt,but also know that there are alot of good MD’s and Nurses out their who struggle to survive a dog eat dog,ugly job situation…..it is the system that is broken…..if all the MD’s who hate it left…things would be worse than they are ! I think anyone who enters that field is crazy myself !
Comment by Scooter — October 3, 2007 @ 8:07 am
Scooter — Um, people with differing opinions CAN chime in, as evidenced by your comment. I am actually a fan of hospitals and MDs — we need them — I’m just not a fan of the current system under which hospitals and MDs can’t do the good work they can do. My sis is an MD, and she hates the current system. You’re very clumsily trying to equate a critique of our health care system as an indictment against all docs and nurses — a poor argument indeed.
You know, if you get to talk, and then when someone who disagrees with you rips apart your argument, you’re actually both practicing freedom of speech. Freedom of speech doesn’t mean you can spout idiocy and expect silence from those who disagree.
Comment by Siel — October 3, 2007 @ 7:01 pm
A quote by Theodore Roosevelt sums this up:
“TO EDUCATE A MAN IN MIND AND NOT IN MORALS IS TO CREATE A MENACE TO SOCIETY”.
This applies to all, insurance companies, physicians, patients !!!
Comment by S. Smith — December 4, 2007 @ 10:52 am