Columbia Hca Medicare Scandal
Case Study: Columbia / HCA and the Medicare Fraud Scandal
Central Facts of the Case
X In 1997, Columbia/HCA Corporation was the largest health care company in the world
X In 1996, Columbia Hospital Corporation was named the ¡§Most Admired Company¡¨ by Fortune magazine
« Clearly they were a well-respected, well-trusted company not too long before they were raided, and during a time that they were under investigation (not known to the public at the time) for fraudulent activity
X Columbia was buying up as many hospitals and other health-related business as it could
X Became a public company in 1990
X Physicians were allowed to own a stake in Columbia/HCA hospitals
Major Overriding Issue / Related Questions
The overriding issue is that Columbia/HCA acted illegally and unethically in their dealings with the Medicare program. This raises the following questions:
X Should doctors be allowed to be shareholders in hospitals? Physicians are not allowed to refer patients to institutions, such as home-health providers, that they own a stake in ¡V should this law be extended to hospitals as well?
X Should hospitals / provider institutions even be allowed to be publicly-held, publicly-traded institutions?
X Is the government at all at fault for fraud at institutions that administer their Medicare programs, due to cut backs that may have led to weak enforcement of the program?
X Should a company be expected to abide by rules / regulations set forth by a program such as Medicare, without any outside enforcement?
X Was the compensation system employed by Columbia/HCA the best-suited for their organization?
X Was Board oversight sufficient ¡V could they have gotten involved sooner?
Evaluation of Company Actions
X Went public ¡V allowed physicians to be shareholders...
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