The recently published special advisory bulletin issued by HHS' inspector general's office, which was referenced in "Gain-sharing illegal" (July 12, p. 12), defies logic, and it should be challenged.
Hospitals have only limited ability to control costs without the active assistance of the medical community. Physicians are under enormous economic pressures. Many physicians do not see the personal benefit of spending their time and energy working on cost reductions for the hospital. In addition, doing so consumes much of their practice time.
Gain-sharing is one way of aligning the interests of the hospital and the physician. It allows the hospital and the physician to share savings they generate together. The inspector general's opinion even says gain-sharing is beneficial.
A close reading of the opinion shows that any arrangement that allows physicians to benefit by reducing hospital costs could also be in jeopardy. For example, most physician-hospital organizations include hold-backs and other ways physicians can share in hospital cost reductions. The same is true for PPOs and for provider-sponsored organizations and health plans. Would not the same logic outlaw package pricing?
The inspector general has demonstrated poor judgment by attacking the efforts of providers. The opinion is bad law, and it should be withdrawn.
Apache/National Health Advisors