By Christopher Guadagnino, Ph.D.

Allegheny General Hospital Medical Staff President Richard Ray, M.D.

Published September 1998

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During the course of Allegheny’s financial crisis, it seemed that the only physician input of interest to AHERF administrators was financial give-backs. Physician attempts to impact the situation were fragmented and frequently working at cross purposes.

Hahnemann and MCP physicians, while part of the same medical school faculty and academic departments, nonetheless were situated in separate medical staffs with totally different approaches to the crisis. MCP physicians hired an attorney and sought to purchase the hospital along with an outside investor. Hahnemann’s Medical Staff President Joseph Brezin, M.D., called for support of voluntary pay cuts, while only 21 percent of Allegheny’s 600 salaried physicians in Philadelphia went along, reported the Pittsburgh Tribune-Review.

The organization common to them as faculty members, a local chapter of the Association of American Professors, played no role in the situation. Physicians whose practices had been purchased by Allegheny, or purchased by Graduate Health System and then absorbed by Allegheny, sought separate legal counsel. All the while, physicians at Allegheny General Hospital in western Pennsylvania successfully ousted AHERF President and CEO Sherif Abdelhak and successfully opposed the transfer of funds from western Pennsylvania to help the bleeding hospitals in the east. Physicians from Allegheny’s New Jersey hospital, Rancocas, were hardly heard from and appear to be positioned, for better or worse, to be carved out from the rest of the hospitals.

While it is currently more acute at Allegheny because of its extraordinary size and financial problems, the problem of reduced physician influence exists in all large integrated health systems, whether Allegheny, UPMC, Penn, Jefferson or Temple.

Whereas a hospital system’s decision-making board is centralized and has control over the entire system, there exists no physician organization comparable to that unified board. As a result, physicians within the hospital system remain fragmented and their interests remain localized, a problem exacerbated by divisions among physicians themselves, specialists vs. primary care physicians, academicians vs. community physicians, employed physicians vs. independent contractors, hospital staff vs. hospital staff, region vs. region.

Absence of a unified medical staff within a hospital system is an obvious flaw, but other potential remedies may be more effective in regaining physician control over medical care and hospital staff decisions within such a system.

Whether physicians can reclaim system-wide decision-making authority within large hospital systems depends on the vehicle they choose and the potential of that vehicle to represent physician interests with unity and clout. Among possible options are a system-wide medical staff, an IPA, a union, an academic association and legal representation.

There appears to be skepticism among physicians about whether a unified medical staff can be created that represents all institutions within a hospital system. William M. Swartz, M.D., immediate past president of UPMC Shadyside’s medical staff, admits that there has been no effort to form a unified medical staff within the UPMC system and that such a project would receive little enthusiasm from the administration, inasmuch as such a structure could inhibit administration policy making.

A fundamental obstacle to creating a unified medical staff within a hospital system is the difficult in simply identifying the doctors in the system, observes Joan Roediger, Esq., attorney and consultant with The Health Care Group in Plymouth Meeting. "It’s not like you can hold a meeting of all Allegheny doctors, much less discern commonalities of interest," she says.

Even if doctors within a system could find each other, it is not clear what would be the objective of a unified voice, Roediger notes. One possibility would be to try to reclaim their practices from the system, she says.

Furthermore, a centralized medical staff does not fix the problem of bylaws being loopholed by hospital administration and private schmoozing effectively sabotaging medical staff decisions, notes David Mayernik, M.D., FACP, a practicing oncologist at UPMC Shadyside.

Most hospital medical staffs perform their functions of physician credentialing and medical quality assurance—subject to the approval of the hospital’s board of trustees, notes Lee McCormick, M.D., president of the Pennsylvania Medical Society and past chair of the AMA’s Organized Medical Staff Section. McCormick says that the AMA was successful in promulgating the concept of medical staff self governance, now mandated by the Joint Commission on Accreditation of Hospital Organizations (JCAHO), but he concedes that large hospital systems take decision-making authority out of individual hospitals. McCormick observes that it would be a considerable challenge obtaining JCAHO authority to move physician decision-making into that hospital system superstructure. Other observers note that JCAHO is funded by hospitals.

Another paradigm for physician clout within a large hospital system is the independent practice association (IPA) model. "Just being an organized group of doctors and perhaps being placed on a board here or there really doesn’t have any substantial impact on the direction and governance of the system until and unless you have the ability to control some portion of the flow of dollars through the system," believes Anthony V. Coletta, M.D., chairman and CEO of Millennium Physician Organization, which comprises 278 physicians from Montgomery, Chester and Delaware counties.

An IPA that has a single signature authority has been used to leverage more clout in securing health insurance contracts. If the organization is also independently capitalized through member dues and other income sources, and has an information and medical management infrastructure, Coletta maintains, it can be of considerable value to hospital systems that recognize its ability to take on global risk contracts and control utilization costs while managing high quality care in a disciplined fashion.

Coletta’s IPA has joined with the Chester County Physician Organization under a limited liability management company called Renaissance Medical Alliance, of which Coletta is also the CEO. The combined organization offers a panel of some 420 independent physicians encompassing the medical staffs of six hospitals: Lankenau, Bryn Mawr, Paoli Memorial, Chester County, Brandywine and Southern Chester County.

Renaissance currently has an Aetna-U.S. Healthcare risk contract managed by the Jefferson Health Network that incorporates physicians at Chester County Hospital, which is controlled by the University of Pennsylvania Health System, and physicians at Brandywine Hospital, which is negotiating with Lancaster’s hospital system, says Coletta. "We are providing health care delivery products in the marketplace that don’t currently exist," Coletta notes. "That’s a totally new paradigm to the hospital administrators in Chester County, and they’re open to listening how they can participate."

Academic associations can represent physicians who are faculty members at teaching hospitals and feel disenfranchised from their institution. A group of physicians at the University of Pittsburgh have formed the Faculty Association of the School of Medicine (FASM) to provide a forum for tenured and non-tenured medical faculty to collaborate on academic and financial decisions affecting them.

To date, 278 full time faculty members from Pitt’s medical school have joined the FASM. It’s key concerns, as outlined by President Ralph Siewers, M.D., include: UPMC’s dissolution of departmentally-based Clinical Practice Plans, the absorption by UPMC of the practice plans for the clinical faculty—now call the Unified Practice Plan, the ability of clinical faculty to control the practice plan’s management, and clarification of the clinical full-time faculty members’ professional relationships to the university and to their employer, now UPMC.

To address these concerns, the FASM has called for the formation of an oversight committee of faculty members to review all documents involved in forming the Unified Practice Plan, sponsors open meetings for the faculty to discuss their concerns and provides a structure for collective bargaining, "if this proves to be necessary to achieve shared governance," according to Siewers.

Other academic associations exist, but have limited services to offer academic physicians. The Association of American University Professors (AAUP) has a chapter representing the faculty at Allegheny University of the Health Sciences. Gerald Soslau, Ph.D., chapter president, said that the AAUP could do nothing for physicians during the bankruptcy filing, which he says allows an institution to do basically anything to the tenure process.

The AAUP otherwise serves as an oversight entity for infractions on issues of tenure, according to Soslau. If, for example, tenured faculty are unfairly released for political or non-academic reasons, the AAUP can censor a school and publish the infraction to warn future applicants to that institution, Soslau explains. In a case at MCP before its merger with Hahnemann, he notes, two clinicians were dismissed and brought their case to the AAUP, which secured an equitable settlement for them. AAUP will provide lawyers for precedent-setting cases, otherwise, it will provide limited counsel on a faculty member’s grievance rights, Soslau adds.

The AAUP can also set up a collective bargaining unit at public institutions in which 90 percent of the faculty are members, 30 percent sign cards indicating interest in such a process, and in which the unit represents individuals who are not deemed to have significant managerial input to the school, says Jack Nightingale, associate secretary of the AAUP’s Department of Organizing and Service. The University of Pittsburgh is eligible for a bargaining unit, but has yet to satisfy the 30 percent interest criterion, says Nightingale. Allegheny, as a private institution, is unlikely to be eligible to form a bargaining unit, but a new public sector owner could change that status, adds Nightingale. Temple and Hershey medical schools also meet eligibility criteria for a bargaining unit.

All 700 physicians on MCP’s medical staff are being represented by a Flourtown law firm, Beautyman Associates, P.C., which is trying to put in place a practice plan to help the physicians control their professional service fees during the bankruptcy, says Michael Beautyman, Esq. The plan seeks to have the physicians’ teaching functions paid by the university and to have clinical service billing go to a physician organization operated and governed by the doctors themselves, Beautyman explains. The physician organization would collectively negotiate health insurance contracts. The plan awaits a purchaser of the hospital to determine logistics of the arrangement.

Beautyman says he expects that other academic medical staffs may adopt such a model, but does not know if physicians would support an umbrella version of it to encompass more than one medical staff. Obstacles to a unified entity, he notes, are historically different agendas at different campuses, fear of lost business to other campuses and difficulties in establishing equitable compensation plans for various physician specialties, including pressure on academic physicians to increase clinical income.