Feeding Frenzy : Organizational Deviance in the Texas Psychiatric Hospital Industry

Feeding Frenzy reports the methods used by for-profit Texas psychiatric hospitals to recruit patients. Henry Vandenburgh found the use of marketing techniques such as 'suction' intake departments, seeking to hospitalize at least 30 percent of callers prompted by magazine ads, and the use of professional patient finders who set up support groups for parents of unruly teenagers and received $1,500 bounties for each admission brought to hospitals in the late 1980's and early 1990's. He also found the funneling of payments of as much as $20,000 a month to doctors who provided admissions, and the use of marketing social workers, hired by the hospital as program directors to supervise patient care, who actually spend 70 percent of their time in the community asking for referrals. Vandenburgh uncovered many other tactics, including stationing counselors at public schools for no charge, who in turn attempted to direct as many adolescents with 'good' insurance coverage to the hospital. Many hospitals also provided similar services to probation officers and police officers. Teams from hospitals even visited emergency rooms to compete for potential patients by offering free assessments. Also, once patients were successfully admitted, program directors manipulated the doctors to avoid discharging them until their insurance resources were exhausted. Vandenburgh exposes these unethical practices through interviews with hospital employees, using statistical techniques that prove that the practice of furnishing high physician stipends was widespread and that it led to the delivery of patients. He also notes that payments were likely to be higher in markets where competition was strong.