Wednesday, March 09, 2011

"Cogs in the Corporate Machine" - More on the Plight of Corporate Physicians

We discussed last week some of the perils of the latest trend towards the corporatization of medicine, practicing physicians becoming employees of hospital systems, including for-profit corporate systems.  A recent article in Medscape Business of Medicine included a striking anecdote about the life of a corporate physician.

Controlling Referrals by Contractual Provision
It started with the revelation that some employed physicians may sign contracts that obligate them to refer patients within the corporate system, even if that is not in their best interests:
Victoria Rentel, a family physician in Columbus, Ohio, joined a hospital-owned group several years ago. At first, nearly everything went fine. There were a few glitches: she'd occasionally order tests or consults at competing facilities, either for patient convenience or because of health plan coverage. When the hospital's administrators found out, they told her it was a violation of her contract; but that didn't stop her because she knew the hospital never enforced this provision.
A Non-Compete Clause, Even for a Laid-Off Physician

It also included the observation that corporate physicians may be abruptly laid off. Worse, being laid off means having to leave town, because apparently even laid-off physicians are still obligated by non-compete clauses in their contracts:
Then, out of the blue, she was informed that the hospital was going to close her practice within 45 days. She knew this wasn't her fault; the recession had hit the hospital hard, and it was laying off nearly half of the primary care doctors in her group. Still, it was a hard pill to swallow.

Making matters worse, her contract's noncompete clause prohibited her from going to work for any of the other healthcare systems in town. To avoid legal sanctions, she joined the student health service at Ohio State University.
Signing Contracts Without Understanding Them
The article's introduction emphasized the problem of physicians signing onerous contracts, perhaps without fully understanding them or without getting adequate legal advice:
Many other physicians -- especially those who, like Rentel, were previously in private practice -- complain about their jobs. In some cases, it's because physicians rushed into the arms of a hospital without looking carefully at their contracts or asking the right questions during their job interviews.
Cogs in the Corporate Machine

The introduction ended ominously:
Ultimately, the loss of control over their own professional lives is what irks employed doctors the most if they used to be in private practice. But some doctors also get the sinking feeling that they've become cogs in the corporate machine.

'The reality is that when you work for a hospital system, you're a service line,' says Rentel. 'And because primary care reimbursement is relatively low, you're a service line that feeds more lucrative service lines.'

Oddly enough, after that striking beginning, the article peters off into a discussion of some "gripes of employed physicians," which either soft-pedaled or failed to include the issues listed above.

The specific issues, and the general response of physicians to their role as corporate wage slaves deserve further consideration.

Signing Bad Contracts

First, the notion that physicians frequently sign contracts, particularly such important contracts as their own employment agreements, without reading them, without clearly understanding them, and without obtaining competent legal counsel is very disturbing.   A physician who signs a contract without reading it, understanding it, and getting competent legal advice about it is at best naive to the point of foolishness. 

My late father, an attorney, done told me to "never sign a contract you haven't read and understood."  Contracts are - surprise - enforceable legal documents that may involve surrendering important rights.  One should never sign a contract without being satisfied that its benefits outweigh its harms.

It could be that physicians who so blithely sign contracts are exhibiting learned helplessness.  Maybe they feel somehow pressured to apparently voluntarily agree to doing something that ultimately will harm them.  I am not sure that simply declaring on a blog that we will have to unlearn our helplessness if we are ever to save medicine and health care will do much to solve what may be a fairly deep problem.  But we must do so.

In addition, contracts are valid if entered into voluntarily.  It may be that some physicians truly sign contracts under duress.  Those contracts may not be valid, and could be challenged if they were so signed (again, if physicians are willing to unlearn their helplessness enough to get the counsel of a competent attorney.)

Stopping "Leakage" Possibly Unethically, Maybe Illegally?

The physician in the example above apparently had a contract provision which was violated simply by referring patients to competing facilities.  This appears to be an extreme way for a hospital to deal with the problem of "leakage," that is, the financial problem to the hospital caused when patients are referred outside the system.  Note that we discussed (here and here) the example of a for-profit hospital system with a large number of physician employees pushed to choke off "leakage" of patient referrals outside the system.

Although leakage may pose financial problems for hospitals, fighting leakage may lead to ethical problems.  Physicians are supposed to decide how to manage patients, and specifically to decide where to refer patients in the patients' interests, not just to keep money flowing to the health care system. "Leakage reduction" may possibly threaten physicians' first commandment, to make decisions to maximize benefits and minimize harms to individual patients, before all other considerations.

Worse, in the example cited in the Medscape paper, the leakage reduction was apparently implemented not by just trying to persuade doctors to keep patients within the system, but by a contract provision that somehow forbade referrals out of the system.  That may have not only been unethical, but it could have been illegal.  

The "Stark Law" (Title 42, Chapter 7, Subchapter XVIII, Part E, Section 1395 of the US Code) generally prohibits basing referral decisions on payments.  Full-time employed physicians are exempt from some of its provisions, but only if the physicians' "amount of remuneration under employment" "is not determined in a manner that takes into account (directly or indirectly) the volume or value of any referrals by the referring physician."  Therefore, were the contract referred to above to have forbidden outside referrals on pain of termination or reduction in remuneration, it could potentially violate this law. 

There have been rumors that physicians have been pushed to sign contracts that could so violate the Stark Law, but the published example above makes this a real possibility.

Physicians ought not to sign contracts that seem to limit referrals under penalty of pay reduction or termination, which may be both unethical and illegal.  Any physician presented with or who has signed such a contract ought to consult a competent attorney.

If hospitals and hospital systems are trying to force physicians to make referrals based on the hospitals' financial advantage instead of in the best interests of patients, that is reprehensible.  If these organizations are trying to do so via contractual provisions, this deserves investigation, including investigation by the relevant law enforcement agencies. 

Don't Be a Corporate Cog

This article underscores my previously expressed fears about how making physicians into corporate employees may remove the last barriers preventing patients from becoming corporate financial cannon fodder.  Physicians' most central professional value is to put patients' interests first.  Practicing physicians who practice as corporate employees are at risk of being pressured, or even threatened under the cover of contract enforcement to put their corporate employers' revenues ahead of patients' interests. 

Physicians should not let their patients, and their own values be so threatened.  Physicians who have inadvertently, foolishly, or under duress signed contracts that could threaten their professionalism and their patients' welfare need to do the right thing and challenge these contracts, or else there will soon be nothing left of the medical profession, and no one left to ethically care for patients. 


Anonymous said...

In casual conversation and observation I have found that the medical schools promote this type of behavior, learned helplessness. Often we find that medical students, on the whole nice folks, sometimes lack social skills, one being a fair amount of skepticism.

Universities sell medical school tuition as simply a small investment for a life long professional income. During their time at the university they are repeatedly told how they are the brightest. Graduation brings a desire to make up for lost time in terms of lifestyle; a large number of upper end homes in Columbus are bought by brand new physicians, and a crushing student debt.

Having relied on the university for guidance they all too readily sign contracts feeling that as a professional they both have the knowledge to handle this situation, and no one would take advantage of their professional standing.

We have failed them both academically and socially by not preparing them for the business realities of medicine. They need to be told the simple truth that they have the ability to generate large amounts of cash flow for their organization, and people will look to take advantage of this ability.

A very, very old sales management trick is to load a worker up with debt, not wishing to fail they will work harder and engage in actions they might not otherwise contemplate in order not to fail. Doctors are not use to failure and with a crushing debt and they become susceptible to manipulation.

Sadly we have allowed corporate medicine to take advantage of these young doctors with the goal of increasing profits for the organization.

Steve Lucas

Anonymous said...

Seeing this is Western PA.

Hospital recently tried to close a deal to "give" a 6 MD owned practice to a private group in the community that needed more primary care docs (after THOSE docs were forced out and took jobs with a local university based system).

When those 6 docs would NOT sign, the practice was "closed" by giving the space away to the other private practice, NO real continuity was offered to the patients except "coming" to sign for records.

I know... even though I am a solo independent (and will NEVER NEVER NEVER work for another hospital OR HMO again -- did so for 14 years, on my own for the last 7)... I was ONE OF THOSE PTS.

And they wanted to charge me for my own records "unless" I sent them to another doc -- so will have them sent to ME, a licensed physician in the state.

Independent practice IS the best practice for the patients...AND the docs.

But you have to want to run the practice too, not just complain.

Dr Matlev, FP solo in Western PA since 2004
Residency completed in 1988