The Dow Jones/Wall Street Journal on Tuesday examined "an emerging trend of hospital 'gain-sharing' arrangements with physicians," in which doctors share in savings achieved through greater efficiency in hospitals. In the late 1990s, the... HHS Office of Inspector General discouraged gain-sharing efforts, saying they could be used to disguise kickbacks. However, OIG recently approved several such proposals, and some experts say the approvals indicate an emerging trend as hospitals seek to reduce costs. The hospitals whose arrangements were approved expect to save 10% to 25% on costs through such efforts as streamlining medical-device purchases, scheduling operating rooms more efficiently and using supplies more effectively. Tennessee-based HCA, which is seeking government approval for a gain-sharing program, hopes to reduce costs for orthopedic supplies by consolidating purchases to two or three vendors and sharing the savings with doctors. An HCA spokesperson said, "The plan is to go forward and say, 'Listen, we're paying $100 today for this knee. If I can get it for $80 going forward, then $20 is my savings.' We are willing to share that and really align the incentives of both the doctor and the hospital." Proponents of such arrangements say they could improve quality of care, but critics worry that they could reduce doctors' flexibility in treating patients. Orthopedic surgeon Kevin Stone said, "The patients have no say, so it's like being the astronaut going up to Mars on the lowest bidder for each part of the space shuttle." He added, "Gain sharing is only acceptable to the degree that it doesn't lower quality of care" (Wisenberg Brin, Dow Jones/Wall Street Journal, 3/29).

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