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BUSINESS OF
MEDICINE
sneak out at night and dig clams on the local beaches (which was lems, the court found that there was not fraud. All four of them were,
illegal). He sold enough of them to eventually buy his way out of no doubt, brilliant surgeons. But tragically one of them ended up
debt, and started a one wheel-barrow construction company. bankrupt. It didn’t need to end that way. You never have enough in-
Things went well for him until the great depression, but that’s a formation. And you can never eliminate all uncertainty. But take
story for another time. My point? Those four surgeons got them- stock of your own expectations, and be sure to do your due diligence
selves locked into the company store. and gather all of the salient information you can get. Your future
may, rather will, depend on it.
What happened was the hospital had not obtained adequate buy-
in from the local physicians who were critical as a patient referral Dana A. Forgione, Ph.D., CPA, CMA, CFE is the
base for these four newcomers. When the local docs didn’t refer Janey S. Briscoe Endowed Chair in the Business of Health
enough patients, the four surgeons got deeper and deeper into debt at the University of Texas at San Antonio. He is also an
to the hospital. They couldn’t leave, because it would trigger imme- Adjunct Professor in the School of Medicine, Department
diate repayment of all the loans, and they didn’t have enough money of Cardiothoracic Surgery, the Department of Pediatrics, and in the
to pay them off. And all their equipment and future receivables School of Public Health, all at the University of Texas. He previously
would be taken. And they couldn’t stay, because they were not mak- held a joint appointment in the School of Pharmacy at the University of
ing enough money to support their practices without drawing down Maryland, where he taught in the Doctor of Pharmacy program. His re-
even more on the collection guarantee loans. They were economically search interests are in international comparisons of healthcare payment
trapped. “I owe my soul to the company store.” So what did they systems, costs and quality of care, as well as financial management for
do? They sued the hospital for alleged fraudulent misrepresentation hospitals and physician practices.
of the economic prospects for their practices. While there were prob-
visit us at www.bcms.org 35
