US Psychiatric Hospitals Make Huge Profits from Forced Admissions... Stock Prices Also Double

A major hospital corporation in the United States has been caught generating profits by not only forcibly hospitalizing patients but also by exaggerating symptoms and adjusting medication dosages to extend hospital stays, sparking controversy. The publicly traded hospital's stock price has more than doubled in recent years.

The New York Times (NYT) recently reported, after interviewing over 50 current and former employees, dozens of patients, and police officers, that one of the large psychiatric hospitals in the U.S., Arcadia Healthcare, has been profiting in this manner since the pandemic. Founded in 2005 by financier Reeve B. Wood, Arcadia Healthcare expanded its business following the Affordable Care Act and currently operates 54 inpatient hospitals with 5,900 beds nationwide.

원본보기 아이콘

According to the report, allegations have been made to relevant authorities that Arcadia is forcibly hospitalizing patients with mental illnesses through illegal methods. Even patients arriving at emergency rooms seeking routine treatment have suddenly been admitted. There were also claims that symptoms were exaggerated and medication dosages adjusted to keep patients hospitalized longer in order to claim insurance benefits, or that the hospital asserted patients were in poor condition when they were not.

While the hospital can forcibly hospitalize patients if deemed a threat, sources explained that relatively few patients actually met the proper legal criteria.

To emphasize that patients remained unstable and required continuous intensive care, the hospital reportedly trained staff to use terms like "aggressive" more frequently in medical records and to reduce the use of terms like "calm" and "compliant." Some employees revealed they were pressured to mark patients as uncooperative.

A former nurse at Arcadia’s Florida facility testified that "people who did not need to be there were being held." This led to several lawsuits filed by patients who strongly wished to leave and whose families deemed hospitalization unnecessary, resulting in court rulings ordering Arcadia to release forcibly hospitalized patients.

Additionally, testimonies revealed that Arcadia partnered with police and actively marketed to emergency rooms with many psychiatric patients to bring them to Arcadia. Those involved in these operations recalled, "This hospital was not the optimal facility," and "It felt unethical."

As Arcadia’s profits increased based on these practices, its stock price rose. The daily inpatient cost at Arcadia’s psychiatric wards reportedly reaches $2,200 (approximately 2.95 million KRW). On the Nasdaq stock exchange, Arcadia Healthcare’s stock price rose from the $30 range before COVID-19 to $81.93 on the 30th of last month, more than doubling. Arcadia responded by stating, "All decisions regarding patients at Arcadia are made based on quality care and medical necessity," and "We cannot acknowledge any actions that do not meet our strict standards."

© The Asia Business Daily(www.asiae.co.kr). All rights reserved.