The following article that I wrote was published in Medical Economics a few years ago. For those readers who feel that I am too critical of Henry County Memorial Hospital, this explains the foundation of my viewpoint. I have since found out about more shenannigans that the current and past administrations have been a part of as well as also personally being the subject of prejudicial treatment by my tax supported county hospital. More details to folow.
“Wish I didn’t know now what I didn’t know then.” Bob Seger 1980.
Thirty five years ago I believed in Santa Claus. Twenty-five years ago I believed in U.F.O.s. Fifteen years ago I believed that only bad doctors get sued.
Ten years ago I believed the following:
A community hospital is there to benefit the community, to serve the health care needs of those citizens, and to facilitate the access of patients to the community resources which best meet their health care needs.
I no longer believe any of those things.
In March, 1993 I arrived in New Castle, Indiana. I was recruited during my
residency by the community hospital to provide family physician services in their
community. I could join an existing group or the administration would use their financial and practice management assistance in setting me up in solo practice. It didn’t matter to them. The community needed more family physicians.
Those were exciting times. I chose to join the group and I was finally a real doctor in a real town taking care of real people. There were frustrations to be sure but overall it was a nice start to a rewarding career as a small town family doctor.
Not being a partner, I guess I shouldn’t have been surprised to find out through the grapevine that negotiations were under way for the hospital to buy out the practice in early 1996. Apparently the practice was not fiscally sound and was not going to be able to meet an upcoming financial obligation.
The hospital administration realized the importance of keeping family physicians in the community. They negotiated to buy the practice with the four partners working off their debt in a matter similar to the loan repayment program that the hospital had provided me.
My original contract was worded that as long as I remained a practicing physician in the community, the loan would continue to be repaid. My family liked the town, and I liked practicing medicine there. I had learned over the prior three years that I preferred autonomy and didn’t particularly play well with others.
Here was an opportunity, thrust upon me as it were, to start a solo practice. I already had an established practice and colleagues to help with coverage. All I needed was some financial assistance and practice management know-how to get started.
I figured I need look no further than the hospital. Just three short years ago the administration aggressively recruited me to help the community with the physician shortage which still existed. Surely a community hospital would do all it could to retain a Family Physician that wanted to remain in the community providing healthcare to citizens of the community. No problem.
Problem. I was given the option of signing a multi-year contract to work for the hospital or..... nothing. There was no other option. Staying with the group for six months while I made arrangements to secure my financial and practice management assistance elsewhere was not an option according to the administration.
Well, I wasn’t going to sign on a long term contract with the hospital and I wanted to stay in this town. I didn’t have any savings to live off of while I started a solo practice from scratch, so I became a moonlighter. I commuted out of town to an E.R., three urgent care centers, and served as a company physician.
I did this for nine long months while I educated myself in practice management, while I went to six different banks to finally get approved for a loan, and that only after jointly applying through the Small Business Administration, and while I tried to convince myself that my community was worth this stress. One lender was honest enough to tell me that since his bank did business with the hospital, they wouldn’t loan me the money for fear of alienating the community hospital.
Despite knowing of my plans, the hospital owned group would tell my previous patients that I had just up and left town and that they should see one of the groups other doctors. A four week wait wasn’t all that long to see a doctor for a problem, was it?
I opened in April of 1997. A solo family practice doctor with walk-in availability open seven days a week 1 to 7 p.m.. Letting bygones be bygones, I invited the hospital administration to the open house. No one came.
I still admit patients to the hospital, I still see patients at the nursing homes, I still serve as the doctor for the county jail. I still try to do what’s best for my patients which happen to live in my community which happens to have a hospital which happens to be a non-profit, community funded hospital.
Over the last six plus years I have re-learned the definition of a community
hospital is a hospital that is located in a community it is not a hospital that exists for the community.
3/23/07
3/11/07
DO NOT PASS GO
I think that monopolies in the health care industry are bad for patients. They are bad when they involve health insurance companies. They are bad when they involve physicians. And they are bad when they involve hospitals. They are bad on a national level. They are bad on a regional level. And they are bad on a local level.
Now I am not referring to monopolies in a legal sense as those are already outlawed. I am referring to monopolies in a practical sense; those that drastically limit patients' choices.
When there are fewer choices, prices go up and service goes down. Competition is necessary and good for customers. It is well documented that when banks consolidate, their fees to customers increase. I will let you be the judge of what sort of service you feel the Bureau of Motor Vehicles provides as an example of a business with a monopoly.
In health care, when a market is controlled by few insurance companies, these same trends occur when it comes to prices and services. Not only does this limit options for the patient, it limits doctors' ability to get a fair shake from the insurance company. If one company insures most of the patients in a geographic area, a physician risks losing all those patients unless he capitulates to the demands of the insurer.
Because it is illegal for independent doctors to collectively bargain as a group with the insurance companies, these insurers have enormous leverage in contracting with physicians. This is one of the main reasons doctors are forming larger and larger groups. The balance of power can be restored if most doctors in one area are part of a single group. The insurance company needs to provide its subscribers with area physicians as much as the area physicians need to be able to accept the patients' insurance. It is easy for an insurer to leave a single physician out of its network. It is much more problematic to do so to a large group of doctors.
The doctors benefit financially from these larger groups as they can negotiate a higher reimbursement from the insurance companies. The patient is left with fewer choices and higher prices. This is clearly happening on a regional level as evidenced by specialists such as cardiologists and orthopedists continue to consolidate into larger and fewer groups.
Unfortunately, this is also happening on a local level. Twelve years ago, the New Castle Clinic was the largest group in town with four internists and two general surgeons. The next largest group was New Castle Family Physicians with five doctors. All the other doctors in town were either solo practitioners or in with a single partner.
Ten years ago Henry County Memorial Hospital bought out New Castle Family Physicians and made those doctors employees. All except for one independent, intrepid individual who went on to successfully start his own practice on Spiceland Pike.
Since then, like a cancer that is inevitably spreading, the hospital has taken over almost all other doctors' practices in New Castle. First were the family practitioners, then the OB/Gyns, the orthopedists, the pediatricians, and finally the internists and general surgeons. Currently there are only three full time doctors with offices in town that are not hospital employees.
As inpatient revenues declined, the hospital looked for other areas to increase cash flow. Henry County Memorial Hospital delved first into the visiting nurse market, then the hospice market, the pharmacy market, the assisted living facility market, and finally the urgent care market.
While ensuring a captive market, a free market has largely disappeared. This translates into less freedom for the patient. Although the same doctors are still available and most patients may not be able to discern any difference from when the doctors were self-employed to now that they are hospital employees, differences do exist. Some are subtle, some are not.
There exists certainly the appearance of a conflict of interest when your hospital employed physician directs you to a physical therapist, a pharmacist, a visiting nurse, or a hospice. Is the referral based solely on the needs of the patient? Or is it influenced overtly or subtly by what's in the best financial interest of the doctor's employer.
Now most of the doctors that are employed by the hospital are honorable people, but to believe that a referral is not influenced by that relationship is naive. Only by the doctor not having any vested interest in any of these health care entities can the patient be assured that said referral is based solely on what is in their best interest.
There is also a distinct lack of competitive pricing when the majority of physician offices are run by the hospital. As I discussed elsewhere, this matters little to the patient with insurance but to the cash paying patient there is less ability to negotiate a fair price for a service. To a large entity like a hospital there is a lack of incentive to provide accommodations as an individual patient is less valuable.
Just as the doctor is an employee, so too are the staff at the offices. There is less accountability to the physician from the staff as opposed to the situation in a doctor owned office. In any business there exists the inevitable bureaucracy and lack of efficiency as the highest levels of management becomes further and further removed from the finished product. The patient bears the brunt of this in trying to get health care and billing questions answered as well as trying to deal directly with people who are empowered to make the decisions necessary to address unique situations and problems. Customer service becomes such a monumental problem that outside consultants are paid to teach basic skills to employees and to provide self-congratulatory press releases based on bogus surveys.
Locally, the analogy with Wal-Mart comes to mind. While Wal-Mart does not buy out competitors, it does eliminate them and reduces local shopping options to customers; options not just for department store items but also for groceries and pharmaceuticals. But at least with Wal-Mart you get low prices.
Now I am not referring to monopolies in a legal sense as those are already outlawed. I am referring to monopolies in a practical sense; those that drastically limit patients' choices.
When there are fewer choices, prices go up and service goes down. Competition is necessary and good for customers. It is well documented that when banks consolidate, their fees to customers increase. I will let you be the judge of what sort of service you feel the Bureau of Motor Vehicles provides as an example of a business with a monopoly.
In health care, when a market is controlled by few insurance companies, these same trends occur when it comes to prices and services. Not only does this limit options for the patient, it limits doctors' ability to get a fair shake from the insurance company. If one company insures most of the patients in a geographic area, a physician risks losing all those patients unless he capitulates to the demands of the insurer.
Because it is illegal for independent doctors to collectively bargain as a group with the insurance companies, these insurers have enormous leverage in contracting with physicians. This is one of the main reasons doctors are forming larger and larger groups. The balance of power can be restored if most doctors in one area are part of a single group. The insurance company needs to provide its subscribers with area physicians as much as the area physicians need to be able to accept the patients' insurance. It is easy for an insurer to leave a single physician out of its network. It is much more problematic to do so to a large group of doctors.
The doctors benefit financially from these larger groups as they can negotiate a higher reimbursement from the insurance companies. The patient is left with fewer choices and higher prices. This is clearly happening on a regional level as evidenced by specialists such as cardiologists and orthopedists continue to consolidate into larger and fewer groups.
Unfortunately, this is also happening on a local level. Twelve years ago, the New Castle Clinic was the largest group in town with four internists and two general surgeons. The next largest group was New Castle Family Physicians with five doctors. All the other doctors in town were either solo practitioners or in with a single partner.
Ten years ago Henry County Memorial Hospital bought out New Castle Family Physicians and made those doctors employees. All except for one independent, intrepid individual who went on to successfully start his own practice on Spiceland Pike.
Since then, like a cancer that is inevitably spreading, the hospital has taken over almost all other doctors' practices in New Castle. First were the family practitioners, then the OB/Gyns, the orthopedists, the pediatricians, and finally the internists and general surgeons. Currently there are only three full time doctors with offices in town that are not hospital employees.
As inpatient revenues declined, the hospital looked for other areas to increase cash flow. Henry County Memorial Hospital delved first into the visiting nurse market, then the hospice market, the pharmacy market, the assisted living facility market, and finally the urgent care market.
While ensuring a captive market, a free market has largely disappeared. This translates into less freedom for the patient. Although the same doctors are still available and most patients may not be able to discern any difference from when the doctors were self-employed to now that they are hospital employees, differences do exist. Some are subtle, some are not.
There exists certainly the appearance of a conflict of interest when your hospital employed physician directs you to a physical therapist, a pharmacist, a visiting nurse, or a hospice. Is the referral based solely on the needs of the patient? Or is it influenced overtly or subtly by what's in the best financial interest of the doctor's employer.
Now most of the doctors that are employed by the hospital are honorable people, but to believe that a referral is not influenced by that relationship is naive. Only by the doctor not having any vested interest in any of these health care entities can the patient be assured that said referral is based solely on what is in their best interest.
There is also a distinct lack of competitive pricing when the majority of physician offices are run by the hospital. As I discussed elsewhere, this matters little to the patient with insurance but to the cash paying patient there is less ability to negotiate a fair price for a service. To a large entity like a hospital there is a lack of incentive to provide accommodations as an individual patient is less valuable.
Just as the doctor is an employee, so too are the staff at the offices. There is less accountability to the physician from the staff as opposed to the situation in a doctor owned office. In any business there exists the inevitable bureaucracy and lack of efficiency as the highest levels of management becomes further and further removed from the finished product. The patient bears the brunt of this in trying to get health care and billing questions answered as well as trying to deal directly with people who are empowered to make the decisions necessary to address unique situations and problems. Customer service becomes such a monumental problem that outside consultants are paid to teach basic skills to employees and to provide self-congratulatory press releases based on bogus surveys.
Locally, the analogy with Wal-Mart comes to mind. While Wal-Mart does not buy out competitors, it does eliminate them and reduces local shopping options to customers; options not just for department store items but also for groceries and pharmaceuticals. But at least with Wal-Mart you get low prices.
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