Thursday, August 20, 2009

Private Practice vs Employed Medicine

With the 2009 NFL season right around the corner, I've been gearing up for another season of fantasy football with my old medical school chums. I know, very uninteresting information. But two of them happen to be primary care physicians in the Cleveland area. One, David Fantelli MD, works as an internist in private practice just south of me. The other, Jeffrey Harhay MD, is an internist employed by the Cleveland Clinic Foundation on the west side of town (and also the defending fantasy league champ). Given the hoopla generated by Dr. Gawande's recent expose' article in the New Yorker on private vs. employed medical practice in McAllen, Texas, I thought it would be cool to do my own little investigative report from the heart of the Rust Belt.

I sent Dr. Harhay and Dr. Fantelli an individualized set of questions regarding their practice patterns and the challenges facing primary care. Both spent a lot of time contemplating and answering. They took it very seriously, which I appreciate. I encourage those interested to take some time and read through the interviews.

David Fantelli is board certified in internal medicine. He has worked in private practice since 2004 in Summit County. Recently, he was part of a large physician group that acquired a 60% ownership stake of a for-profit private hospital. Here's our exchange:

Did you ever consider joining a large medical institution after graduating residency in an employed capacity?
I never considered joining a large medical institution after residency. I never wanted to be “employed” and told where to be and what to do.

What do you like best about being in private practice?
What I like best is the independence and the ability to have a say in everything. If there is a problem I fix it. I would have to say the lifestyle is in some ways better and in some ways worse that being employed. The perks in terms of lifestyle is that I take unlimited days off and unlimited vacation. As long as I cover my calls, weeks of rounding, and weekends we take as much vacation as we want. The negatives on lifestyle is that I feel private practice (PP) docs work more. I round every third week and am on call every third weekend. We cover 50k patients and five hospitals. It is very busy. Also running a business requires many meetings after hours with partners etc. I feel PP allows me significant autonomy to practice medicine. Nobody tells me where to send my patients or who to refer to like some of the larger hospital systems make their docs do. I truly trust each and every doctor in my practice to cover me when I am out of town or off. This is a real big deal. I have to feel comfortable when I am gone that everything is stable.

Are there measurable financial incentives?
This obviously is an important issue. PP allows me to make 2-3x what employed doctors make without being forced to see TOO many patients. In a full day in the office (8:30-4:30) I rarely will see more that thirty patients. I refuse to do that. I want to be able to make my living while continuing to provide the best care possible. I do not feel that I can provide the best care possible if I am rushed and am unable to spend the appropriate time with my patients. PP allows me to do this. Part of the reason is income we make from our employed doctors and our ancillaries.

You are part of a group that now is a majority stakeholder in a private hospital. In executive meetings, do physicians in your group encourage you guys to self-refer, to keep things "in the family"?
Not at all. All of our patients are sent for testing, referrals, and admissions to the facitilty that best serves their needs and their medical condition. I make every medical decision for testing etc based on “where would I want my dad or mom at”.

How would you respond to criticism that physician owned hospitals represent a conflict of interest for doctors, i.e. the temptation to self-refer can be overwhelming? What can be done to counteract these sorts of accusations?
Anytime a physician has a financial stake in anything there will be concern. Even surgeons can be questioned when they make a decision to do a procedure. Is that procedure really needed or is it because the surgeon makes money doing procedures? The same thing with our hospital and with in-office ancillary services. Anytime I refer a patient to someplace I own I disclose to them my investment. I answer any concerns and it is ultimately up to the patient where they want their testing. We have posters and postcards explaining our investment. This has created very positive dialogue with our patients. I have yet to have a patient have a problem with our investment in Summa Western Reserve Hospital. They understand that we RUN the hospital. We are on the Board of Directors and one of my partners is the CEO. Ultimately their experience in that hospital reflects on me personally. To counteract the criticism we have to run the hospital the right way. Treat patients with respect and continue to make sound evidence-based medical decisions. I urge neighboring hospitals to review average length of stay for my patients at all the hospitals and they will see that there is no difference in how I practice medicine at my hospital or at other hospitals. We invested millions of dollars in this hospital venture so there obviously is expectation of dividends. This will take years to realize. Nobody is going to get rich with this. I think we all see the bottom lines of hospitals in this region. This investment ensures me a say in how my hospital is run. It ensures real accountability for patient care and outcomes. It allowed us to immediately improve patient care by getting highly-skilled subspecialists to practice there that were not involved in the past. Only time will tell. I am extremely proud of this venture and none of us hide this fact.

How do you feel about doctors owning radiology equipment (MRI, CT scans, Stress test labs etc)? Is there a nudge in the back of your mind to "overutilize" for equivocal indications?
We currently own all of the above. Our data over the past few years has not shown an increase in the number of tests ordered. Stress tests are routinely reviewed by the cardiologists for appropriateness of testing. We have checks and balances in place that monitor our referrals for testing. Sure, more of the testing goes to our facilities. We use state of the art equipment that is similar to what is at the hospitals. We had a quality issue once with one of our ancillaries and we stopped referring to it for months until we could get another doctor to read the tests better. Again I would send any family member to be tested at all of my ancillaries because I truly feel we do as good a job or better than other facilities. Remember when you order a test you have to deal with the result. If you send patients for equivocal indications you run the risk of running even more tests to CYA. You still need to assess pretest probabilities etc. I don’t order a stress test if I am not going to believe the result (positive or negative).

What drawbacks do you perceive about the Cleveland Clinic system (or other typical large salaried groups) in terms of how physicians are organized, paid, rewarded?
There really is no drawback for me personally. Subspecialists like yourself I am concerned about. Hospital owned physician groups in my opinion may be pressured to refer within the “family” for subspecialists and testing. I am sure there is much more pressure to do this that in private practice. In fact those doctors in hospital owned groups may not even have the ability to send their patients somewhere else for testing or referrals.

Do you feel this momentum gathering for healthcare reform puts future entrepreneurial endeavors like the one you are engaged in at risk?
Absolutely it does. There are decisions that the government could make that could put me out of business. If that happens I plan on moving to the Caribbean and working for cash. I refuse to be forced to see 40 patients a day to make half of what I make now. I would rather sell it all and move to some island or rural town and live a simpler life.

How likely is it that physicians will be able to pursue these sorts of free market opportunities in the future given the apparent direction our federal government is going?
This question is very hard to answer because I truly do not know what will be passed. Wait and see approach. I am pretty sure though that free market opportunities will be less.

Jeffrey Harhay is board certified in internal medicine. He has been employed by the Cleveland Clinic since finishing residency 5 years ago. He states that, despite working for the evil empire, he does not have to dress up in special stormtrooper gear every day for work. (Just teasing).

What factored in your decision to choose to work for a large academic institution like the Cleveland Clinic rather than going into private practice?
3 main reasons

1. Availability of an electronic medical record. I was fortunate enough to see the benefits of a sophisticated electronic medical record during part of my residency at the VA. Say what you want about the VA, but you cannot beat their medical record system. Everything was integrated, from viewing CXR in the resident team rooms to dispensing prescription directly to the pharmacy from the ER. It really was seamless. It definitely beat tracking down paper charts that I had grown used to at University Hospitals. So having a user-friendly EMR was important.

2. Lack of private practice opportunities in Cleveland. If you want to practice primary care in greater Cleveland, you pretty much have to align yourself with the one of the big three (CCF, UH or Metro). Practicing in Cleveland was important to me, as both my wife’s and my family are rooted here.

3. Protected time off. This is tough to achieve in many private practice settings. As a salaried physician at the CCF, I am allotted 4 weeks of vacation and 2 weeks of CME (which may include 2 reimbursed trips within the U.S. to attend CME conferences of your choice). This is addition to all national holidays off. I also have the support of a “nurse on call” service which fields all patient calls and triages them appropriately according to physician approved protocols. As a result, only about 10% of the calls need direct physician input, which is directed to the on call physician. What this means practically, is that when I leave the office at 5 p.m., I leave the office.

Are you satisfied with your present compensation and overall work situation, i.e hours, expectations, time off, CME etc.
In general, I am not pleased with the compensation of primary care as a whole. Currently, reimbursement is procedure based, not cognitive based. Unless that changes, primary care providers will continue to be underpaid.

Specific to my present compensation, I am satisfied. I definitely took a lower initial salary when I started, but I believe I was up to par with my colleagues after 2-3 years. When you take into account malpractice coverage, health benefits, life insurance and retirement contributions (approximately an additional 6% contribution into 403B & Cash Savings Plan), it gets pretty close to private practice compensation. I am expected to see patients 38 hours a week with a half-day Saturday once monthly. In our current group, there are no inpatient responsibilities as our patients are cared for by hospitalists. Essentially I see patients from 8 to 5 and one Saturday a month. This setup is very family friendly. To me, this was more important that an incremental increase in earnings that I could make elsewhere.

Did you explore higher paying jobs in the private sector?
I did. I explored a rural based practice that would have come with a $20,000 signing bonus plus a higher starting salary for 2 years. But essentially I would have been acting as a solo practitioner, being on call 7 days a week. If I wanted coverage for a weekend, I would have to coordinate that with another physician in the area.

Another academic based practice guaranteed 2 years salary, after which I would earn what I billed. Many of the physician in the setting were frustrated with the variable expenses they were responsible for on a month to month basis. They would have to go line-by-line on a monthly overhead statement, which they had difficulty interpreting. In this model, if you took vacation, you did not earn while out of the office. To me, this seemed like an inherent disadvantage to take time off. I knew that I could not truly enjoy taking a week off knowing that I was “losing” $500-$600 per day. I doubt I would take more than a week off in this type of practice model.

Do you feel there is an expectation to practice medicine a "certain way", working as an employee for CCH?
I don’t feel I have any more expectations placed upon me than a private practitioner. Namely, putting the patient’s concerns and needs above all other priorities. If this means consulting a specialist outside the Clinic in order to get the patient seen in a timely manner, so be it. Obviously, we try to refer within the Clinic as much as possible.

How much of a role do "cost effectiveness" issues factor into your clinical decision making and have you ever been censured for ordering "unecessary tests"?
Almost never. On a rare occasion (probably 2-3 times in the past 5 years) I have received a letter from a senior reviewing physician on the cost of a visit / workup of a Cleveland Clinic employee. It is usually accompanied by an evidence-based article advocating a more cost effective approach to managing a particular issue. For instance, I received such a letter after ordering extensive serologies on a young patient recovering from viral myocarditis. In retrospect, the labs did not effect the treatment of the already convalescing patient, and probably were not necessary.

Is team-oriented clinical care emphasized at CCH, ala the Mayo clinic, or is that just a bunch of hype?
It is really true, and probably one of the most unique and beneficial aspects of receiving care at the Clinic. As an internist, I am expected to be a jack of all trades, but master of none. I rely heavily on my specialist colleagues for guidance in difficult patient issues. Let me give just a few examples in the past several weeks.

I have often called down to the radiologist on the first floor to review an x-ray of a patient I am seeing in the office. Essentially it allows me to get an instantaneous radiology read.

I have asked the pulmonologist in the office adjacent to me to review some borderline mediastinal adenopathy on a CT scan in a patient he has never seen. He deems it to be insignificant and thus saves the patient the cost and inconvenience of a formal consult. The pulmonologist is no worse off, as he is salaried as well.

Many occasions I’ll run downstairs to review an ECG with the cardiologist and bounce a few questions off of him on how to manage a particular patient.

More then once I’ve grabbed the dermatologist to take a look at rash I’m not sure of.

And I have many more examples. The one common theme is that never have any of the consultants / radiologists seemed put-off or perturbed by my request. And by sharing the same EMR, there is seamless communication and flow. I have never had to look for a lost consultant note. I am able to avoid ordering redundant labs, which saves money. No need to order a lipid panel and ALT, if the cardiologist did just 2 months ago. I truly believe all the Clinic docs buy into the team approach.

How do you do specialist referrals? Is it simply of matter of plugging patient name into computer and an appointment is spit out? Or do you always call the consultant? Do you use docs you like or are there recommended guys "in the system" you generally use?
In our FHC (family health center) building, we have a full array of specialists with whom we are familiar and often refer to. Specifically in the building I work, there are dermatologists, rheumatologists, neurologists, urologists, nephrologists, heme/onc, general surgery, plastic surgery, orthopedics, radiologist, ob/gyn, gastroenterologist, cardiologists and ENTs. I am familiar with every single one of them and could call them to see a patient urgently without any resistance. For routine consults, a computer order is placed and the secretaries schedule the appointment for the patient. There is no need to speak to the consultant for routine consults, as we all share the same chart. No films for the patient to misplace, as it is all electronic.

What do you think are the benefits to being in a salaried position for a large medical group? Talk about anything. Patient care. Cost. Personal satisfaction. Quality assurance.
Professionally, I strongly believe the EMR gives me a tool that allows me to improve the quality of care that I provide. After 8 years of college and 3 years of residency, I think most internists start off with a similar skill set. The EMR allows me to continuously self assess the care that I provide. And it allows me to do this objectively. Let me give you an example.

Every quarter, each physician gets a report on his/her certain disease outcome measures. One can see how they compare to his/her colleagues in the building as well as the CCF average. So I am able to see that my diabetic HbgA1c (a reflection of glycemic control in the previous 3 months) average is better than the most in the building, but perhaps my blood pressure control in those patients is sub par. I am then able to take action to improve these numbers. I can pull up a list of all my diabetic patients with BP of > 140/90, and have my medical assistant call five patients a week to schedule a follow up or a nurse visit for a BP check. If I see that my pneumovax rate is less than 90%, I can create a list of these patients and have letters sent to them.

Of note, these measures are not used against physicians. If there is a physician with some outlying measurements, a non-confrontational, constructive approach is taken to see how the support staff and physician can work together to improve the quality scores. I know it’s hard to believe that physicians are not threatened by being “graded”, but in my experience, it is just not the case. Most physician welcome the insight as to what they can do to improve their practice.

That is why I think it is so vital that governmental health care efforts continue to provide incentives for the continued expansion of the electronic medical record.

Personally, working at the Cleveland Clinic affords me the greatest opportunity to raise a family. That aspect is very important to me. Most days I work 9 hours a day, and I home by 5:30. I am not bogged down with the management aspects of running a practice. I do not have to worry about billing, scheduling, the hiring and firing of ancillary staff, overhead cost, etc, etc. My job is to focus on being a clinician. Nothing more, nothing less. Yes, I sure I make less money than many private practitioners. I assure you that I definitely have less aggravation and stress than most private practitioners. What price can you put on that?

Do you ever feel your autonomy is compromised to some degree working for CCH?
Sure, in certain circumstances. For one, all Cleveland Clinic physicians go through a yearly professional review. This entails reviewing your productivity (as reflected by RVUs), patient satisfaction scores and quality data. I can say that I have never had a problem with any of these measures in the five years working for the CCF. These reviews also allows me the opportunity to give feedback the medical director and department head. But ultimately, I have a boss, which inherently limits my autonomy.

More trivial things include the requirement of a 30 day notice to take a vacation day. This is to minimize patient inconvenience, but does not allow for a spur of the moment afternoon round of golf. It is a bit frustrating when you plan a day off a month in advance, then it happens to rain the whole day.

Is it your feeling that private practice docs tend to be more financially incentivized than employed docs?
Certainly. In some cases this is beneficial and in others it is detrimental.

As a salaried physician, when my schedule is full and I have already added on a couple of patients, I am less inclined to add on more patients that a private practitioner. This adversely affects patient access. Conversely, I think I am going to be less prone to order a nuclear stress test on a patient with atypical chest pain than the private doc whose practice owns their own scanner. I do not see how any physician can act entirely unbiased if they have a financial stake in the tests that they are ordering.


HMS said...

Great interview, Buckeye.

(forwarding it to colleagues.)

rlbates said...

Yes, great interview.

Anonymous said...

Gripping Interviews Buckeye, but you gotta Riddle me this...
Whats the attraction of Cleveland??? Rust Belt Siberian winters, hot sticky summers, mediocre baseball and football teams(are the Browns still in the NFL?)OK you've got the Rock N Roll Hall of Fame, and LeBron James for another year.
Love the Cleveland Clinic docs admission that he's "less inclined to add on more patients than a private practitoner" can't wait until all docs work that way...


Anonymous said...

Dear Dr. Parks,

Interesting from the internal medicine point of view. However, I would venture to say that from a surgical aspect, things are quite different. I had a small one-physician general surgery practice a few years ago. It was in a rural area with a population of about 50,000 to draw from and that I was the only general surgeon. However, we did have medical centers within an hour away. Due to declining reimbursements and an increasing number of uninsured patients, my net income was decreasing. I had to let go my office nurse because I could not afford to employ her and ran my clinic with just an office administrator and myself. Malpractice insurance rates at the time were also sky-high. There were family physicians who made more income than I did and they were not on call 365 days a year, 24/7. I could not keep this up and finally told the hospital that I would have to leave unless they could financially help me out. The hospital needed a general surgeon to maintain the ER and therefore they hired me. They also provided call coverage for me every other weekend. I have a reasonable salary and have enough time for my family. The hospital lets me run my practice as I see fit. I believe that for the rural general surgeon, this may be the new reality.

an old-fashioned country surgeon

Dawn L said...

Interesting. I am very concerned about ethical issues in hospitals hiring their own physicians. In our area, the hospital system has about 200 employed primary care and specialist physicians. But patients don't know that because they are presented to the public as if they are private practices. Patients can be herded through the system and not even know they are IN the system.

In 3 months a hospital system surgeon, brought in from out-of-state, unknown to patients and physicians, surpassed the highest volume and best known breast cancer surgeons in town -- not because she was better, but because patients were steered to her. She was set up in practice in the same building as a successful independent surgeon -- who actually does nearly all her procedures at the hospital system, but was opening an office where she could do stereotactic biopsies. The hospital employment approach betrays physicians who have been loyal to it. They bring in physicians not for community need, but for revenue, market share and downstream referrals. They are set up in 90 practice locations, which doesn't seem very cost effective. But they do own healthcare in Orlando. Even their biggest competitor can't compete.

When I tested the hospital physician referral line, that used to refer to all physicians who had staff privileges, I was given 5 surgeons, ALL of whom were employed by the system, although that was not said, and all of whom were much less experienced. In the same building or next door, or in between were some of the best private practice breast surgeons in this area. The referral was based on corporate best interest, NOT the best interest of the patient!

I am deeply disturbed about this trend and can't believe they can get away with such behavior. It makes it increasingly difficult for private practices to stay financially viable and no independent physician would ever be able to set up a new practice here and compete against that system.

Aren't their laws about this? I wish I could find ways to stop it and at least let patients know!

Dawn L said...

To add on to previous comment, if you want to see what this hiring has done to private practice surgeons in Orlando, just look at the graphs at You don't even need to read the text!

Anonymous said...

Interesting viewpoints. It would seem that all the "big box" hospitals are up to the same no good. Our hospital has been hiring cardiologists and buying up medical practices. They are also trying to divide our group and constantly offer contracts to our most productive partners. I expect that the unfortunate outcome with the passage of health care reform and tremendous medicare cuts only gives us private practice cardiologists a few more years before we go out of business. We are also not going to be able to invest in any equipment or hospitals going forward from august 2010. All medicine will be rationed and administered by big corporate entities like the Cleveland Clinic and others. This seems to be what the population wants?