Would You Like Fries With That? - The Fast Food Model for the Corporate Physician

Allegations that suggest the continuing degradation of the professionalism of employed physicians just appeared in the Palm Beach (FL) Post.  A former physician employee of Solantic Urgent Care, a for-profit chain of urgent care clinics, described to state investigators the life of employed physicians there.

Putting Revenue First

Physicians answered to managers who put revenue first:

Thirty-something business graduates lacking in any medical training supervised the clinics' doctors and were encouraged to maintain an adversarial relationship with them, Prokes said.

Those clinic managers' raises and bonuses depended on their achieving ambitious goals for patient visits, labor and overhead costs, per-patient revenues and customer satisfaction.

Prokes said clinic manager turnover was high, and a succession of managers wrote him up for a variety of infractions: arriving five minutes late, failing to suggest Solantic's pharmacy at three points of contact and suggesting a patient might want to return later, when there would be less of a wait.

As is common elsewhere, there was pressure to see as many patients as possible:

Prokes told state investigators that he found the atmosphere increasingly untenable, as he was pressed to see 70 to 90 patients each day.

'They actually told us not to sit down for 14-hour shifts,' Prokes told state investigators. '[Former Solantic CEO Rick] (Scott) does not care about the quality of medicine. They care about how fast you see people.'

A Business Model from the Fast-Food Industry

A former Solantic executive admitted that the business model came straight from the fast-food industry:

[Former Solantic Chief Operating Officer Shaun] Ginter said the retail concept that he, Scott, and then-CEO Karen Bowling created drew on lessons from the fast food and other retail industries. Counters were built at standing height, for example, because it speeded workflow, he said.

'The culture, the workflow, were all streamlined for a more efficient delivery, a more efficient method of care,' said Ginter, who had previously managed drug stores with small clinics within. 'The name of the game is keeping your costs tight, and Rick, Karen and myself were very focused on keeping costs down.'

Up-Selling Unneeded Services

Just as in the fast food industry, the help was expected to up-sell. In particular, Dr Prokes charged that physicians were strongly pushed to suggest services patients did not need, but that brought in more revenue:

Doctors were monitored with cameras in the clinics' common areas, [Dr Randy] Prokes told investigators. Staff were expected to suggest extras, including vitamins and probiotics, and a colon cancer screening test considered unreliable and outdated by CDC officials.

The Background: Rick Scott, Columbia/HCA, and the State of Florida

Note that Rick Scott just sold Solantic LLC to private equity group Welsh, Carson, Anderson & Stowe, per the Jacksonville (FL) Business Journal. Note further that Scott was the former CEO of Columbia/ HCA, which ultimately paid a huge fine for fraudulant practices:

John Schilling was working as reimbursement supervisor for Columbia/HCA's Southwest Florida division, where he oversaw Medicare and Medicaid compliance and the cost reporting.

'Before HCA, when it was just Columbia, the CEOs of the hospitals were making up to 100 percent of their salaries as a bonus; the CFOs made 50 percent. Even some of the directors were making 25 percent bonuses,' Schilling said.

It drove a do-anything-to-make-the-numbers mentality, he said. Schilling now runs a firm called Ethics Solutions, where he helps potential whistleblowers.

'There were no incentives for being in compliance with Medicare and Medicaid rules,' Schilling said. 'It was about, how are we going to make it profitable, and if we meet our goals, it means we get our bonuses.'

He found that the hospitals in his area kept two sets of books. The one for Medicare auditors showed inflated costs, so that hospitals could justify higher reimbursement rates to take advantage of a funding formula that has since changed.

The hospitals also kept 'real' books with different numbers. The discovery put him in an ethical bind, he said. When he took his concerns to a supervisor, he was told not to rock the boat. Ultimately, his whistleblower lawsuit proved among the most damaging to his employer, which eventually paid $1.7 billion to the federal government to settle criminal fraud and abuse charges.

Scott, who wanted to fight the charges rather than settle, was never charged, and said he was unaware of what his managers had been doing.

After Scott left Columbia / HCA, he used the riches he acquired as its hired executive to help fund an ultimately successful campaign for the governorship of Florida, his current office. (See posts here and here.)

Summary

We have previously posted, most recently here, about how physicians are increasingly becoming employees of for-profit corporations. We have discussed other instances in which such corporations are appearing to pressure physicians to provide "care" to patients in such a manner as to increase corporate revenue, whether or not it is good for patients. We noted that when insurance companies hire physicians, they are likely to push them into providing less care across the board, since the insurers are paid per patient, not for what is done to each patient. When hospitals, hospital systems, and other entities that directly provide care hire physicians, they are likely to push them into channeling patients to get tests, drugs, and procedures for which the corporations are most highly paid.

In this current case, the allegations fit the latter pattern. Furthermore, At least one former executive admitted that "the name of your game is keeping your costs tight," not providing the best patient care.

There is more and more evidence that doctors who provide direct patient care as employees of for-profit corporations, and possibly other large organizations, are being increasingly pushed to put corporate revenue ahead of their patients' best interests. It should be obvious that this is unethical. Doctors swear oaths to put their patients' interests first.

Patients should be extremely wary of the care provided by doctors who are employed by large organizations. Doctors should be extremely wary of working for such organizations to provide direct patient care.

Below, I have repeated my humble suggestions from last week, with some additions, for

What Is to Be Done?

Patients:
- Find out if their physicians are employed, and if so, by whom.
- Find out what incentives their physicians have, if employed, to recommend more or less care of certain types.
- Find out whether other aspects of the physicians' employment arrangements, e.g., contractual confidentiality clauses, could affect his or her relationships with patients
- Avoid doctors employed by for-profit companies who have incentives to provide more or less care than what may be best for the patient

Physicians:
- Do not accept any employment offer or contract which has incentives to provide more or less care than is best for individual patients
- Who are already employed disclose to their patients such employment, and any incentives it may provide to provide more or less care
- Urge professional societies, and certifying and accrediting organizations to further investigate threats to physicians' professionalism arising from employment, and develop strategies to mitigate such threats

Policy-makers:
- Rapidly investigate the extent that for-profit companies whose revenues depend on physicians' decisions are hiring physicians to take care of patients, and the incentives and influences that these companies use to affect physicians' decisions
- Develop regulations that force disclosure of all such employment and relevant incentives and influences
- Consider further regulation of organizations that so employ physicians
- Consider whether such "commercial practice of medicine" ought to be once again banned.

ADDENDUM (12 July, 2011) -  See also this related post on KevinMD.

Ousted CEO of Columbia/HCA Now Runs In-Store Clinic Chain

One of the latest trends in US health care appears to be, for want of a better name, "in-store clinic chains." We had discussed this trend here, focusing on the MinuteClinics version of the concept. In-store clinics are small clinics are set up in retail outlets, particularly those that already have pharmacies. The clinics are usually staffed by nurse practitioners, and offer limited services, like treatment of sore throats and immunizations, for prices lower than that charged by physicians’ offices or emergency rooms. The clinics are not meant to treat complex, serious, or chronic problems. Supposedly, patients with such problems would be referred to physicians or hospitals. My biggest clinical concern about the concept was the ability of the clinics’ practitioners to truly distinguish patients whose problems are beyond their capabilities.

An article last month in the New York Times discussed several contenders in the field. These include RediClinics, run by CEO Stephen M Case, who used to be chairman of AOL, and Take Care Health Systems, run by Hal Rosenbluth, who used to run a chain of travel agencies. This raises a concern that such chains may be run by people with no obvious background in health care, who may not fully understand the clinical issues involved, or share the values of health care practitioners.

Speaking of values, though, the most interesting example in the Times article was a company called Solantic, whose CEO is Richard L Scott. Solantic is a bit of a variation on the theme, since its clinics will be staffed by physicians, and be thus somewhat more pricy than its competitors, although still offering limited services.

CEO Scott does has previous experience in health care, albeit not hands on. He is the former CEO of Columbia, which became Columbia/HCA Healthcare Corp. An article in the Business Journal of Jacksonville narrated his rise and fall.

After working on health-care mergers and acquisitions as an attorney, Scott began Columbia in 1988 by buying two hospitals in El Paso, Texas. In less than a decade, the company grew so large that it had 285,000 employees working in 343 hospitals and more than 700 surgery centers and home health-care offices.

‘In a field supposedly fueled by humanitarian desires to heal, objectives devoted to financial gain are rarely applauded’ the trade publication Medical Laboratory Observer reported in 1997. ‘His aggressive management style, high growth targets and quest for market share made enemies.’

The accusations against Columbia that would eventually lead to Scott's ouster were detailed in numerous New York Times stories, starting in 1996, that scrutinized the company's business and Medicare billing practices.

In the spring of 1997, as federal agents began conducting document raids on several Columbia facilities, Scott did not admit any wrongdoing. 'Mr. Scott's grudging responses apparently contributed to his downfall,' noted a story that ran five days after Scott and Chief Operating Officer David Vandewater resigned.

Scott left with a $10 million severance package and 10 million shares of stock, most of which were from his initial investment before the company was taken public. At the time, those shares would have been valued at more than $300 million.

In 2001, HCA reached a plea agreement with the government that avoided criminal charges against the company and included $95 million in fines. Four mid-level executives were brought to trial but two were acquitted and two more had guilty verdicts overturned.

Scott said prosecutors never attempted to question him.

Civil suits have cost HCA more than $1.7 billion, said attorney Peter Chatfield, a partner with Phillips and Cohen in Washington, D.C., who spent seven years working on a Columbia-HCA civil case brought by two whistleblowers.

Although Scott was never the subject of a law-suit, and never convicted of a crime, clearly major things went wrong at Columbia/HCA on his watch. Yet he left with a golden parachute, and now is a leader in the latest health care trend, in-store clinic chains.

There is a striking contrast between the ethical standards to which nurses and physicians, including those working in in-store clinics, are held, and those to which the managers and executives of health care organizations are held. For the latter, the standard appears to be anything goes, as long as it does not result in serious jail time.

Maybe, given the mess that the leadership of large health care organizations has made of health care, we ought to rethink who should lead such organizations, and to what standards they ought to be held.

Thanks to the Health Care Blog for the tip!