MedInfo Health Line

Hospital Based Physicians in Managed Care

Some HMOs have developed hospital-based physician staffs to manage all inpatients. Although this has been touted as being more efficient, this is generally not the case.

A covering doctor, in the absence of the primary doctor, recently admitted a sixty-three-year-old patient to the hospital for exacerbation of bronchitis with respiratory failure. He noted that the chest x-ray report revealed a granuloma that was calcified; but the radiologist still suggested obtaining a CT scan for evaluation of this calcified mass in the RUL. The primary doctor’s history was incomplete since the patient remembers distinctly that in 1954 she was told she had a TB scar in her right chest. She would have told him the same if he had only asked.

The covering hospital doctor did indeed obtain a CT of the chest that confirmed a calcific density that needed no further confirmation. However, this did add another $600 to the cost of that hospitalization.

As the discussion that hospital-based doctors will be much more efficient in caring for the patient, we have to remain ever vigilant to prevent inferior care being implemented for business efficiency reasons. An office-based doctor who manages a patient will have a number of x-rays, laboratory tests and ECG’s in his private medical record to which he will add in a very cost-conscious manner when his patient enters the hospital. The hospital-based physician, however, must repeat some of this data in a higher-cost center in the name of high quality care, when it is simply duplication of prior care. But it will just make doctors subservient to the hospital-big business complex. Remember the industrial-military complex? It will pale by what is now happening in medicine. We must keep medicine a doctor-patient relationship, not a complex power play.

These messages were written in the years as noted and may be somewhat dated at this time. Please consult your physician or other health care provider.


Can Doctors Staff Privileges Disappear?

Can doctors lose their source of income in this Era of hospital mergers? Unbelievable, but yes. Let me tell you about a case that was so smooth that most doctors did not even get an attorney to protect their license-an investment, according to some estimates of a half million dollars of personal or parental funds or loans.

In one community in California, 200 bed hospital A purchased 100 bed hospital B. When they received the new license for the combined hospitals, hospital A and hospital B ceased to exist and a new hospital C was born. Rather than grandfather in the medical staffs of hospitals A and B, the new combined hospital C (which in reality was the team from hospital A) found an easy way to get rid of all undesirable physicians. This new hospital-new in license only since the physical plants of both continue to function as before-sent a letter to each member of the medical staff stating that their privileges would cease at a certain date. They were advised that they should immediately apply to the new hospital C. This meant new application forms, credentials, letters of reference and documentation of training. All the “favored doctors” were promptly given privileges in the new combined hospital C.

There were seven doctors who received brief letters that privileges could not be granted until further review. Two of the seven doctors obtained immediate legal counsel to represent them in this attempted professional homicide. The other five said they would wait and obtain legal counsel only if they were unsuccessful in the final review process.

The two doctors with legal counsel obtained prompt medical staff privileges. The other five were denied privileges. At this time they sought legal counsel. The lawyers told them that if they had represented them from the start they could have saved their privileges with as little as 20 hours of work or $6,000, precisely what the first two doctors experienced. Now they would need a retainer of $60,000 for 200 hours of work, and the chance of success would probably be less than 50%. If unsuccessful, an appeal to the courts would require at least $300,000 for the first 1000 hours.

But wait, there’s more. Each hospital is required to notify the National Data Bank of any adverse action. Attorney, David M Galie, formerly with the California Medical Board, has called the National Data Bank a permanent tomb for doctors, even for those who made administrative errors not medical errors or who fell out of favor with those in power for non-medical reasons.

It is important that physicians consider hostile activity from hospitals as attempted professional homicide and protect themselves accordingly, unless they prefer an “indecent burial” at the National Data Bank.

Three of the five doctors left town and found a new environment in which to practice. They were able to convince their new hospitals of their credentials and on last report were doing fine. The two that stayed in the community obviously never set foot inside a hospital again. They kept their license since the Medical Board did not see any professional problems. But they scratched a living doing non-mainstream medical jobs in convalescent hospitals and clinics. An unfortunate burial.


Doctors’ Jobs & Nurses Privileges

The surplus hospital beds have created a problem in down sizing. The real challenge is how to get rid of nursing staff painlessly without fear of retribution. Last month we told you how hospitals got rid of doctors. It worked so smoothly that they are using it on nurses.

In a recent merger, where the intent may have been to eliminate the competition and reduce beds and nurses simultaneously, the nurses were asked to “reapply” for their jobs. So if the hospital has 200 RNs and only needs 100, they can just hire the 100 of the 200 applicants they want. They can then offer the RNs lower positions, even an LVN position, reduce the wage to an LVN level and get RN services. One RN instructor was hired at a lower level but given the responsibility of teaching RNs, which was the level at which she was not “qualified” to work.

She actually took care of twelve patients instead of four and performed all the functions she did before. Not only did she do two to three times as much work, but the hospital was able to pay her about six dollars an hour less which is about a thousand dollars less a month.

Did that show up as reduced patient costs? Probably not. Although such information is difficult to obtain, patients come into my office with bills for outpatient laparoscopic procedures totaling in excess of 10,000 dollars.

As physicians, we are held responsible for 80% of the cost of health care because it is our pen that writes the orders. But we incur health care costs without ever being aware of a price manual. Hospitals could provide a price manual. But we are told that doctors would then become selective to the detriment of patient care. This is just a way of preventing what wouldn’t serve their purpose. Is there anyone else on the health care team that is more qualified to make that cost/benefit judgment? Doctors must take charge. Not only would it benefit our patients, it would also benefit our nursing colleagues.

I don’t need to tell you that our profession is under attack from many flanks. Just as we were beginning to comprehend what hospitals, medical boards, Medicare, and others were doing to us, we now have HMOs and MCOs (managed care organizations) to threaten our existence. In Sacramento, hundreds of doctors have been deselected–lost their ability to earn a living. We are all so busy that we are having difficulty keeping up with our colleagues in trouble. We are bringing you the horror stories as they are brought to our attention to open our eyes so that we will be cautious. If you agree, please tell your friends and colleagues to tune in every week to these messages. It’s cheaper to do that on a regular basis than pay for even one hour of attorney fees.

The first thing in survival is to know who is threatening you. After surviving, the next step in reforming health care is to become aware of the nuances in taking care of patients so that we don’t make the matter worse. Stay tuned to these and other messages in the public and professional interest.


A Doctor Sold His Soul

Dr Allen, an internist, who had a successful practice for over 10 years and even owned his own office building, was getting tired of all the hassles of private practice. He was tired of running an office, supervising personnel, doing medical billing, and a host of other things required to run an efficient office. He was tired of the HMOs telling him what to do. One day he was approached by an HMO who offered to buy his practice. He could then just practice medicine and not worry about all the things he did not want to worry about. They offered him a two-year contract at three-fourths of his previous income to be re-negotiated at that time. Since he didn’t have to worry about the administrative problems after hours, he thought this was a good deal.

Dr Allen was so elated with his new position he told all the tenants in the office building he owned that he was leaving his practice for the security of working for a very profitable insurance company. He advised them to do likewise. He assumed they could do that in his building.

Last month, rather than renegotiate a new contract, the HMO gave Dr Allen and 19 other of his associate doctors a notice of termination. Dr Allen, who felt he had lifetime security two years prior is without a job or income and has no practice assets. He has been treated like any blue collar worker. Would he go back to the bank and obtain another $50,000 practice loan to start again? Or would he just get a “job?”

This story is being repeated across the country every day. The once noble professional, which should never become beholden to anyone beside the patients we serve, is now beholden to an insurance company or HMO or hospital that looks at the bottom of the financial line and never at the patient’s health.

There is only one security for a physician and that is owning his own practice. In a free society, we should have no fear for we will always be able to attract patients. Now patients have to go to a specific doctor for reasons unrelated to their medical skills because their HMO has a contract with that particular physician.

Last week I had my annual physical examination. My doctor confided in me that he had just finished with a patient who needed an operation. After much soul searching, he felt his obligation to his patient exceeded that to his HMO. He told the patient that she needed an operation but he could not in good faith recommend any surgeon on her HMO panel. She would have to make her own choice. He understood the risk that could eliminate the 25% of his patients from that HMO should she inform them of his statement.

We have too few good men and women who still feel the obligation to those that seek their care rather than to society. When we are responsible to society and not to our patients, we will be no different than Napoleon III or Otto von Bismarck in the nineteenth century who used state control of patients to bolster their regimes, or Hitler who used physicians to choose which patients had lives worth living.


HMO Guidelines For Hospital Length of Stay

In the past few weeks, the press has pointed out many instances of HMOs forcing their guidelines on our hospital patients. Just when the brouhaha of sending mothers with their newborn infants home on the date of delivery has died down with a rash of laws to allow two days, instances of outpatient mastectomies have surfaced where women’s families have to provide rather basic and skilled nursing care. Many families are rather squeamish about managing the bloody drainage. But even more important, the risk for infection has increased greatly. This of course not only jeopardizes life, but will in the long run increase health care costs. When this was told to one HMO, the reply was that they were in it just for the short haul. They could not be concerned about ten years in the future or even about next year.

A professor at UCSF in a postgraduate class deplored that hospitals were no longer the Home of the Sick but rather just a way station. He cited examples of patients being referred to UCSF from remote parts of the state for kidney transplants. After two days, these patients go to nearby motels where family members do most of the nursing care. They report to the outpatient department daily until they are ready to return to their home in distant communities. The chance of complications including sepsis increases. That this can even happen, he felt, indicates that there is no physician in the medical institution directly in charge. The insurance carrier or HMO that pays the bill is calling the shots.

The fact that long-term health care costs don’t enter into the equations only points out the immediacy of the racket. HMOs are not in the business as a continuing long-term player. As George Anders of the Wall Street Journal has pointed out, doctors will eventually get this figured out. Meanwhile the HMO raiders will have made out like bandits just like the corporate raiders of the last decade.

As physicians, we must regain control of the heath care machine that is totally out of control before we’re replaced with bureaucrats, MBAs, physician assistants and health care workers developed by organized medicine to the detriment of our patient’s health. We might as well regain control, because the public holds us responsible whether we like it or not.


DRGs and Hospital Price Gouging

Where did the runaway health care costs originate? Why did the government and the business world get so involved in reducing costs? Where was the high-cost center that precipitated all this? Who was the culprit?

Hospital charges were so exorbitant that the government’s best efforts to control Medicare and Medicaid costs were to implement the DRG, or diagnostic related groups. The hospitals then gained experience with shortened hospital stays because they could make the same amount of money for a 3-day stay as for a 5-day stay, e.g. for a cholecystectomy to save two days of hospital costs.

If a three-day stay worked, why not a two-day stay? Why not a one-day, or even 23-hour stay? This would then bypass the federal DRG restrictions and the DRG for a gallbladder, which was $8500 a few years back and included an average of five hospital days, was bloated to $14,000 according to my patients. Why didn’t the doctors get up in arms about this?

Some doctors did but they were driven out of the system and some even lost their license. There was a ready-made system for hospitals and their favorite doctors to bloat their revenue. The PEER REVIEW system, ostensibly to weed out bad doctors, actually eliminated good doctors. Data suggested that over 70 percent of doctors eliminated because of “concerns” over their professional ability had no evidence of inferior practices. But the hospital “letters of concern” to individual doctors, as to why a certain test or procedure wasn’t done, caused doctors to order more tests and do more procedures than were necessary. This is how the hospitals initially made money. The favorite doctors were the ones that had the highest utilization costs for which the hospitals could charge a handsome profit.

When the DRGs came, the emphasis was then on short hospital stays with as few expensive tests as possible. Signs were posted, “Bed shortage, discharge early.” The “letters of concern” then went to doctors who didn’t get the patient out fast enough.

Although doctors were always considered to be in charge of the health care system, they really haven’t been during the last couple of decades since the HMOs and managed care organizations (MCOs) took over.


How Managed Care Happened

As the cost of health care jettisoned out of sight, something had to give. Managed care organizations sprung up and convinced the insurance companies that they could manage the insured patient’s benefits and even save the insurance company more money than their fee for the service. They would charge 15 percent for this and save the insurance company even more than their 15 percent fee, perhaps as much as 25 percent.

This occurred because these entrepreneurs noted a wide variation in what doctors spend on their patients, which of course comes from the insurance company. Some doctors would order more tests and treatments – sometimes 10 times more than other doctors. This is not unique to the US. It also occurs in countries with controlled government medicine. The logic went that if they could get half the doctors that are above average in costs down to the average, it would save about one-fourth of the health care costs.

But that may not have been the way it happened. Let’s take an ordinary headache that millions of people have. The primary GP or internist has to decide which of these millions just needs to take Tylenol or aspirin and which needs a brain scan to check on something more serious. I personally know some of the doctors at the top end of the scale. They are more skillful in convincing an HMO review nurse that their patient needs a CT scan, while the doctor at the low end of the scale is satisfied in simply telling his patient he tried to get one but the HMO or MCO denied it. Hence, the costs savings many have come from the low end of the scale rather than the high end as was predicted. Cheap care may have become cheaper and expensive care more expensive. The quality of care of the patients with articulate doctors didn’t suffer, but the patients with less aggressive but more sympathetic doctors got even worse care.

The point you have to remember is that when you obtain a health insurance plan that has a managed care organization distribute the funds, check further to see if you can upgrade to a plan without one. It costs me an extra $250 a month above the HMO rate to have a top-of-the-line plan. But still that’s less than half of the cost of running my car. And my body and mind are certainly much more valuable than my car. We do have to get our priorities in order.