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.

Conflicts of Interest, Government Leaders, and Private Health Care Organizations

There seems to be a small surge of stories about conflicts of interest regarding health care affecting government leaders who can affect health care. 

The Institute of Medicine defined conflict of interest in medicine as "circumstances that create a risk that professional judgments or actions regarding a primary interest will be unduly influenced by a secondary interest."  So we will summarize these stories by first showing what each leader's secondary interests are, and then show how they may influence carrying out his leadership responsibilities.  (We used "his" because all examples are of male leaders.)

Florida: Governor Scott and Solantic

Rick Scott, the new Florida Governor, apparently still has strong ties to a for-profit chain of urgent care centers, as reported by the Palm Beach Post:

As Florida Gov. Rick Scott reorganizes health agencies, cuts spending and pushes for new free-market health policies, his ownership of Solantic, the urgent care chain, increasingly poses conflict of interest questions.

Solantic co-founder Karen Bowling says Scott has taken steps to distance himself from the chain. He stopped regular business calls with her after he was elected.

'I don't talk to him anymore. Not since November. Really not much since April,' Bowling said.

Scott left the privately held company's board of directors in January 2010, during his campaign.

But the most important step the governor must take to avoid a conflict of interest, some ethics experts say, is to divest his Solantic interests.

In January, Scott did transfer his Solantic stock - to his wife.

There were obvious questions raised whether this transfer mitigated the conflict of interest:

Scott's efforts to distance himself appear to be designed to meet the letter of Florida ethics laws, if not the spirit.

They may not succeed if challenged, warned legal and ethics expert Marc Rodwin, a law professor at Suffolk University who is the author of several books on health care and conflicts of interest.

'Placing his ownership in the name of his wife is not an effective way to control for conflicts of interest and not generally accepted because they are personally related,' Rodwin said.


Rodwin said Scott's blindness to Solantic's daily business decisions likewise does not relieve his conflict.


'His family still benefits from it,' he said.

There are a number of issues before Florida government about which there appears to be a risk that Governor Scott's actions could be unduly influenced by his family's ownership interest in Solantic:

From the moment he was elected, Scott has said government has no business providing primary care.


His budget proposal eliminated state support for the clinics. The county's health department director warns that may leave 30,000 adults without a medical home.

Scott's decisions as governor are likely to affect Solantic in other, perhaps more significant ways.

Scott's budget would curb growth in Medicaid spending, the state-federal safety net insurance program, by requiring most recipients to join private HMOs. Solantic accepts Medicaid HMO reimbursements, but not state Medicaid, so adding clients could broaden the clinics' customer base.

But the greatest benefit for Solantic could come from Scott and other Republican governors' lobbying efforts in Washington.

They want the Obama administration to give states waivers from the Affordable Care Act, and provide them with a massive block grant to expand health coverage in the way they deem best for their states. Money slated to go to business' health insurance tax credits and lower income consumers' insurance subsidies could pay for the grants - to the tune of billions.

Obama has said he's willing to give the states waivers on a speeded-up timetable. His administration Thursday published new rules on how states could get that waiver.

Scott's health policy adviser Michael Cannon, an economist with the Cato Institute in Washington, favors giving consumers health vouchers that they would use either as cash for direct-pay medical care or to buy insurance.

The possible effect on Solantic and similar clinics could be huge, said Rodwin, the legal ethics expert.

'You have a major owner-operator of a set of clinics on the state level, and a major policy figure on a state level, making major changes that affect whether that kind of business will thrive or not, what their competition will be, and really reforming the whole health sector,'  Rodwin said. That's in my view a very dangerous role.'

Note that this is not the first whiff of scandal regarding Rick Scott's leadership role in health care.  As the article noted, Scott:

resigned as CEO of Columbia/HCA amid a federal billing fraud investigation. Columbia/HCA ultimately agreed to the nation's largest Medicare fraud settlement, a $1.7 billion criminal and civil penalty.

Although the company had admitted to criminal wrongdoing, Scott himself was never charged, and he has denied knowledge of the illegal activities.

Scott left Columbia/HCA with more than $5 million in severance and $300 million worth of stock and options.

See our most recent detailed post on Mr Scott's history here.

Massachusetts: House Health Finance Committee Chair Walsh and Health Care Industry Lobbyists

The newly appointed chair of the Massachusetts House committee on health care finance has strong relationships to health care industry lobbyists, according to an editorial in the Boston Globe:

Speaker Robert DeLeo has chosen a health-finance committee chairman, Steven M. Walsh of Lynn, whose family is to lobbying what the Mannings are to NFL quarterbacking. Walsh’s father-in-law represents the state’s health insurers, while his uncle’s firm blocks and tackles for Steward Health Care, new owners of the Caritas chain of Catholic hospitals.

Again, there are a number of issues before the Massachusetts legislature about which there appears to be a risk that Representative Walsh's actions could be unduly influenced by his family's lobbying work:

Next to the budget, the thorniest issue the Legislature will deal with this year will be changes in health care financing. Lawmakers will consider bills that may completely change how health care providers are paid. That shift — from fee-for-service payments towards a system based more on per-capita reimbursements — will set off a free-for-all among insurers, doctors, and hospitals.

So,

Walsh’s admirable efforts ... [to improve legistlation regarding lobbying] don’t erase the conflict of interest he faces on health care issues. Walsh can try to separate family feelings and events from his official role, but the companies paying his uncle’s firm and his father-in-law are still expecting them to use every opportunity to make the strongest possible case for their clients. And it’s no exaggeration that these clients — the state’s insurers and its newest hospital chain — have hundreds of millions of dollars at risk in the new payment system Walsh will be vetting.

Perhaps if the stakes were lower or the relationships more distant, Walsh could chair the health-finance committee without risking public confidence. But as it is, he will be in a position of representing the taxpayers’ interests against those of his close relatives.

Note that we discussed Steward Health's possibly revolutionary role in commercializing physicians' practices here, and how a former Massachusetts government health care agency official exited via the revolving door to join Steward Health Care here.
New York: Governor Cuomo's Advisor and Major Hospital Systems

New York Governor Andrew Cuomo has a close advisor whom he just appointed to a "Medicaid redesign team" whose clients include large academic medical centers/ hospital systems, per the New York Times:

When Andrew M. Cuomo married Kerry Kennedy in 1990, Jeffrey A. Sachs served as an usher. When Mr. Cuomo’s daughter Michaela was born, he asked Mr. Sachs to be her godfather. When his marriage fell apart years later, Mr. Cuomo stayed in Mr. Sachs’s triplex near the United Nations.

Since Mr. Cuomo’s election as governor last fall, Mr. Sachs, 58, has taken on a powerful role among his health care advisers as the administration confronts crucial decisions, including how to overhaul New York’s $53 billion Medicaid program.

But at the same time, Mr. Sachs, known to many in Albany as 'Andrew’s best friend,' is working as a paid consultant to some of the biggest players in the New York health care industry, including Mount Sinai Medical Center, NYU Langone Medical Center and the state’s largest association of nursing homes, all of which have financial interests at stake in the coming Medicaid changes.

Mr. Sachs, whose firm is named Sachs Consulting, has never registered as a lobbyist, which would require him to divulge his clients and fees to the state ethics commission.

Again, there are a number of issues before New York government about which there appears to be a risk that Governor Cuomo's actions could be unduly influenced by his friend, advisor, and committee member's consulting relationships with major hospital systems.

Mr. Sachs was also an early advocate of the “Wisconsin model” of Medicaid, under which the governor would set a target for spending reductions and then appoint a task force of industry stakeholders to apportion the cuts. The approach has political appeal for the governor, in that it entices would-be opponents of spending reductions to participate in the plan rather than protest it. But it also endows the unelected team members with immense power.

Mr. Sachs made recommendations to Mr. Cuomo and his aides about whom to appoint to the Medicaid team, which Mr. Cuomo formed through an executive order in January. During the transition, Mr. Sachs also helped assemble a four-person policy team to begin meeting with state agencies about the best approach to reducing Medicaid spending

Moreover, the Times article recounted cases in which Mr Sachs appeared to influence policy in ways that benefited his consulting clients. For example:

While he was helping Mr. Cuomo assemble his health care staff, Mr. Sachs’s name arose in an unusual personnel matter, one that held great interest for one of his clients, NYU Langone Medical Center.

For at least a year, NYU Langone had had strained relations with Dr. Harold S. Koplewicz, a well-known psychiatrist who founded the hospital’s child psychiatry center but left in 2009 to start a competing research and clinical center.

Relations worsened because Dr. Koplewicz, who also served as director of the Nathan S. Kline Institute for Psychiatric Research, a state-run psychiatric center in Rockland County that also has a research affiliation with NYU, refused to allow NYU to screen those he hired at the institute, among other issues.

During an October meeting between Mr. Sachs and Dr. Koplewicz, Mr. Sachs suggested the doctor resign from the Kline Institute, people briefed on the meeting said. Should he lobby too aggressively to keep his job, Mr. Sachs warned, Mr. Cuomo, then widely expected to win election, might choose to close down the institute.

In a later meeting in December, Michael F. Hogan, state commissioner of mental health, told Dr. Koplewicz that he had been warned by Mr. Sachs that his reappointment by Mr. Cuomo would be jeopardized if Dr. Koplewicz did not resign, according to the people briefed.

Afterward, Dr. Koplewicz wrote Dr. Hogan a letter detailing his accomplishments as director of the institute and complaining of the pressure being exerted by Mr. Sachs.

'As you explained — and I appreciate your candor — you have been pressured by NYU through Jeff Sachs to have me resign as a condition for your reappointment as commissioner of mental health,' Dr. Koplewicz wrote in the letter.

In a response sent the following day, Dr. Hogan did not dispute Dr. Koplewicz’s account but suggested that he had been insufficiently cooperative with NYU and the Office of Mental Health.

'Accordingly, your service as director, Psychiatric Research Institute, will end effective Jan. 13, 2011,' Dr. Hogan wrote.

Dr. Koplewicz and Dr. Hogan both declined to comment, though neither disputed the authenticity of the letters.

This case is particularly disquieting because of Governor Cuomo's former role as a tough state attorney general who targeted white collar crime.

Summary

US health care is hugely complex. The interests of its increasingly large commercial players can be strongly affected by the actions of government at local, state and national levels.

We have previously discussed the pervasiveness of conflicts of interest throughout health care. It should come as no surprise that there are important conflicts affecting government leaders who have power over health care issues.

Although there may actually be more laws and regulations about conflicts of interest affecting government leaders than about those affecting, say, leaders of academic medical institutions, the increasingly incestuous nature of health care leadership seems to add impetus to entwine the system in ever increasing strands of conflict.

So, I humbly suggest, as a variation on a theme I have sounded before, that governmental leaders who have power over health care should put the health of patients and the population first, and should not have relationships that risk this mission in service of private gain.  Furthermore, leaders of civilian health care organizations, especially of hospitals, hospital systems and physicians' groups whose mission is also to improve care of individuals and society, should not seek to entangle government leaders in conflicts meant to serve private financial interests.