The Healthcare Research & Development Institute, Pensacola, Fla., a private industry group, has agreed to cease operations as it now exists early this year and change its business model and membership makeup under an antitrust settlement with the Connecticut and Florida attorneys general, according to the Connecticut attorney generals office. HRDI also will pay a fine of $150,000, the Connecticut attorney generals office said. In a statement, Connecticut Attorney General Richard Blumenthal, who launched an antitrust investigation of HRDI about 23 months ago, said the settlement disbands an anti-competitive, secret society -- an elite and exclusive club -- of premier hospital executives and select healthcare supply businesses. HRDI agreed to cooperate and ultimately do the right thing, Blumenthal said. The for-profit company admitted no wrongdoing under the settlement. Blumenthal said the investigation is active and ongoing into vendors and others.
HRDI is owned by the chief executive officers of many of the nations leading hospitals. Historically, the group has brought together hospital executives and industry vendors at several conferences a year, with vendors paying $40,000 annually to be corporate members and hospital executives receiving $25,000 annually to participate. The purpose has been to exchange ideas, not sell products, HRDI has said. The group will restructure as a not-for-profit, the Health Education Network, financed solely by hospitals or healthcare executives. Under the settlement, vendors will be excluded for at least three years, according to Blumenthals office.
In an interview, Diane Appleyard, HRDIs president and CEO, said the group cooperated fully with the investigation. Appleyard said the decision to cease operations was not an aspect of the investigation. This has been very hard on many people in many different ways, she said. Shutting down and reorganizing just seemed like the prudent thing to do. HRDI, which has about 30 current individual members and 40 corporate members, also is the subject of a fraud investigation in Illinois. Appleyard said she hasnt heard from Illinois officials since August 2006.
Modern Healthcare is a former corporate member of HRDI. The magazine received and complied with a subpoena from Blumenthals office in 2005. -- by Michael Romano