An Excela Health System document warning staff physicians that their staff privileges may be in jeopardy if they enter business arrangements that compete against Excela has drawn attention from a statewide physicians group and, according to a local health law attorney, could face legal challenges.
The memo — a summary of the Westmoreland County health system’s medical staff development plan — lists the system’s staffing needs in specific specialties. What concerns doctors are later passages stating, for example, that eligibility for staff privileges requires “a willingness to work in a collaborative manner and support the mission, vision and values of Excela Health.”
That support means avoiding “potential financial conflicts of interest,” the memo says, such as establishing a financial relationship with UPMC or Highmark-affiliated groups — unless that relationship is negotiated by Excela. It also says a conflict may exist if a physician has financial ties to any competing ambulatory surgery center.
“Half the document dealt with ‘potential conflict of interest’ information,” noted Jan Jennings, president and CEO of American Healthcare Solutions consultants, Downtown. “If I were a private practice physician, I would be very concerned about getting squeezed out.”
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“They’re saying, ‘You can’t associate with some other entity unless it is done through us,’ ” said retired general surgeon Donald Brown, who once worked for Excela and is currently a trustee to the Pennsylvania Medical Society for Westmoreland, Lawrence and Beaver counties.
In recent years, more physicians have been selling their practices to health care organizations. Current estimates are that 60 to 70 percent of practicing physicians statewide are now hospital employees, and health systems and hospitals continue to buy physician practices to boost patient referrals.
But some doctors want to remain independent, controlling their own practices while still maintaining their hospital admitting privileges.
Local independent physicians in Westmoreland County “are not happy, but they don’t want to say a lot publicly because they want to protect their livelihood,” Dr. Brown said. “Excela is a monopoly in this county. There’s nowhere else to go. It is an extremely intimidating document.”
Excela spokeswoman Jennifer Miele would not confirm the document’s content, saying in an email that “a medical staff development plan is a confidential document.” She added that “it is commonplace for a healthcare organization to have a medical staff development plan and a conflict-of-interest policy. If you check with other healthcare organizations, they would certainly tell you all of that.”
To a degree, the disagreement illustrates some of the dynamics in play as hospitals and physicians navigate a quickly changing health care environment, with major overhauls going on nationally and a high-stakes battle locally between the region’s two health giants, UPMC and Highmark.
“A lot of health systems are having challenges with reimbursement and challenges surviving in the market, especially for a smaller hospital in an environment where there are 800-pound gorillas throwing their weight around,” said physician Gaspere Geraci, vice president of quality and value for the state medical society.
Hospitals commonly develop medical staff development policies to monitor their manpower needs, Dr. Geraci said. “There are unwritten [conflict of interest] policies that may exist. What makes this instance stand out is because it was written down and it was formally adopted.”
Ms. Miele acknowledged that Excela expects to post “double-digit millions of dollars” in operating losses when fiscal 2012 audited results are released in two weeks, although investment gains should put the health system in the black overall.
She said much of the losses last year are attributable to Excela expanding its medical staff, including four obstetrician-gynecologists, six hospitalists, two general surgeons, two orthopedic surgeons, a vascular surgeon and a rheumatologist.
“We’re not concerned about the finances. The first two months of this fiscal year look promising. This is a financially viable healthcare organization,” she said.
Date: September 15, 2013