Our healthcare environment is in a constant state of change whether we consider the nuts and bolts of diagnosing and treating patients or if we consider the business of healthcare. For most physicians and non-physician providers, the most fulfilling part of our day is the time we spend with our patients. Though diagnostic and therapeutic algorithms are regularly evolving, standards of care typically change at a pace that most providers can keep up with using readily available print and digital resources.
For most providers, however, trying to navigate the dynamic environment comprising the business of health care results in tremendously less fulfillment. It’s safe to suggest that dealing with the business of medicine creates angst and dissatisfaction amongst many. Recent studies identify major factors of provider dissatisfaction to include the electronic health record, loss of clinical autonomy, increased regulatory and reporting responsibilities, and insurance requirements for both authorization and reimbursement. Provider wellness and burnout have only recently become a major focus of professional societies.
In 1918, the American College of Surgeons created the first formal, medical staff organization in response to problems of that era—unnecessary surgeries, fee splitting and to prevent unqualified physicians from performing surgery. It is important to note that early in the 20th Century, formally measuring quality outcomes was non-existent. The original intent for the creation of an MSO was quality control through a group of peer physicians, and the MSOs’ primary purpose was to hold physicians collectively accountable for patient safety and clinical performance. Throughout most of the 20th century, physicians owned autonomous practices as solo practitioners or as part of larger groups. Very few physicians were employed, and the members of the MSO were independent, elected by peers, and functioned in an open medical staff model.
In 2018, for the first time in US history the percentage of physicians employed by hospitals (47%) exceeded those who were owners of their own practice (46%). The change in employment status is a culmination of a decades-long trend that has ebbed and flowed along with the market and policy landscape and has included hospitals buying up independent practices and large organizations merging to achieve economies of scale and better negotiating leverage with payers. A consequence of more physicians being employed by hospitals is a fundamental change to the composition of medical staff leadership of the institution which creates new challenges to conflict-of-interest relationships between the medical staff and the hospital administration. These conflicts of interest exacerbate physician dissatisfaction considering the high rate of turnover in the C-suite in many US hospitals.
A 2018 survey by The Physicians Foundation found that 46% of physician respondents viewed the relationships between physicians and hospitals as somewhat or mostly negative and adversarial.4 Stability at the highest level of leadership plays an important role in the performance and survival of an organization. Because of the unique mission, culture, and highly specialized workforce of hospitals, stability and continuity at the top becomes even more important. However, changes in top leadership occur rather frequently in U.S. hospitals. When MSOs are now expected to participate and agree with a healthcare organization’s business strategy, a revolving door in the C-suite creates chaos and potentially distrust. As recently as 2013, Becker’s Hospital Review published sobering statistics from a Black Book Rankings poll. CEO tenure, on average, is 3.5 years. Fifty-six percent of CEO turnovers are involuntary, and within two months of hiring a new CEO, 87% of CMOs are replaced. Within 9 months, half of the CFOs, COOs, and CIOs are replaced by the new CEO. It is exceptionally difficult to create and maintain a culture of trust and faith in any business strategy with frequent C-suite turnover.
Provider trust concerns directed at the administration are only amplified when considering the challenges of a mixed medical staff model that comprises employed providers, contracted providers and independent providers. When a large majority if not all of the medical staff providers across all departments are employed, for example the Kaiser Permanente system, there is inherent alignment between providers and the administration with regard to business strategies. However, in an open medical staff model that includes a similar representation between employed and independent providers, inherent conflicts may evolve when medical staff recommendations surrounding quality care delivery are not aligned with either the hospital administration or the local hospital’s parent company’s business strategy. This conflict concern has been identified by the AMA in their document addressing the Principles of Physician Employment:
- A physician’s paramount responsibility is to his or her patients. Additionally, given that an employed physician occupies a position of significant trust, he or she owes a duty of loyalty to his or her employer. This divided loyalty can create conflicts of interest, such as financial incentives to over- or under-treating patients, which employed physicians should strive to recognize and address.
- Employed physicians should be free to exercise their personal and professional judgment in voting, speaking, and advocating on any matter regarding patient care interests, the profession, health care in the community, and the independent exercise of medical judgment. Employed physicians should not be deemed in breach of their employment agreements, nor be retaliated against by their employers, for asserting these interests.
Beyond those physicians that are employed directly by the hospital, an additional group of medical staff members that may have an equal conflict in this setting are those who have exclusive contracts with the system. Commonly, this arrangement applies to hospital-based services such as radiology, pathology/laboratory medicine, emergency medicine, anesthesia, and hospitalist medicine. Having their income completely dependent upon an exclusive contract with the hospital creates the perception that disagreement with hospital administration could lead to loss of the exclusive arrangement. Obviously, the original intent and function of the MSO have morphed significantly from ensuring patient quality and safety.
Given this dilemma, in a mixed medical staff model, how do employed or exclusively contracted physicians, who are elected to positions of medical staff leadership by their peers, successfully represent their medical staff peers—especially when what’s in the best interest of the medical staff is in conflict with the administration?
Perception is reality. To believe the administration would go so far as to blatantly threaten an employed or contracted medical staff leader to place their allegiance to the administration over their responsibility as an elected medical staff leader is naïve at best. The implications are inherent and implied. The message is often well defined by the administration, for example, through the sudden focused business review of a contracted service line when there is the perception of dissension from administration’s intent by the service line’s members. In our own markets, at one institution all the physician members of the board of trustees are either employed or contracted. In the same institution more than half the members of the MEC are similarly either employed or contracted. Recently, one of the contracted providers lost their contracted position with the administration and fell into conflict regarding a business relationship. As an independent member of the medical staff, this provider maintained medical staff membership and active practice. When the administration chose to remove a particularly critical resource from the hospital that was uniquely used by this provider, it is most intuitive to perceive that this was in retaliation for the provider’s actions against the administration, though the administration provided “reasonable justification” for their decision that was explained outside the context of the conflict with this provider. Perception is reality . So how can a mixed medical staff model conceivably assure that independent providers will be properly represented when it comes to decisions that affect their patients and the care they provide when board and medical staff leadership positions are predominantly held by employed or contracted providers who cannot reliably exercise their duties as elected medical staff representatives for fear of retribution? Perception is reality and the perception is clear. There is no reasonable expectation that an employed or contracted provider will be willing or able to follow the AMA guidelines and “exercise their personal and professional judgment in voting, speaking, and advocating on any matter regarding patient care interests, the profession, healthcare in the community, and the independent exercise of medical judgment.” Likely, the most reasonable solution is for Joint Commission or other certifying agencies to require that a certain percentage of membership of the MEC and the board be reserved for independent providers in the setting of a mixed medical staff model to assure fair representation and negate the conflicts inherent to the employed and contracted medical staff leaders. That would be the only way to assure that medical staff obligations to “exercise their personal and professional judgment in voting, speaking, and advocating on any matter regarding patient care interests, the profession, healthcare in the community, and the independent exercise of medical judgment” are protected.
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