Closing MCP Hospital: A Case Study How Health Care Organizations' Interests May Conflict with Physicians' Values

Some of the issues on interest to Health Care Renewal readers have been getting a lot more attention in scholarly health care and medical journals. This is a good problem to have, but I am struggling to keep up with the recent relevant publications. It may take me a while to get caught, but I am starting now....

An issue that came up a lot when I interviewed physicians back after the turn of the century about what they thought was wrong with health care [see results in Poses RM. A cautionary tale: the dysfunction of American health care. Eur J Int Med 2003: 14: 123-130 here]. An overriding concern was how health care is increasingly dominated by large organizations whose interests may conflict with physicians' core values.

In the March issue of Academic Medicine appeared an illuminating case report on this topic. [Klasko SK, Ekarius JC. Collision course: the privatization of graduate medical education at one university. Acad Med 2007; 82: 238-244 here]

The case arose when Tenet Healthcare, the owner of MCP Hospital [MCPH], one of Drexel University College of Medicine's [DUCOM] main teaching hospitals, decided to shut it down. The article clearly indicated how the interests of Tenet and its top hospital managers conflicted with the academic mission of the College of Medicine. It also indicated how the funding of US graduate medical education [GME] (that is, the training of interns and residents) is disconnected from the academic needs of the trainees. Some key quotes, (re-ordered), first on the conflict between the hospital's interests and the medical school's mission:

For an investor-owned company, the business mission is clear: maintain and enhance the company’s value to the shareholders. Although it would be naïve to argue that financial pressures have not placed similar pressures on not-for-profit academic institutions, the admonition that we often receive as deans to 'remember our mission' is well stated.

We recognized that Tenet and DUCOM [Drexel Univesity College of Medicine] had very different priorities when it came to the maintenance and growth of GME. ... the residents were viewed as employees by many of the financial operatives at Tenet and were subject to the same actions that would be taken by an investor-owned company that needed to reduce its expenses.

[There is] a common battle that remains under the surface in most GME programs where the hospital entity is not part of the same system as the university entity: Where do we invest our residency resources, and where do we allocate, or reallocate, our cap numbers—in the most academically relevant specialties, or in those specialties that will have the greatest financial benefit to the hospital? This dichotomy quickly came to the fore when hospital and medical school leaders disagreed about who was responsible for making that decision. In the mind of the Hahnemann hospital CEO, the decision was his to make; after all, the residents were his 'employees.' In the mind of the dean’s office, there was a clear academic accountability issue; after all, the residents were 'students.'

The actions of the Tenet leaders in this case appeared in conflict with the academic mission of their own teaching hospitals (and of the medical school).

Then, on the disconnect between the funding of graduate medical education and the academic mission:

Once the political tug of war began over the fate of MCPH, the disconnect between the hospital’s funding source (the CMS [Center for Medicare and Medicaid Services]) and its accrediting body (the ACGME [Accreditation Council for Graduate Medical Education]) became apparent.

In every discussion with Tenet, federal officials, and representatives of the Commonwealth of Pennsylvania, the 'sale' of MCPH was contingent on the flow of funds that followed the residents. The perception that the residents were part of the 'deal' was in large part driven by federal and state public officials and potential hospital purchasers during their discussions with CMS.

For-profit hospital operators continue to act as employers of medical residents across the nation, and there continues to be a disconnect between residency programs’ funding sources and funding recipients (the CMS and hospitals) and between residency programs’ accrediting body and their academic entities (the ACGME and universities). Currently, for example, universities are experiencing increasing pressure from the ACGME and individual resident review committees (RRCs) to increase program directors’ protected time. Unfortunately, many of the academic organizations feeling that pressure do not control the flow of funds from the hospital entities. Residency numbers, physician supply, and service versus education continue to be hotly debated topics in GME programs across the country.

So, at least in some cases when teaching hospitals are administratively distinct from medical schools, the managers of these hospitals may put financial concerns ahead of the academic mission. Furthermore, these managers seem to feel entitled to the federal Medicare money that funds graduate medical education, without feeling accountable for how that money is spent.

Clearly this illustrates how some of the leadership of the large organizations that now dominate health care have interests that may conflict with physicians' values.

The article by Klasko and Ekarius showed how the medical school was able to preserve its residency programs even after the closure of the hospital. But often conflicts between large organizations' interests and physicians' values are often not easily resolved.