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Integrated Systems Part 4:
Community Need or Pursuit of Market Share?

by Dawn J. Lipthrott

Summary of harm to independent physicians:
Adventist Health/FPMG and similar systems tend to claim they are hiring physicians because of 'community need'. While that may be true for a small portion of its hiring, in most cases, recruiting physicians is about grabbing more market share, assuring referrals to their facilities and downstream referrals through patient steering, and pre-empting competition. Hiring unneeded surgeons and other physicians creates bloat in the system and raises the price of healthcare. While the focus here is on general surgeons, the same patterns happen in other specialties and even in primary care. The focus should be on improving quality, which would draw more volume, rather than setting up system employed physicians in competition with independent physicians. Make it a place where patients want to go and physicians want to recommend and use for their patients.

• Community Need vs. Market Share & Revenue
• Duplicating a General Surgery Residency

Community Need vs. More Market Share and Revenue

'Community need' would mean recruiting physicians :

a) to serve rural areas or underserved groups
b) to reduce excessive wait times for appointments with certain types of physicians
c) to reduce the burden on existing physicians due to rapid population growth or other factors

a) Using Adventist Health/FPMG-FHMG as an example, frequently recruited physicians are put in high income areas like Winter Park, Celebration, Maitland, Longwood and East Orlando. These areas have plenty of physicians and easy access -- and good insurance to pay for health care.

b) As seen in Part 2, in the case of Central Florida, there were no wait times for surgeons except Adventist/FPMG's (FHMG) surgeons. Yet, Adventist Health hired over 11 general surgeons, in addition to numerous other specialists and primary care physicians in just over a 2 year period.

c) Florida Hospital's own presentation shows that there has not been any increase in population growth, yet they continue to hire.

 

 

 

 

 

 

 

 

 

 

The demand for surgical procedures has not increased signficantly and certainly does not present a need for hiring more surgeons. The Florida Agency for Health Care Administration shows the following rates for the CPT codes associated with those procedures that are the 'bread and butter' common procedures performed by general surgeons -- inguinal hernia repair, breast procedures like lumpectomies and certain biopsies, and minimally invasive gallbladder surgery. There was very little change in demand for procedures during the years Adventist Health/FPMG-FHMG started its surgeon hiring campaign.

generalsurgeryOrlando

 

 

 

 

 

 

 

So while the need for procedures did not increase, what DID change with the hiring of Adventist/FPMG-FHMG surgeons is market share of outpatient procedures at Adventist owned Florida Hospitals, especially in comparison to the only major competitor, Orlando Health (formally known as Orlando Regional). You can see that as Florida Hospital numbers increased, numbers at other hospitals decreased. That is not about 'community need'. If it were about increased population and increased need for procedures, all hospitals and all surgeons would show increases. In Part 3, we showed the decline in independent surgeon volume as Adventist/FPMG-FHMG surgeon volume increased. It's about revenue and market share.

 

 

 

 

 

 

 


Source: Florida Agency for Health Care Administration.

Clearly as hospital systems capture market share, they capture revenue, both for the primary procedure, as with general surgeons, and often for follow-up treatment like radiation or chemotherapy. A study in 2007 by Merritt Hawkins from a survey of hospital Chief Financial Officers and shows what different primary care and specialty physicians bring to a hospital's revenue. This number is based on revenue for the hospital that is generated by a single full-time physician's typical admissions, referrals, procedures, lab test, and imaging.

 

 

 

 

 

 

 

 

 

 

 

So, it certainly makes sense why they would want all these physicians in their fold. However, this revenue is also available from independent surgeons and other physicians. It seems to me that what would be better both for patients, for physicians, for hospitals and for healthcare would be to focus on improving quality of care, efficiency (but not at the expense of quality) and timeliness within large hospital systems so that a particular hospital system would be the hospital/system of choice -- the place patients and physicians WANT to go. Focus on quality would make more sense. The physicians that are already in the community would more fully support the hospital and services if they believe that hospital or services is the best quality. Continual expanding of the system and competing against physicians who do send most of their patients to the system creates negative effects. It is interesting that in the Hospital Care Quality Information from the Consumer Perspective (HCAHPS) showed that the percentage of patients (I assume this is inpatient) that would definitely recommend Florida Hospital (Adventist Health) was 60% while their competitor had 72% (For this and other information on quality/satisfaction measures for hospitals in your area, click on ths Hospital Compare website.) The percentage of physicians who would definitely recommend was 51%.

To me the focus should be on concerted effort to find out from those physicians and patients why they would or would not recommend the hospital so that the needed improvements could be made that would make physicians more willing and more confident of referring to the hospital and its services. Bigger is not necessarily better -- better quality is what helps draw volume. You wouldn't need to be worrying about loyalty profiling or hiring your own physicians to compete against community physicians.

Did we really need another general surgery residency program when Orlando Health already had one?

Under the banner of 'community need', Adventist's Florida Hospital established a general surgery residency program, even though Orlando Health's main hospital about 5 miles away already has a program and it is not full -- nor are other programs in Florida. Programs can always ask the ACGME to approve more slots, if needed. But Florida Hospital hired 6 surgeons to teach 2 students, with only 2 students to be added per year. Staff is totally out of proportion to the student need, and it is a way to bring in high revenue surgical procedures. It would seem that with the new medical school, they would have tried to provide more variety of residency options, but many others are not as profitable. The Florida Hospital general surgery residency site states: Our dream is to produce surgeons oriented toward care of the whole person and who might consider staying in the Central Florida community. Does that mean that the hope is that they will join FPMG since it would be next to impossible to establish an independent practice in such an anti-competitive environment?

But the focus on expanding continues:

 

 

 

 

 

 

 

 

 

 

In this time of surging healthcare costs, this focus on expanding for revenue and market share, not only of Adventist Health, but systems like it across the country are part of what drives up healthcare costs. While we are all tightening our belts and so many families are wondering how to keep paying their health insurance or who are living without it, the corporate approach to healthcare expansion continues. Excessive spending for corporate goals and expansion for the sake of expansion becomes part of the ethical issue inherent in these hospital based integrated delivery systems and in other areas of Adventistcostofhealthcarecorporations' influence and activity in healthcare. This uncontrolled growth is also reflected in decisions like Adventist Health currently in the process of building a new $20-$30 million corporate headquarters. Here is their current headquarters building. Do they really need to spend $25 million on a new one?

 

 

 

I am not naive. Hospitals have to make money. But instead of flooding the area with physicians who do not reveal they are part of the system, it would make more sense to me as a patient to focus on improving quality, to make their services the ones I as a patient would seek and want. In surveys, only 51% of physicians would recommend their hospital to others. And only 61% of patients. However, improving quality takes much more work than simply expanding physicians, beds, and services.

Integrated systems like this are just one piece of the healthcare puzzle that raises ethical questions. They have to make money to provide healthcare. Where does it cross the line in terms of ethical behavior? At what point do we lose independent practice and have no choice? In the current volatile debates about healthcare reform, people are enraged and afraid of government taking over their health care. Maybe we all need to look in our own back yards to find out what corporate entitites ARE taking over more and more of area healthcare! It is not only happening in Orlando. It is happening across the country.

I was fortunate to have a great experience at Adventist owned Florida Hospital's outpatient surgery center several years ago. I wrote a letter of commendation for the nurses who were wonderful. But I was most fortunate to have an experienced independent surgeon, whose only commitment was to me, the patient, and who would have taken on all the corporate establishment if needed to make sure I had the best care. I want to always have that ability to choose an independent surgeon or physician whose decisions are focused on what will best serve the patient instead of having to balance patient need with what will serve corporate goals. Patients and physicians together need to protect patient choice, now and for the future.

Overview: Ethical Issues in Hospital Based Delivery Systems

Part 1: Deception Through Concealed Onwership/Employment of Physicians

Part 2: The Power of Patient Steering by a Large System

Part 3: Harms to Physicians and Patients

As always, I welcome your constructive comments and suggestions about the material on this website and how we can all be most effective in co-creating the kind of healthcare system we all want.
E-mail me at ideas@ethicalhealthpartnerships.org
© Dawn Lipthrott, Ethical Health Partnerships, 2009 www.ethicalhealthpartnerships.org

(May be copied and distributed as long as this identifying information is retained on copies.)

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