Memorial Hermann Gets Wrist Slapped Over Anti-Trust Claims

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There's been a battle brewing for some time between the doctor-supported Town & Country Hospital and mega-health-care firm Memorial Hermann; the smaller hospital says the bigger one out of business.

They claim Memorial put pressure on insurers not to do business with competitors. "At the same time," the AGs office said today, "Memorial Hermann used its leverage to punish health insurers that established contracts with Town and Country."

The AG jumped into the fray today, filing a suit that resulted in an agreed, pre-negotiated settlement.

It's one of those "We didn't do anything wrong and promise we won't do it again" deals that lawyers love and the rest of us shake our heads at.

Memorial Hermann will pay $700,000 to cover the cost of the AG's investigation and will submit to five years of monitoring its business practices.

Says AG Terry Greg Abbott: "Today's injunction will preserve healthy competition and will help ensure that Houston-area patients have more hospital choices. Open competition on the free market amongst providers will help improve care, lower prices, and foster greater choices for patients."

But then again, says Memorial Hermann in a press release: "As a not-for-profit healthcare system, Memorial Hermann works diligently to steward community resources so that we can provide our patients the best available medical care. From a business standpoint, that means working with insurance companies, federal and state governments, and our vendors every day to ensure we negotiate the best possible contracts. Memorial Hermann's existing contracting practices are consistent with those outlined in the injunction, so we can readily comply with them."

Wow, it's quite the magical settlement.

We'll let you know what T&C's take on matters is when we hear back from them

Update: Here's the statement from T&C attorneys Rusty Hardin and Richard Zook:

"This is a huge victory for the doctors who built Town & Country Hospital, and for the general public seeking quality health care at competitive prices. The AG's office should be congratulated for taking such a bold, non-political action on behalf of consumers," says Hardin.

"Although the AG's findings validate our claims of unlawful conduct by Memorial Hermann, the doctors' civil case against Memorial Hermann is set for a jury trial in late March 2009," says Zook. "We look forward to showing the jury the entire story of Memorial Hermann's improper actions that damaged these doctors, their patients and the public at large."

-- Richard Connelly

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