Hospital group rejects system and cashes in - the story of Prime Healthcare and Dr. Prem Reddy

From cardiologist to hospital and healthcare mogul.  BD

At a public hearing in Anaheim last month to determine whether Prime Healthcare can acquire Anaheim Memorial Medical Center, dozens of residents, community activists and other critics spoke out against the pending sale.
One speaker cited a federal report from early June that detailed how, days after the company took over Paradise Valley Hospital near San Diego, hospital administrators allegedly changed patient care directives — including canceling chemotherapy services and requiring doctors to get prior authorization for cardiac treatment without alerting the medical staff beforehand.

When Reddy and his company's billing and patient care practices were described to him in an interview, Dr. David Goldstein, director of the USC Pacific Center for Health Policy and Ethics, said he worried that the company's business model ignored the medical profession's responsibility to care for all patients equally.

Reddy said his decision to wage battle against private health insurers was triggered by a mix of confidence and necessity.

"Somewhere along the line, the insurance industry has gone bad," Reddy said. "They want to pay $1,100 a day for patients that cost $1,700 to treat. They are bilking the system and getting rich at everyone else's expense."
While in his office one night, Reddy had an idea about how to make Desert Valley profitable. If his company canceled the hospital's private insurance contracts, it might be able to make up for the loss in patients by increasing traffic through the emergency rooms and admitting those who needed more care into his hospitals for longer stays.

This month, Reddy said, the company is expected to announce "a major acquisition" that could include a large hospital in Los Angeles, and Reddy recently expressed interest in two large hospitals in Orange County.

However, insurers, who have been criticized in recent years for raising patient premiums while restricting care, say they have found a tenacious adversary in Reddy.
"His policies will equate to higher premiums and higher cost of care for everyone," said Josh Valdez, senior vice president of Blue Cross of California, which reluctantly pays Prime Healthcare's bills. "People of California are not going to stand for it."

Hospital group rejects system and cashes in - Los Angeles Times