Who Should Control Healthcare?

The American Academy of Emergency Medicine (AAEM) is urging stiffer enforcement of decades-old statutes that prohibit the ownership of medical practices by corporations not owned by licensed doctors (1). These century-old laws and regulations were meant to fight the commercialization of medicine, maintain the independence of physicians, and prioritize the doctor-patient relationship over the interests of investors and shareholders (2). Thirty-three states (click to see list of states that prohibit corporate ownership) plus the District of Columbia have rules on their books against the so-called corporate practice of medicine. In Arizona ownership by nonprofit entities is permitted, however as most of us know, nonprofit healthcare organizations are nonprofit in name only. Furthermore, over the years, companies have successfully sidestepped bans on owning medical practices by buying or establishing local staffing groups that are nominally owned by doctors and restricting the physicians so they have no direct control.

Those campaigning for stiffer enforcement of the laws say that physician-staffing firms owned by private equity investors are the guiltiest offenders. Private equity-backed staffing companies manage a quarter of the nation’s emergency rooms (2). The two largest are Nashville-based Envision Healthcare, owned by investment giant KKR & Co., and Knoxville-based TeamHealth, owned by Blackstone. Court filings in multiple states, including California, Missouri, Texas, and Tennessee, have called out Envision and TeamHealth for allegedly using doctor groups as straw men to sidestep corporate practice laws (2).

Physicians and consumer advocates around the country are anticipating a California lawsuit against Envision. The trial is scheduled to start in January 2024 in Federal court. The case involves Placentia-Linda Hospital in northern Orange County, where the plaintiff physician group lost its ER management contract to Envision. The complaint  by Milwaukee-based American Academy of Emergency Medicine Physician Group alleges that Envision uses the same business model at numerous hospitals around the Nation. Furthermore, the complaint alleges that Envision uses shell business structures to retain de facto ownership of ER staffing groups, and it is asking the court to declare them illegal. “We’re not asking them to pay money, and we will not accept being paid to drop the case,” said David Millstein, lead attorney for the plaintiff. “We are simply asking the court to ban this practice model.” Although Envision filed for Chapter 11 bankruptcy, AAEM has vowed to pursue the lawsuit (3,4).

The plaintiff — along with many doctors, nurses and consumer advocates, as well as some lawmakers — hopes that success in the case will spur regulators and prosecutors in other states to take corporate medicine prohibitions more seriously. The corporate practice of medicine has “a very interesting and not a very flattering history” said Barak Richman, a law professor at Duke University (2). This is a gross understatement in my opinion. The physicians, nurses, and technicians are not responsible for poorer care at higher prices that we now see. Businessmen are responsible by squeezing caregivers and patients for every penny, a practice some call “hyperfinancialization”(5). It is not surprising charging as much as possible while delivering minimal care has evolved. Businessmen in healthcare maximize profits in these situations, especially when they can avoid any responsibility for the healthcare delivered. Rather, a system of “quality assurance” has evolved which is more concerned with controlling caregivers than quality (6).

If not businessmen, then who should control healthcare? Doctors are alleged to be poor businessmen. If by this it is meant that physicians are more likely to try and deliver the best healthcare at the best price rather than bill the maximum for minimal care, I would hope most of physicians would plead guilty. Most physicians are concerned about delivering quality healthcare at reasonable prices. I suspect that the rumor that doctors are poor businessmen was started by business interests for their own financial gratification.

Not all doctors are qualified to lead healthcare. Some are straw managers which will do whatever their business supervisors tell them to do. Physician leaders practicing medical administration should be held to the same high standards that doctors are held in care of patients. Therefore, some degree of local control must be kept. Those of us who advocate for better healthcare can hope the courts enforce existing laws where applicable. We also need to take action in supporting each other for the good of medicine and the health of our patients. However, we also need to do a better job policing ourselves. Those ordering unnecessary or questionable diagnostic testing or treatments need to be called out. If successful, the Envision Case could prompt legislators, regulators and prosecutors in other states to focus attention on clinical practice of medicine prohibitions in their own states and take up arms against potential violations or reinvigorate prohibitions of clinical practice with new legislation and/or regulation.

Richard A. Robbins MD

Editor, SWJPCCS

References

1. American Academy of Emergency Medicine. Emergency Medicine and the Physician Practice Management Industry: History, Overview, and Current Problems. Available at: https://www.aaem.org/publications/key-issues/corporate-practice/emergency-medicine-and-the-physician-practice-management-industry-history-overview-and-current-problems/ (accessed 8/23/23).
2. Wolfson B. ER Doctors Call Private Equity Staffing Practices Illegal, Seek to Ban Them. Kaiser Health News. December 22, 2022. Available at: https://www.virginiamercury.com/author/kaiser-health-news/ (accessed 8/23/23).
3. Condon A, Thomas N. From private equity to bankruptcy: Envision's last 5 years. May 18, 2023. Available at: https://www.beckershospitalreview.com/finance/from-private-equity-to-bankruptcy-envisions-last-5-years.html (accessed 8/23/23).
4. Holland & Knight Law. Federal Bankruptcy Court Stays Envision Healthcare Litigation in California. August 3, 2023. Available at: https://www.hklaw.com/en/insights/publications/2023/08/federal-bankruptcy-court-stays-envision-healthcare-litigation (accessed 8/23/23).
5. Robbins RA. Who are the medically poor and who will care for them? Southwest J Pulm Crit Care. 2019;19(6):158-62. [CrossRef]
6. Robbins RA. The Potential Dangers of Quality Assurance, Physician Credentialing and Solutions for Their Improvement. Southwest J Pulm Crit Care Sleep. 2022;25(4):52-58. [CrossRef]

Cite as: Robbins RA. Who Should Control Healthcare? Southwest J Pulm Crit Care Sleep. 2023;27(3):33-35. doi: https://doi.org/10.13175/swjpccs039-23 PDF

Book Review: One Hundred Prayers: God's answer to prayer in a COVID ICU

By Anthony Eckshar MD

One Hundred Prayers: God's answer to prayer in a Covid ICU
amazon.com

The book is a very moving and spell-binding collection of the encounters between patients and physicians during the worst of the COVID-19 epidemic and Dr. Eckshar’s prayers for each of them. A devout person can read this as a prayer devotional; however, it is much more - an authentic account of what doctors and nurses go through working in the ICU. This book might help encourage people who are searching for faith, especially those who face severe illnesses in themselves or a loved one. It may also encourage doctors, nurses and other healthcare workers who might have been burned out working during the pandemic. Its main message is that faith, compassion, and the scientific method must co-exist. It is also a great review of the history of COVID pandemic from the trenches of patient care in the ICU. For nonmedical people it  should provide a clue to how doctors and nurses think. Hopefully, this book will lift everyone up and instill deep admiration and respect for the ICU doctors and nurses, and perhaps teach you a little something about faith.

Richard A. Robbins MD

Editor, SWJPCCS

Cite as: Robbins RA. Book Review: One Hundred Prayers: God's answer to prayer in a Covid ICU. Sodsuthwest J Pulm Crit Care Sleep. 2023;27(1):14. doi: https://doi.org/10.13175/swjpccs032-23 PDF

How Much Should Healthcare CEO’s, Physicians and Nurses Be Paid?

In 2019 the Southwest Journal published an editorial that stated one cause for the rising costs in healthcare was chief executive officer (CEO) compensation (1). Based on 2017 salaries, Peter Fine from Banner Health was the highest paid healthcare CEO in the country with compensation of $25.5 million. In comparison, the CEO of Mayo Clinic Arizona was paid a paltry $1.8 million (2). We decided to do a follow-up, and found that after a dip during the first year of the COVID-19 pandemic, Mayo raises resumed in 2021. Mayo’s CEO, Dr. Gianrico Farrugia, was paid $3.48 million in 2021 up from $2.74 million in 2020 (3). Dr. Richard Gray, CEO of the Mayo Arizona campus, was paid $1.78 million in 2021, up 26% from the previous year. I shared these numbers with a couple of the Mayo Clinic faculty who were surprised by the amount of compensation their executives were receiving.

Mayo Clinic posted $1.2 billion in net operating income in 2021 (3). More recently, the system reported net operating income of $157 million for the third quarter of 2022 with an operating margin of 3.8 percent. Compensation for Mayo Clinic executives is set by the Mayo Clinic Salary & Benefits Committee and endorsed by the Mayo Clinic Board of Trustees Compensation Committee. Mayo claims not to be a profit-sharing institution and that pay is not linked to doing anything more or less for the patient than what is needed. It is unclear how CEO compensation in the millions fits with this patient care philosophy.

I did a preliminary survey of physicians in the Phoenix area of how much healthcare CEOs should be paid. Not surprisingly, most of these physicians thought that CEOs should be physicians like they are at the Mayo Clinic. Opinions on CEO compensation were all over the board. However, the best answer, in my opinion, came from a retired ID physician. He thought CEOs should be well compensated but should be paid less than senior physicians. His reasoning was that patients come to the Mayo Clinic or other healthcare organizations not because of the CEO, but because of Mayo’s physicians. Lawyers have this figured this out. One of my closest friends is an administrative partner for a large (over 100 lawyers) law firm in Phoenix. He said he is well compensated but paid less than his senior partners. The reasoning was much the same. Clients come not because of his administrative skills, but because of the lawyers. However, he was quick to point out that managing partners do deserve some compensation for their lost income in not practicing law. The compensation committee in these cases is the senior partners.

Some would argue that certain physicians are over-paid. I would agree. Current fee-for-service payment rates for physician visits trace back to the origins of Blue Cross Blue Shield (BC/BS) insurance in the 1930s. At that time, BC/BS rates were set to pay generously for hospitalizations and operations. Payments for so-called “cognitive services” were lower. In the 1960’s Medicare adopted the BC/BS payment model. This disparity has been perpetuated through “Relative Value Units”. Despite recognition by the Medicare Payment Advisory Commission (MedPAC) of the adverse effects of inadequate payment to some physicians, especially primary care, only limited progress has been made toward correction of the disparity (4). This may be due, at least in part, to treatment of total payment for physicians as a zero-sum game in which decision making is dominated by non–primary care physicians through mechanisms such as the Relative Value Scale Update Committee (RUC) (5). This translates to hospitals, procedure-oriented specialties, and especially some surgical subspecialties compensated in excess compared to more cognitive specialties.

When BC/BS was founded in 1929, one goal of the American healthcare Association (AHA) and the American College of Surgeons was to eliminate the “Doctor’s Hospitals”. These physician-run hospitals were sometimes substandard. However, little progress in eliminating them was made until establishment of Medicare and Medicaid in 1965. Many of the “Doctor’s Hospitals” did not meet criteria for Medicare certification. Lack of Medicare and Medicaid payments essentially closed their doors. However, the doctor run hospitals are now making a comeback through surgical centers. Although the AHA has questioned their quality, most have matched or exceeded the quality metrics used by the Joint Commission or other groups and often score better than hospitals in head-to-head comparisons (6). Doctors who run such centers deserve some payment for their administrative efforts.

Nurse practitioners (NPs) and physician assistants (PAs) serve a vital role in patient care. They deserve to be well paid. However, their education and responsibility are generally less than physicians. For example, 1000 clinical hours are required for nurse practitioner certification which represented about 10 weeks of my internship or about 13 weeks under the current 80-hour work week limit. Similarly, PAs are required to only complete 1600 hours of clinical training. In contrast, physicians complete family practice, internal medicine, or pediatric residencies which require a minimum of 3 years, with most subspecialities requiring an additional 3+ years. Surgical residencies are usually 5 years. Furthermore, there appears to me more risk assumed by a physician. In 2019 there were only 420 malpractice suits filed against nurse practitioners and PAs compared to over 20,000 total medical malpractice suits (7).

Nurses are the backbone of any healthcare organization. Although they usually have less education than physicians, NPs, or PAs, nursing is intense and stressful with nurses assuming a large responsibility and delivering the most beside care. Because patients are close at hand, nurses often make independent care decisions. In Arizona, nurse compensation averaged about $78,330 in 2019 (8). Not surprisingly it is considerably higher in California where the cost of living is higher compensation and averages $113,240. Recently, more nurses are working as traveling nurses, or filling a staffing shortage at a hospital or healthcare facility on a temporary basis. Prior to COVID-19 many nurses were dissatisfied with healthcare working conditions (8). This suggests that nurses may be seeking other employment options that provide them with more control over where and when they work (9). Travel nursing provides these options at a higher pay.

The causes of the overcompensation of CEOs at the expense of historically undercompensating some nurses and physicians have been salary and benefits committees set up under a corporate structure. Under the present system of healthcare governance an executive board appointed or heavily influenced by a CEO appoints a board which appoints a salary and benefits committee. The later committee in turn sets salary and benefits for the organization including the executives. A compensation committee consisting of physician and nursing leaders could more realistically evaluate an individual’s value to a healthcare organization. However, it seems likely that such a change will require mandates from healthcare certifying organizations. Healthcare executives are unlikely to readily relinquish the present system which has rewarded them so generously. Therefore, physicians need to lobby various organizations such as the Joint Commission, the Relative Value Scale Update Committee (RUC), ACGME, etc. for a compensation system which examines administrative efficiency and addresses areas of administrative complexity that add costs to the health care system without improving accessibility or value. This is in contrast to the present system of rewarding those who serve a for-profit corporate structure rather than improving healthcare in a not-for-profit system.

Richard A. Robbins MD

Editor, SWJPCCS

References

1. Robbins RA. CEO compensation-one reason healthcare costs so much. Southwest J Pulm Crit Care. 2019;19(2):76-8. [CrossRef]
2. Innes S. This Arizona nonprofit health system CEO topped the salary list at $25.5 million in 2017. Arizona Republic, October 23, 2019. Available at: https://pnhp.org/news/this-arizona-nonprofit-health-system-ceo-topped-the-salary-list-at-25-5-million-in-2017/ (accessed 1/16/23).
3. Gamble M. Mayo Clinic defends executive raises. Becker’s healthcare Review. Dec. 8, 2022. Available at: https://www.beckers healthcarereview.com/compensation-issues/mayo-clinic-defends-executive-raises.html ((1/17/23).
4. MedPac. March 2022 Report to the Congress: Medicare Payment Policy. March 2022. Available at: https://www.medpac.gov/document/march-2022-report-to-the-congress-medicare-payment-policy/ (accessed 2/4/23).
5. Magill MK. Time to Do the Right Thing: End Fee-for-Service for Primary Care. Ann Fam Med. 2016 Sep;14(5):400-1. [CrossRef] [PubMed]
6. Pham N, Donovan M. The Economic and Social Benefits of Physician-Led Hospitals. ADP Analytics. September 2022. Available at: https://ndpanalytics.com/wp-content/uploads/PHA-Economic-Impact-Report-092022-Final-R1.pdf (accessed 2/3/23).
7. Chesney S. Do Nurse Practitioners Really Get Sued? Berxi. Aug 16, 2021. Available at: https://www.berxi.com/resources/articles/do-nurse-practitioners-get-sued/ (accessed 2/3/23).
8. 2U Inc. Nurse Salary. Available at: https://nursinglicensemap.com/resources/nurse-salary/ (accessed 2/3/23).
9. Yang YT, Mason DJ. COVID-19’s Impact On Nursing Shortages, The Rise Of Travel Nurses, And Price Gouging. Health Affairs Forefront. January 28, 2022. Available at: https://www.berxi.com/resources/articles/do-nurse-practitioners-get-sued/https://www.healthaffairs.org/do/10.1377/forefront.20220125.695159/ (accessed 2/3/23).

Cite as: Robbins RA. How Much Should Healthcare CEO’s, Physicians and Nurses Be Paid? Southwest J Pulm Crit Care Sleep. 2023;26(2):24-27. doi: https://doi.org/10.13175/swjpccs007-23 PDF

CMS Rule Would Kick “Problematic” Doctors Out of Medicare/Medicaid

Last week CMS announced that beginning January 1, 2020, they assumed a new power to bar clinicians' participation if agency officials can cite potential harm to patients based on specific incidents (1). CMS created this new authority through the 2020 Medicare physician fee schedule. CMS claimed that it had no pathway to address "demonstrated cases of patient harm" in cases where clinicians maintain their licenses (2).

The rule drew criticism from multiple physician groups with none supporting it. The Alliance of Specialty Medicine said CMS has been using "vague and subjective" criteria to evaluate physicians for some time. The new revocation authority "just compounds the problem," the Alliance told Medscape Medical News (2).

In drafting the final version of the rule, CMS rejected many suggestions offered in comments about the revocation authority. The AMA pointed out that CMS hid such a major change in the annual physician fee schedule under the opioid treatment program section (2). The Association of American Medical Colleges (AAMC) said CMS should defer to state medical boards and other state oversight entities regarding issues associated with protecting beneficiaries from patient harm (2). In the final rule, CMS argued that it needs the new revocation authority due to cases where "problematic" behavior persists despite detection by state boards.

During the past week two examples of CMS’ bureaucratic nature were observed in my practice. First, I was told from a durable medical equipment provider that a new CMS requirement was that when reordering patient continuous positive airway pressure (CPAP) supplies that I would need to check, initial and date each item from a long list of supplies whether it was ordered or not. Second, an asthma patient was referred to me that was using daily albuterol. I recommended a long-acting beta agonist/corticosteroid combination but was told that the patient must fail corticosteroids alone before prescribing the more expensive combination therapy. Nearly every physician and many patients have seen some nameless and faceless clerk at CMS give them the “ol’ run around”. CMS’ argument that they are improving quality and protecting patients would be more believable if these and the many other instances of bureaucratic overreach were rare rather than common. 

Many “quality” programs have been thrust on clinicians in the past without any demonstrable improvement in healthcare for patients (3). Rather quickly these programs morph from a quality program to a hammer used to control clinicians and suppress dissent. In seems likely that CMS’ new self-assumed authority will be the same. If CMS wishes to improve care, they should deal with examples such as those above and many more instances of time wasting paper work and poor care that they mandate. Two recommendations to reduce these poor decisions are: 1. List the name of the licensed practitioner responsible for each CMS decision; and 2. Establish an efficient appeals process not controlled by CMS. These would reduce the instances of poor, anonymous decision makers hiding behind the anonymity of the CMS bureaucracy and could go a long way in improving patient care.

Richard A. Robbins, MD

Editor, SWJPCC

References

1. Centers for Medicare and Medicaid Services. November, 2019. Available at: https://s3.amazonaws.com/public-inspection.federalregister.gov/2019-24086.pdf (accessed 11/9/19). Scheduled to be published in the Federal Register on 11/15/2019 and available online at https://federalregister.gov/d/2019-24086.
2. Young KD. CMS sharpens weapon to kick 'problematic' docs out of Medicare. Medscape Medical News. November 7, 2019. Available at: https://www.medscape.com/viewarticle/920994?nlid=132505_5461&src=wnl_dne_191108_mscpedit&uac=9273DT&impID=2159379&faf=1 (accessed 11/9/19).
3. Robbins RA. The unfulfilled promise of the quality movement. Southwest J Pulm Crit Care. 2014;8(1):50-63. [CrossRef]

Cite as: Robbins RA. CMS rule would kick “problematic” doctors out of Medicare/Medicaid. Southwest J Pulm Crit Care. 2019;19(5):146-7. doi: https://doi.org/10.13175/swjpcc066-19 PDF 

Blue Shield of California Announces Help for Independent Doctors-A Warning

An article today in Modern Healthcare announced that Blue Shield of California is launching a new program to help physician practices remain independent while giving them tools needed to succeed in value-based care arrangements (1). The program touts that it will offer independent doctors and practices tools to improve patient health outcomes while making it easier for them to focus on care instead of administrative tasks.

Blue Shield said it plans to support physicians in moving toward value-based care by investing in their practices. Investments could range from different types of affiliations to even employing the doctors in select situations. The announcement points out that independent physicians appear to be a dying breed. Furthermore, when independent physicians join an integrated healthcare system, costs increase (2).

On the surface this announcement sounds positive but the article raises a number of concerns. First, Blue Shield California is a for-profit company which had its not-for-profit status revoked by the state of California in 2014. Blue Shield California has also been known for being less than forthcoming with details regarding their business. Second, it is unclear what type of access Blue Shield plans to gain to physicians’ practices and patient files. Third, in many instances, quality measures have been nothing more than a series of meaningless metrics whose performance have not benefited patients. However, performance of these metrics has benefited healthcare executives’ bonuses.  Blue Cross and Blue Shield pays bonuses which on average are greater than 65% of the executive’s base salary. 20-25% of the bonuses are dependent on “quality” as defined by Blue Shield.

As with any dealings with insurance companies or integrated healthcare systems, physicians should be wary. What is the cost to patients and physicians? Will the company be charging for software installation and maintenance? What role will the insurance company have in determining value measures and what access will they have to patient data? Will any contractual agreement be easily canceled or will it be prolonged with the physician paying for the installation and use of any software? Will there be a noncompete clause forcing physicians to move if they decide to leave the agreement? These and other questions need to be addressed prior to any physicians signing on this or any similar agreements. Physicians considering any agreement or contract are encouraged to have them reviewed by lawyers familiar with healthcare to determine the potential pitfalls.

Richard A. Robbins, MD

Editor, SWJPCC

References

1. Livingston S.  Blue Shield of Calif. aims to help independent doctors with value-based care. Modern Healthcare. August 29, 2019. Available at: https://www.modernhealthcare.com/payment/blue-shield-calif-aims-help-independent-doctors-value-based-care (accessed 8/29/19).
2. Baker LC, Bundorf MK, Kessler DP. Vertical integration: hospital ownership of physician practices is associated with higher prices and spending. Health Aff (Millwood). 2014 May;33(5):756-63. [CrossRef] [PubMed]
3. Blue Shield of California. 2017 executive compensation summary. Available at: file:///C:/Users/Rick/Downloads/2017-Executive-Compensation-Summary-Final%20(1).pdf (accessed 8/29/19).

Cite as: Robbins RA. Blue Shield of California announces help for independent doctors-a warning. Southwest J Pulm Crit Care. 2019;19(2):85-6. doi: https://doi.org/10.13175/swjpcc058-19 PDF