Stark reality

On Feb. 9, 1989, amid considerable attention in the healthcare industry, Rep. Fortney H. ("Pete") Stark, D-CA, introduced in Congress the Ethics in Patient Referrals Act (H.R. 939). At the time, the so-called Stark bill would have effectively prohibited physicians from referring Medicare patients to any healthcare entity in which they had a financial interest, including hospitals, hospital departments, and physician-hospital joint ventures. The bill that emerged and was signed into law months later is but a shadow of its former self: The prohibition against physician referrals is directed only at certain clinical laboratories and certain relationships between physicians and the laboratories. Hospitals and physicians may be overly optimistic about the results of this most recent incursion into physician ownership. This was not the first government intrusion into physicians' financial affairs, and it is not likely to be the last. Congress will no doubt continue to focus attention on physicians and hospitals that seek revenues through joint investments in healthcare providers. In fact, Congress has already put referring physicians on notice, saying that if the Government Accounting Office finds evidence of inappropriate referrals, or increased Medicare costs, "it would be the intent of the relevant Committees to consider legislation banning referrals at the earliest possible date."