Another Sign of Resistance? - Doctors Sue Hospital Systems Alleged to Put Money Ahead of Mission

In two recent instances, physician groups have filed lawsuits against hospital systems alleging that managers were directly putting revenue ahead of patient welfare.  Although so far this is all about allegations, and nothing has been decided in courts of law, the details provided in the current news coverage are disturbing.

We will present the cases in the order that news reports were published.

Prime Healthcare Services

California Watch reported on a lawsuit filed against Prime Healthcare Services, a California based for-profit hospital system that has got its share of unfavorable media coverage.  In summary,

A dozen Southern California doctors are accusing the leadership of a Prime Healthcare Services hospital of refusing to notify them about their patients because they won’t engage in profit-driven practices, according to a request for a restraining order filed this week.

The San Bernardino County physician group suing Chino Valley Medical Center and its director say it has been asked to needlessly admit patients from the emergency room into hospital beds, according to the lawsuit filed Wednesday in San Bernardino County Superior Court. The group’s doctors also have been urged to document patient conditions as more complex or severe than they are, the filing says.

The doctors suing the hospital maintain that both practices are meant to drive up hospital bills. The result of their refusal to go along, they say, is that they’re not receiving what they characterize as legally mandated notifications when their patients land in the hospital.

 The physicians have asked the judge to lift the alleged freeze in communication, saying it puts fragile patients in danger. 

The article described one particularly concerning incident

[The lawsuit] ... claims one patient with a serious breathing condition was admitted without her doctor’s knowledge. During her stay, Chino Valley staff operated to remove her gallbladder.

'Because (Inland) was not contacted, no doctor gave the required pulmonary clearance nor did the patient receive proper respiratory treatment prior to surgery,' the lawsuit says.

The suit alleges that such practices put patients 'at serious risk of injury and even death.'

The article also described allegations that at the root of the problem was the hospital system's management's insistence on revenue ahead of all other concerns:

The physician group suing Chino Valley holds contracts with about a dozen managed care firms that expect group doctors to handle local members’ care in the case of a hospitalization.

The Inland doctors say that instead, they’ve been stonewalled. In their lawsuit, they say the silence is a result of their refusal to follow the direction of the hospital’s president and chief medical officer, Dr. James Lally, a defendant in the case.

Lally suggested that the physicians document serious medical conditions, such as a certain type of pneumonia that Medicare pays hospitals a premium to treat, the suit says.

Lally also discouraged doctors from putting patients on 'observation' status, according to the suit. That means a doctor will monitor a patient’s condition, rather than sending him or her home or admitting the patient to a hospital bed.

The lawsuit alleges that Lally prefers doctors to admit patients into the hospital so the hospital can receive 'significantly higher Medicare reimbursements.'

This is not the first time that Prime has been accused of mischief:

A yearlong California Watch series documented high rates of lucrative and severe medical conditions at Prime hospitals, as well as an aggressive approach to admitting ER patients into hospitals, rather than treating them in the ER and sending them home.

State hospital data analyzed by California Watch showed that Prime hospitals admitted about 63 percent of Medicare-funded ER patients into hospitals in 2009, compared with 39 percent at the state’s other leading for-profit chain, Tenet Healthcare Corp. In response, Prime said the analysis 'utterly fails to consider the medical basis for admissions.'

The U.S. Justice Department is investigating Prime’s billing practices, according to a document the chain filed as part of a hospital purchase plan. Dr. Prem Reddy, founder of the Ontario, Calif.-based chain, has overseen rapid growth since Prime’s 2001 start as the company expanded into a coast-to-coast 21-hospital chain.

Also,

Prime Healthcare has been criticized for aggressively admitting paying patients since its founding. Reddy once referred to an ER as a 'gold mine,' according to court testimony from the medical director of the first hospital taken over by the Prime founder. The reference, which the medical director said during a 2005 trial, was to numerous Kaiser and Medicare patients who could be admitted for further care.

Another doctor told the Orange County Board of Supervisors in 2006 that when Prime took over Huntington Beach Hospital, doctors were urged to admit insured patients with maladies as minor as a headache.

Yet, Prime Healthcare claims to honor the value of compassion:

 We provide an environment that is caring and conducive to healing the whole person physically, emotionally and spiritually. We respect the individual needs, desires and rights of our patients.

Dignity Health

Our second story comes from Nevada courtesy the Las Vegas Sun.   It involves Dignity Health, a multi-state non-profit health system.  The story basics are:

Two former St. Rose Dominican Hospital emergency room doctors say they were forced to transfer patients from one St. Rose hospital to another so its owners and their boss could profit — at the expense of patient safety.

The doctors allege in similar lawsuits that the frequent patient transfers among the three St. Rose hospital campuses — Rose de Lima and Siena in Henderson and San Martin in the southwest valley — put profit ahead of patient care. When they resisted, they say they were retaliated against and eventually fired.

The 3-year-old ambulance company that was used to shuttle patients was partly owned by both the hospital company and the director of the emergency department at the Siena campus at the time, Dr. Richard Henderson. According to their lawsuits, Henderson pushed hard in emails to ER doctors to promote patient shuttling and authorized bonuses to doctors who transferred the most patients to other St. Rose facilities.

Again, there was one telling incident:

Both lawsuits invoke the case of a gravely sick 16-day-old baby who arrived at St. Rose de Lima hospital, where a doctor determined the child needed pediatric critical care services at the Siena campus and requested a Henderson Fire Department unit for transport.

But according to the lawsuits, Henderson ordered that Community Ambulance transport the child instead. He made the request despite longer wait times for Community Ambulance compared to Henderson Fire Department’s quicker response times of 10 minutes or less, according to the lawsuits.

This article also described how money allegedly came before patient care:

The court papers include email exchanges between Henderson and the other doctors in the ER group. In a November 2010 email, he discusses ways to punish doctors who do fewer patient transfers and reward those who tally more transfers:

'(T)op quarter $1,000, next quarter $500. Bottom quarter up or out talk at annual evaluation.' In other words, according to doctors who received the email, Henderson proposed that doctors would be divided into strata based on who recommended the most transfers, with the top group winning bonus money while those who performed the least would eventually be terminated.

Transferring patients was such a priority that doctors were ordered to fill out non-transfer forms, explaining a decision not to transfer patients.

In another email, Henderson expressed concern that doctors were too quick to rule out transfers: 'How do you weed out the people that call a runny nose ‘unstable for transfer’? The performance we (admin) are looking for are transfers. Suggestions?'

A former member of the medical staff put it this way: There was constant pressure to transfer transfer transfer.'

Note that Dignity Health was until recently called Catholic Healthcare West (look here).  It still claims the mission:

 We are committed to furthering the healing ministry of Jesus. We dedicate our resources to:

• Delivering compassionate, high-quality, affordable health services;
• Serving and advocating for our sisters and brothers who are poor and disenfranchised; and
• Partnering with others in the community to improve the quality of life.

Note also that under its former name, Catholic Healthcare West has received our previous attention, for accusations that it overcharged uninsured patients (look here),  which it later settled (look here), and for settling a lawsuit claiming the system filed false Medicare claims (look here). 

Summary

 Just another day at the office....  Here are two more examples of how large health care organizations, in this case, large hospital systems, seem to put short-term revenue ahead of all other concerns, and in particular, ahead of patient welfare.  In both cases, the alleged practices seemed to make a mockery of the hospital systems high-flown mission or values statements.  In both cases, the hospital systems had records of past questionable behavior.  Yet many hospital systems have grown rich and powerful, and made their leaders personally rich, by trading on their reputation for community care and service, and marketing their warm and fuzzy missions and values. 

Over the years, we have documented over and over how leadership of health care organizations have subverted their organizations' missions and the values of health care professionals.  Yet for a long time, many health care professionals just kept their noses to their grindstones, ignoring what was going on or suffered in silence.  Now at least a few have broken the silence.  Health care professionals and society at large needs to hold large health care organizations' leadership accountable for their missions, and push out leaders who put their own pocketbooks and their organizations' revenue ahead of patients' and the public's health. 

More Signs of Organized Resistance? - Proposed Legislation for More Hospital Leadership Accountability

This year we note the beginning of action against the power of large health care organizations lead by hired executives and cronies who seem to put their self-interest and self-enrichment ahead of patients' and the people's health.  In 2013 we noted no confidence votes by medical school faculty (here), and university faculty (here) against academic leaders perceived as putting their power and wealth ahead of core values, actions by a state governor (here) and a big city mayor (here) against local health care systems perceived as putting their executives' enrichment ahead of their services to patients, and a union labor action (here) against a health care system perceived as putting executive enrichment ahead of adequate health insurance for low level employees.  We have posted about numerous examples of hospital (and other health care organization) executives receiving compensation far out of proportion to any realistic measure of their organizations' performance or positive effects on patients' or the public's health, and seemingly skimmed off the top of these organizations' budgets.

Now Modern Healthcare has reported about a bill in the California legislature aimed at supposedly not for profit hospitals that put money ahead of patients:

Officials with the California Nurses Association say the proposed law—AB 975—is an attempt to bring more accountability to money-making hospitals that use tax exemptions to turn tidy profits and give hefty salaries to executives.

Furthermore,

 Charles Idelson, spokesman for the California Nurses Association, said many profitable tax-exempt hospitals have lost the public's trust in recent years by making profits their top mission and paying salaries that allow executives to buy yachts while 'chipping away' at less-profitable services for women, children, the poor and mentally ill.

'What this bill does is, it really is an effort to increase transparency and make hospitals more accountable to the communities that they purport to serve,' Idelson said. 'Hospitals that are meeting their charity care obligation should welcome this process and understand that it is an opportunity to rebuild some of the public trust that they have lost through their other policies and practices.'

Hospital Leaders Deploy Talking Points, Including Logical Fallacies 

Perhaps predictably, hospital executives are not so happy:

'This is less about good public policy than it is about politics,' said Michael Hunn, chief executive for southern California hospitals at Providence Health & Services, which has five hospitals in the state. 'I would hate to see a political agenda further harm those that are marginalized in society,' Hunn said. 'No matter what the legislative and political process is, we need to keep in mind the human beings that it is our responsibility to care for.'

Note that Providence Health & Services is the ostensibly non-profit Catholic hospital system accused of putting paying executives multi-million dollar compensation ahead of giving low level employees minimally adequate health insurance as we posted here.  According to the organization's latest 990 form, Mr Hunn got $1,576,978 total compensation in 2011.  So one wonders which human beings he is feeling most responsible for?  Note also that the unsubstantiated allusion to a "political agenda," appears to be an appeal to ridicule, "a fallacy in which ridicule or mockery is substituted for evidence in an 'argument.'"  We have noted before how public relations flacks working for top executives of health care organizations seem to be very good at using such logical fallacies.  The argument Mr Hunn made seems essentially identical to an argument used against a lawsuit to end the tax exemption of a huge Pennsylvania hospital system that has apparently angered the communities which it is supposed to serve while paying its executives millions (look here).

In addition, 

Jan Emerson-Shea, spokesman for the California Hospital Association, said the bill's union backers were hiding their real agenda with 'red herring' issues like highly compensated executives and the superficial dissonance of not-for-profit organizations with healthy margins.

''Not-for-profit hospital' doesn't mean that you don't make a profit--all hospitals need to make a profit to keep the doors open,' Emerson-Shea said

Of course, that last assertion is not true.  Non-profit organizations need to avoid sustaining repeated losses to keep their doors open, but do not need to make any surplus to do so.  And the issue was not whether hospitals make small surpluses, but whether they behave like for-profit corporations, especially in regard to how well they pay hired executives.  So while protesting "red herrings," one spokesperson for hospitals, presumably for hospitals' hired executives, seemed to be arguing that the only alternative to a very large surplus and a very large reserve is a deficit.  By ignoring another obvious alternative, having a small surplus and a small reserve, this argument thus is derived from the logical fallacy known as the false dilemma.  The spokesperson also seemed to be arguing that a deficit inevitably leads to bankruptcy.  Of course prolonged deficits might lead to bankruptcy, but a single deficit would not necessarily do so.  Thus we see the logical fallacy known as the slippery slope. Note further that the argument used by the California executive here was again essentially identical to an argument used against a lawsuit to end the tax exemption of a huge Pennsylvania hospital system that has apparently angered the communities which it is supposed to serve while paying its executives millions.  So it looks like once again the hired executives and their public relations operatives have their talking points in line.   (See this post, from which our argument about the logical fallacies employed first in Pennsylvania came.)

Summary

It really is beginning to look like there is some sort of trend, albeit still small, towards organized resistance against the hired executives and cronies who have made themselves rich from large health care organizations, putting their self-interest and enrichment apparently before taking care of patients and serving the public's health.  As we have said ad infinitum....

Health care organizations need leaders that uphold the core values of health care, and focus on and are accountable for the mission, not on secondary responsibilities that conflict with these values and their mission, and not on self-enrichment. Leaders ought to be rewarded reasonably, but not lavishly, for doing what ultimately improves patient care, or when applicable, good education and good research. On the other hand, those who authorize, direct and implement bad behavior ought to suffer negative consequences sufficient to deter future bad behavior.

If we do not fix the severe problems affecting the leadership and governance of health care, and do not increase accountability, integrity and transparency of health care leadership and governance, we will be as much to blame as the leaders when the system collapses.