I was chagrined at the unchallenged assertion by Scott Clark, the vice president and general counsel of National Surgical Hospitals, that If the issue at hand truly is one of conflict of interest, conflicts of interests are pervasive in the hospital industry (Physician owners to own up? June 4, p. 7). This constitutes a classic facts not in evidence ploy that attempts to hide the issues of physician ownership in specialty hospitals inside a false premise.
It is certainly true that dualities of interest are pervasive in physician-hospital relationships, but such relationships first have to be legal and second have to pass the smell test to determine if the otherwise legal duality of interest rises to the level of a material conflict.
It is precisely at this point that the Stark law draws the conflict-of-interest line for hospitals: physician ownership in a real (full-service) hospital is sufficiently dilutive and does not constitute a material conflict while physician ownership in a subdivision of a real (full-service) hospital is expressly prohibited. For example, the financial interests of heart doctors that invest in only the sweetest spot of the most lucrative heart services is so concentrated that their own referrals can move the profit needle of their heart hospital. That is a material conflict of interest, plain and simple.
It certainly doesnt pass the smell test when a cabal of (otherwise) competing cardiologists conspire to expropriate the revenue streams of the communitys full-service hospitals, selectively take the best patients back to their private game preserve and split the cash with the carpetbagger that arranged the deal for them.
John HornbeakPresident and chief executive officer
Methodist Healthcare System