Tag Archives: Business

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House Bill Aims to Curb Employers Ability to Force Doctors to Leave State

I prepared this potential op-ed prior to the death of HB 2931 in the Washington legislature. Non-compete clauses (also known as restrictive covenants) in physician contracts have had a devastating effect on the primary care workforce in Vancouver, Washington and other border regions of the state.

I understand the need to protect employers from the costs of recruiting a physician who then turns around and threatens to compete from across the street (really… who does that?) On the other hand, large groups in the state have thrown their weight around and hospital systems have thrown temper tantrums. I would prefer to eliminate restrictive covenants for family physicians, but there is good evidence from numerous sectors fo the economy that putting sharp limits on the enforceability of restrictive covenants is good for the economy. The best example is Silicon Valley,  where companies treat their employees very well, manage them extraordinarily well and continue to work with the intellectual capital they attract long after it leaves to spin off new entities and foster even more innovation.

Other physicians need the support, but so do baristas, hairdressers, nail spa workers and tattoo artists, who are unfairly unlimited by the legacy companies. I have to believe it makes these companies lazy and less considerate than they would be otherwise.

There were several bills, but I addressed the one widely regarded as the most likely to cross to the senate. In the Senate there was SB 6625 sponsored by Senators Conway, Hasegawa, Keiser, Chase, which restricted non-competes to 6 months for hourly wage workers. HB 2406 was sponsored by Representatives Manweller, Sells, Stanford, Magendanz, Tarleton, Moscoso, Ormsby and S. Hunt and stipulated that non-compete clauses were null and void in the case of a listed number of low hourly wage work such as fast food and dry wall applicators. HB 2931, sponsored by Representatives Stanford and Ormsby was the most sophisticated of the three and tried to outline certain parameters for which it is inappropriate to impose a non-compete. In short, if you are not an executive, non-competes would not be enforceable beyond one year.

None of the bills proposed geographic limits as “reasonable” in a non-compete.

All I can say is “we’ll be back,” even though I am poised to become an employer of physcians and stand to benefit from the applicability of these absurd covenants. There is still this thing called “doing the right thing.” Here is my unpublished opinion piece.

 

House Bill 2931 limits how employers can impose non-compete agreements on prospective employees and will be good for all industries in the state, although it will have an unexpected beneficial effect on health of Washingtonians. The bill received a vote on the House Floor Tuesday and will now go to the Senate for consideration.

 

Non-compete agreements in health care protect hospitals and larger medical groups, ostensibly from the high cost of physician recruitment. However, once a doctor agrees to be employed by a medical group, these agreements become a not-so-subtle means of controlling the doctors. An unhappy doctor could be required to leave the city, county or state because the agreement states that he or she is not allowed to practice their profession under any circumstances within the exclusion area. Since doctors have families and children, the non-compete agreement becomes a leash which can only be broken at substantial personal cost, which many families simply are not willing to accept. In one draconian example, one employer in Southwest Washington defines the geographic exclusion area as three counties. The doctor is often left with a Hobson’s choice of staying at an unhappy job with incompetent and potentially dangerous management or leaving town. No one is left to advocate for you, the patient.

 

Non-compete agreements are outrageous and unethical in healthcare. They disrupt the doctor patient relationship and hurt our workforce. When physicians leave the state, even for a short period of time, they rarely come back. Most medical groups spend a huge amount of money recruiting, but nobody tracks losses when doctors leave. In the end, it is the patients who suffer when they lose a trusted provider. I have never seen an administrator look an elderly woman in the eye and explain how his contract forced her doctor out of town.

 

It should come as no surprise that the Washington Hospital Association is profoundly opposes HB 2931. The Washington State Medical Association debated the issue heatedly, and emerged officially neutral. At least one large group made veiled threats to leave the association if even a watered down proposal were considered. The Washington Academy of Family Physicians is the only group that supports the bill, reflecting the public health orientation of primary care sector. Oddly enough, Republicans tend to like bills like HB 2931, because they foster free markets. Democrats like them because they protect employees. This is a bipartisan issue that aims to clip “Big Corporate,” not “Big Government.”

 

In many industries, non-compete agreements are merely an over-reaching effort to own their workforce. As one misdirected lobbyist asserted at the House Labor Committee, “our people ARE our intellectual property.” One wonders how Silicon Valley has thrived, since California is a place where these covenants are nearly completely unenforceable. Perhaps economic development is constrained when tech companies are allowed to impose draconian non-compete clauses?

 

There are numerous options which would make covenants more fair to communities, patients and doctors, but none of the corporations that run the state’s health care apparatus will even discuss the matter. It is time to reclaim the natural rights of individuals to work where they please without undue interference from anonymous corporations. Now it is up to the Senate to make HB 2931 law.

 

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Employed Physicians

This old post is here because I have been thinking a lot lately about the impact of employed physicians on a community’s health. Since this post was written, I have worked for a large hospital-based primary care practice where I was being pressured to produce referrals and tests. When I left, the company waived any non-compete clauses. If they had elected to enforce them, my current community would have been deprived of a family physician in an area of primary care penury. So the lack of independence in primary care may lead to overuse of specialty and technological services and deprive communities of the specific function (primary care) that makes health systems more efficient. This 2008 post contains the seed of an idea to develop a sustainable business model for the independent primary care physician in the interests of the public health. But there are several steps I will have to fill in, so stay tuned. Meanwhile, enjoy…

 

I had an interesting conversation with a feller from Texas the other day. I was telling him how I had formed my impressions of docs in employed situations from my experience on the East Coast. It just seemed that the solo practitioner was almost dead, if not completely so. Even in rural Maryland, it was more likely to find groups of two or three docs in private practice fiercely holding on to their independence in the face of large single- or multi-specialty groups encroaching from the suburbs. Many of the large groups have found Stark-compliant ways of working with nearby hospitals, or, in some areas, are outright owned by the hospitals.

I reflected to my acquaintance how different it was out here in the Western desert regions, where it seemed the employed docs sometimes felt they could act like it was their own shop and close up with less than a day’s notice to stay home with the kids or go duck hunting or take whatever break is justified by a hard-working, highly-valued provider of a needed service by a grateful community.

You can’t do that when there are 50 physicians and 300 employees whose work schedules are dependent on physicians providing billable services on razor-thin margins.

Well, maybe you can. It’s all about the supply and demand equation, isn’t it? If there aren’t enough primary care physicians to go ’round, the tolerance for behavior inconsistent with a larger organization’s overall well-being is better tolerated. And certainly the local physicians’ culture has an important role to play. Texas docs, I was told were nearly never in large groups and they never tolerated overbearing administrative intrusions to their clinical or vocational independence.

I walked away from my conversation with a tall and lanky Texan (sorry for the cliche, but he was tall and nearly lanky), with an understanding of how different the situation is for physicians across the country and how my approach to change management and performance management is colored by my East Coast experience.

In areas where managed care penetration is high, employed physicians predominate by choice, and a high regard for academic analysis output exists, there is an atmosphere of understanding and willingness to work within a corporate environment. Evidence-based medicine, quality and performance improvement are all perceived as methods to improve health care delivery systems for the betterment of the community. Physicians understand the choice to enter employed positions and accept the trade-offs, giving up some independence for the sake of fewer administrative headaches, better benefits and perhaps, a reasonable lifestyle.

In areas where one or more of these conditions do not hold, physicians resent encroachment on their judgment, style or authority and mistrust the motives of administrators of all stripes. EBM, QI, and PI are bridles of control to be avoided at all costs and administrative entities are regarded to exist for their personal betterment and not the benefit of communities nor the doctors, Such physicians enter into an employed arrangement begrudgingly and only if they feel that their work is not subject to the kind of oversight that will reduce their independence.

OK, I’m dumb. I didn’t realize the obvious until now. I have grown up in academic environments which are so dominated by various stakeholders that the independence of the community physician a distant recollection from the stories of William Carlos Williams; the vague memory of a historical work of fiction read in childhood. The East coast and its large cities are places where independent practitioners are aberrations or mavericks worthy of awe, disbelief and admiration.

Elsewhere in the country, in smaller cities and younger landscapes, the independent practitioner has thrived and the battle for physicians’ independence is much more vigorous.

It is possible to engage physicians any number of ways in future improvements to health care. The lessons of the East tell me that the best way is not confrontational. Without physicians, no meaningful reform is possible, despite the best efforts of other stakeholders. On the East Coast, docs have been beaten into submission. It took a long time, created a lot of ill feelings and did not accomplish much. The rest can do it faster, more collaboratively and with greater focus. The first step is to get a clear understanding of the situation and adapt to local environments.

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Revolution or Evolution

I resurrected this old blog post because it reflects some of the most basic and fundamental issues that were not addressed by the ACA. It is as current today as in 2008. Changes in health technology, consumer-facing health tools, payment reform and Meaningful Use have not moved the needle on establishing a unified view on the the nature and purpose of health care systems in general.

 

Call me a skeptic, but this health care system (which does not serve the majority of its stakeholders) is not likely to change overnight, even (especially) if Obama wins the election. What we have in the US is an undesigned, organic, chaotic system which accomplishes exactly what it is designed to accomplish. Problem is, everybody thinks it is designed to do something different and the result is incoherent.

Some treat health care as an entitlement. It is the right thing to do because nobody should ever go without access to care in the face of illness. Illness is frightening, as are many other things in the world. But fear of getting sick is about as good a justification for universal health care as universal access to… say, attorneys. It may be a good thing to do, but I would rather push for universal access to information.

Many physicians see the health care system as a vehicle for the intellectual challenges and exercises in skill required of the practice of medicine. As an exercise in meritocracy, health care should be more available to those best able to pay for it. There has always been and will always be value in having uncommon skill or knowledge. I firmly believe that this drive, rather than the profit motive, is what pushes most physicians to specialize, sub-specialize and constantly and marvelously push back the limits of what can be done with the human body.

Health systems are also an opportunity to find a margin. Yes, health care is a business and in America, profit is not a dirty word.

Health care is also as “issue” for politicians, and to the extent that it affects voters, it influences the government agenda. It represents a way to get a vote.

Health care can be seen as a public health measure, which I tend to do. This suggests that those interventions that are most likely to help the health of populations (as distinct from the health of individuals) should get the most resources. With all due apologies to my sub-specialty colleagues,who are critical to our health care infrastructure from many perspective, it is here that primary care wins out hands down.

In fact, the broader the definition of health, the less medical it becomes. Securing water, adequate shelter, safe employment, reliable food sources, traffic safety and basic literacy are health issues that hardly fit into our usual conception of health care or the current reform debate. Immunizations, prenatal care and primary care are the most cost-effective things the medical world has to offer. PAHO and WHO publish guides for policy makers.

A health system like ours is at cross-purposes. Many advocate a total overhaul but that’s not how change happens. Incremental change is more likely. Even if we were to reach some sort of tipping point in technology, or delivery, or insurance we will not likely see a complete change in a high resource service sector. Despite the complexity of the health system, care is still delivered one-on-one. All other discussions remain MBA-speak appropriate for the Harvard Business Review and little else.

Don’t get me wrong, I like what I see in the health reform world. I like Dr. Val. I like Steve Case for that matter. I think what they are doing in consumer-driven health care is valuable. Jay Parkinson sounds like a smart guy and I might even ask him what he thinks about spreading his model to rural areas. I believe that the Future of Family Medicine project has enormous potential for change as evidenced by the TransforMED project and the rising popularity of the medical homes concept. PHR‘s have potential. RHIO‘s even more.

But none of these ideas are sufficiently transformative to represent the answer to a broken health system. Together, they represent a significant change in direction that incrementally may have an outsize impact.

The single notion that could have the greatest effect is the one that says we cannot and should not provide for every possible health benefit under the sun.

Rationing by cost (a barrier to access) is more acceptable than rationing by mandate, regulation, insurance company ruling or queuing. No rationing does not exist in any industry.

This means we must prioritize the things we cover. We make decisions all the time about what is covered and what is not covered, but we currently decide based on politics; that is to say the sum total of influence exerted by stakeholders and lobbies.

Frankly, it’s not a bad way to do it; I don’t believe in central planning. Look at Canada. But a better way to do it is follow the data. Otherwise every right wing crackpot and left wing entitlement-creator will have outsize say according to the way the political winds blow. Right now, we have two nutty ideas floating around: one way is expanding health care coverage under government tutelage and the other is giving tax credits to poor people to buy health insurance (source: Pikalaina). As far as I’m concerned, government should only guide and create an environment for market forces to accomplish common goals (in this case, health.) Expanding government programs is not the way to do it. Tax credits for poor people are ridiculous; I can’t get my poor patients to spend on bus fare if there is no IMMEDIATE benefit.

McCain is also promoting an idea to allow insurance companies to compete across state lines. Bob Vineyard at Insureblog seems to feel it won’t work because of differing state mandates (the analogy is with credit card companies). In other words, states are already making choices about which benefits are to be covered. This may be viewed as rationing, or alternatively, choosing which parts of health care to subsidize. In fact, I prefer the subsidy position, because it puts us on more firm moral ground. If we chose to subsidize any industry, we should do it on the basis of data and a specific goal in mind. A utilitarian like me will view government’s responsibility as creating the greatest common good i.e. the most wellbeing. This merges nicely with the broader definitions of health.

What I like about the McCain idea is that it represents incremental change. To address Vineyard’s correctly pointing out that state mandates represent a serious obstacle, they are not insurmountable. A federal rule for companies selling insurance across state lines could be that they meet or exceed the benefits coverage of most states. These policies will be more expensive than policies sold in low-mandate states, but provide useful alternatives for those willing to pay. They will represent real competition in high mandate states, which are sufficiently populous to get people asking questions. There are other legislative and regulatory hurdles to get over, but ideas should not be discarded before a full and public airing.

Transparency in the insurance industry and in hospital pricing, expanding coverage for the uninsured and under-insured, a more flexible tax code to allow for the purchase of alternative insurance products, increasing adoption of IT and maximization of its potential in measuring and affecting quality, aggressive changes in models of care delivery and defining different levels of coverage according to health impact analysis are all a small part of the solution. Overall, there is a tremendous amount of value yet to be unlocked in the US medical system, but tearing a system apart to rebuild it from the ground is not a good option. Revolutions tend to be more destructive than creative.

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Disruptive Innovation

This is based on an old post from The Physician Executive when I first started thinking about the place of disruptive innovation in health care delivery.

 

The problem with disruptive innovation in health care is thinking twice about how it applies.

A couple of precepts before we begin, just so we’re all on the same page, or at least the same library:
1) First the technology can exist for a long time before it is adopted, if at all. It is in the application that an innovation potentially becomes disruptive.
2) Adoption is likely to come from smaller players as new technologies are frequently overlooked by the big players.
3) The innovation is not disruptive to the consumer. It is disruptive to other producers. The consumer adopts it because it is simpler and cheaper than the alternative.

In my world, the innovation will come from changes in the way health care is delivered, not about a sexy new scanner or robotic procedure or even a new iPad app for diabetics. And here, observations about how slowly such innovations are taken up become pertinent.

I would argue against big business. Lately, consolidation has caused health care to be delivered out of monolithic medical systems incorporating primary care, specialty, allied health (physical therapy, audiology, optometry among others) and imaging services. This creates a few problems:

1. Like big government, big business generates an entrenched bureaucracy that is resistant to change, difficult to navigate and primarily interested in perpetuating itself.

2. Incentives are skewed to generate more testing and services. Primary care, when properly delivered, reduces downstream costs to the system, meaning less revenue for the organization.

3. There is less choice (see availability of reproductive services in areas dominated by large Catholic health systems) and the cost advantages of scale initially required to reap the benefits of the technology deployed are rarely manifest.

Carving primary care out of the health care delivery system and providing a special place for it with better revenue, greater legal protection (e.g. tort reform, voiding non-competes) and subsidizing an infrastructure to allow small, personal, relationship-based practices would be a tectonic shift on how we think about health care.  Now that would be disruptive; and just as the iPhone disrupted the PC market, it is only primary care that can disrupt the medical tech (specialty/referral/imaging) sector.

Maybe this is why Clayton Christensen believes health care is ripe for disruptive innovation, although the comments confirm to me that he has not yet found the right disruptions. It will be up to people like Dave Chase, Rob Lamberts and Brian Forrest to figure it out. I could include others, but why take sides?

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First Post

I used to write a blog several years ago under a pen-name. I became disillusioned around that time; not with blogging as much as with my job. I stopped writing as my anger was leaking into my writing. I was supposed to be “The Physician Executive” but found myself unable to hold a job, buffeted by my own ego and surrounded by some more than disingenuous people. Nothing in my career as a physician, teacher, manager or self-described policy commenter had prepared me for the foulness of the human struggle.

Yes, I got involved in a political battle at work and found myself oddly unprepared for the interpersonal and political battles which presented themselves. The blow to my confidence was such that my next job, accepted mostly because I needed a job, went just as badly. Well, ’nuff said.

I have since gotten back on my feet.I worked my way into a private practice, where I am now a principal and am working on developing a medical home and honing our quality performance. During my Master’s, I particularly honed interests in Outcomes and Management with a view to quality management. I feel reasonably well-integrated in the community; I get along with most people, but am already aware of some people who stand in opposition to my ideas, attitudes and practices. That’s OK, nobody in the world only makes friends without being a little obtuse.

Over time, I have regained confidence in my insights and my ability to communicate them. I no longer intend to write just about health care, management and policy items, or be in search of ideas for persuasive essays. This is not a blog with its own brand identity. Writing for a local magazine, I requested republication rights. Everything I publish should eventually come under the umbrella of dinoramzi.com.

My wife and I have started two companies, one was a consulting company that took in some revenue between jobs, and is now a small holding company with investments in several healthcare (and non-healthcare) fields. SanZoe Health is in pursuit of ideas that can improve the delivery of primary care, because it is the best way to improve the health of populations (at least as far as health services are concerned). SavingHealth.com is a web site that will deliver evidence-based medicine (EBM) insights from the perspective of a practicing physician. There was a time I would perform reviews for the teaching program when I was involved in teaching at Emory. I have published an evidence-based review in a large circulation continuing education journal. Now that I am in practice, I find I still use the skills. These skills may be scarce, but they are definitely not unique but nobody is actively blogging them. So we’ll get this one up when we get the time… between patients, you know.

We also started PanZoe, which should begin accepting donations within a month or two to help deliver innovative primary care to uninsured or underinsured Americans. We will begin locally, in the Camas/Washougal area, suburbs of Portland Oregon. This is our status as of June 2013 and I do not intend to update this first entry.

At this time I am also the President of the Clark County Medical Association, an alternate delegate to the Washington State Medical Association, and an active member and delegate to the Washington Academy of Family Physicians.

Politically, I am conservative, but you might not recognize my ideas as conservative given that the current crop of right-wingers are merely radicals to my eye. Many of them would call me a liberal. At the end of the day, I am an Independent who supports No Labels and the Congressional Problem-Solvers. Being a bit of a gadfly and calling out inconsistencies on both sides, I could be regarded as uniter of the parties; both sides can always rally behind the idea of throwing me out of the room!

The simple and effective communication of complex ideas is not at easy thing to do. It is a skill that requires a great deal of practice. I have not invested enough time in doing this, but have become aware that my head is exploding with innumerable multi-step ideas. There is no way to describe the role direct-primary care combined with reinsurance and a disappearing deductible for employers to avoid the Obamacare tax and improve the health of the population without building ideas one by one. I need this venue to develop the articulation of these ideas.

The greatest paradox and struggle of my life is that an intellectual path eventually takes you to a place of uncertainty, unknowing and doubt, which inevitably leads to either a sort of intellectual nihilism or on the other hand, to a succumbing to faith. I came backwards to the faith of my ancestors, to the world of Eastern Orthodoxy, mostly as a cradle Greek Orthodox. I accepted this world because of its inherent mysticism; although there is dogma in this church, there is much we acknowledge as unknown. All revelation is short of the blinding reality of God. I find echoes of Orthodox Christianity in the non-religious methodology of mindfulness meditation and most recently in “happiness” research and the concepts of “flow” and “social altruism.” My old professors are guffawing as I write, but this too is something by which I stand.

If by way of advocating for the things I am most passionate about, I run into something offensive, please forgive me in advance. It is not my primary purpose to advocate for any single entity; not for primary care or family medicine, not for the Clark County Medical Society, the AMA, the AFP or its state affiliates, my wife’s for-profit holding company or my non-profit foundation, EBM, mindfulness meditation or the Orthodox Church. But these things are reflections of who I am and what I care about.

I hope you will enjoy the blog and follow its evolution.