2006 - Modern Healthcare

Ore. physician-owned hospital escapes
CMS scalpel—for now
Page 4
Physician readers sound off on pros,
cons of doc ownership
Page 8
ACPE’s Barry Silbaugh comments on
growing power of doc-execs Page 9
Editorial Features
News . . . . . . . . . . . . . . . . . . . 4
Briefly . . . . . . . . . . . . . . . . . . 6
Opinion . . . . . . . . . . . . . . . . . 8
Commentary . . . . . . . . . . . . . 9
By the Numbers . . . . . . . . . . 14
Business news and information for physician-executives, leaders and entrepreneurs
Vol. 10/No. 5 • May 2006
News Makers . . . . . . . . . . . 15
COV E R STO RY
BY JAY GREENE
William McGuire, M.D., sees the healthcare system as overly complex—gaps exist
within socio-economic groups; costs are too
high; and quality improvements are needed.
As chairman and chief executive officer of
the nation’s largest insurer, UnitedHealth
Group, Minnetonka, Minn., McGuire wants
to achieve economies of scale and provide
a variety of health products.
As a result, UnitedHealth Group has
grown like crazy. Its earnings on operations
have risen 345% over the past decade to
$5.4 billion in 2005 on $45.4 billion in
revenue for an 11.8% margin compared
with $742 million on $11.8 billion in revenue in 1996.
With the 2005 acquisition of PacifiCare
Health Systems, UnitedHealth’s membership grew to 65 million last year from 61
million in 2004. Over the past four years,
UnitedHealth has tripled its membership.
“Based on our strong position and
Continued on p. 2
1
THE
50
2
MOST
POWERFUL
PHYSICIAN EXECUTIVES
IN HEALTHCARE—2006
William McGuire, M.D.
Chairman and CEO
UnitedHealth Group
Minnetonka, Minn.
Donald Berwick, M.D.
CEO, Institute for Healthcare
Improvement
Cambridge, Mass.
COV E R STO RY
Continued from p. 1
business momentum entering 2006, we now
anticipate a further increase in our earnings
per share growth to a range of 21% to 23%
over our 2005 results,” McGuire said in a
Jan. 19 statement.
When the blunt-talking yet intensely private
McGuire took over in 1991, UnitedHealth was a
regional HMO. Over the past 15 years,
McGuire, 58, has acquired more than 30 firms,
turning UnitedHealth into one of the nation’s
most diversified health companies.
3
4
5
6
7
William Winkenwerder, M.D.
Assistant secretary of defense
for health affairs
Defense Department, Washington
David Brailer, M.D.
National coordinator for health
information technology
HHS, Washington
Mark McClellan, M.D.
Administrator
CMS
Baltimore
William Frist, M.D.
Senate majority leader
(R-Tenn.), U.S. Senate
Washington
Thomas Royer, M.D.
President and CEO
Christus Health
Irving, Texas
Modern Physician | May 2006 • 2
While McGuire ranked No. 6 in last year’s
poll, readers of Modern Physician this year
voted him to the No. 1 spot on the magazine’s
second annual ranking of the 50 Most Powerful
Physician Executives. Through a spokesman,
McGuire, who grants few interviews, declined
to comment for this story. Instead,
UnitedHealth offered Reed Tuckson, M.D., senior vice president for consumer health and
medical-care advancement, for an interview, but
Modern Physician declined.
William Jessee, M.D., 59-year-old president
8
9
Julie Gerberding, M.D.
Director, Centers for Disease
Control and Prevention
Atlanta
James Mongan, M.D.
President and CEO
Partners HealthCare System
Boston
10
11
12
Patrick Quinlan, M.D.
CEO
Ochsner Clinic Foundation
New Orleans
Robert Pearl, M.D.
Executive director and CEO
Permanente Medical Group
Oakland, Calif.
Richard Carmona, M.D.
U.S. surgeon general
U.S. Public Health Service
Washington
and CEO of the Medical Group Management
Association, Englewood, Colo., who is ranked
No. 19, says McGuire has a twofold reputation
in the medical community.
“He is CEO of the biggest player on the block.
Now they have done their merger with
PacifiCare, some would say the biggest gorilla
in town,” Jessee says. “There also is a lot of
envy over his salary. An interesting question is
does power relate to how much your compensation is?”
In 2006, McGuire cashed in $136.7 million in
stock options “to support significant new and
existing philanthropic commitments,” the company explained. This follows the sale of $114 million of his shares in 2004. In April, UnitedHealth
said an independent committee has been
appointed to review the insurer’s stock-optiongranting practices, and independent counsel has
been engaged to assist the committee. McGuire
subsequently recommended that UnitedHealth
stop awarding new stock options to its senior
executives, including himself. The insurer’s
board will consider the recommendation at its
meeting this month.
Last year, McGuire’s most controversial
accomplishment included rolling out a physician-performance rating system in 12 markets,
including Chicago and St. Louis. The United
Performance Plan is designed to help consumers choose high-quality and low-cost doctors. Based on their scores, as determined by
UnitedHealth, doctors received stars next to
their names on the company’s Web site.
After objections were raised by a number of
hospital systems, physician groups and professional organizations, including the MGMA and
the American Medical Association,
UnitedHealth altered the program.
In an April 4, 2005 article in Modern
Healthcare, Jessee said this of UnitedHealth’s
Continued on p. 3
COV E R STO RY
Continued from p. 2
performance program: “It’s inconceivable to me just how incredibly
poorly thought out and executed
the program is.”
Jessee now says UnitedHealth
has responded to its critics by
modifying the ranking system to
put quality measures ahead of
cost measures. “They give you a
star for hitting the quality measures, and if you hit the cost measures, you get another star,” he
says. “It has the potential for
becoming useful information to
consumers.”
Of the 50 physician-executives
on the 2006 list, 15 are hospital
or system CEOs, 10 are in government, five are from medical
groups, three work for HMOs and
17 represent consumer, business, medical school or professional organizations.
‘Optimistic’ agenda
“I am very gratified of the
expression of confidence in what
we are doing here,” says Donald
Berwick, M.D., CEO of the
Institute for Healthcare
Improvement, Cambridge, Mass.,
who is ranked No. 2.
Berwick, who co-founded the IHI
in 1991, says his recognition as a
most powerful physician-executive
is because the IHI’s mission has
struck a nerve in the medical and
nursing profession.
“Clinical people are feeling battered, and there is an air of pessimism,” Berwick says. “The IHI
Modern Physician | May 2006 • 3
has an optimistic and ambitious
agenda. We have hooked into the
intrinsic motivation for good of
doctors and nurses. To me, it is
like striking oil. There is a deep
need to do a good job and take
care of patients.”
“Information is crucial for the
healthcare system to function
effectively. Since we are producing information on healthcare,
our message is what becomes
power ful,” says Carolyn Clancy,
M.D., director of the Agency for
Healthcare Research and
Quality, Rockville, Md., who
ranked No. 16.
“I believe I get on these lists
because of what Denver Health
has done for people in the community,” says Patricia Gabow,
M.D., CEO and medical director of
Denver Health, who ranked No. 27.
“We are a model for the nation in
how to deliver very high quality
healthcare in a very efficient way.”
More than 20 physicians on the
list also made Modern
Healthcare’s 2005 100 Most
Powerful People in Healthcare list.
They include Jessee, Berwick and
William Winkenwerder, 51, assistant secretary of defense for
health affairs at the Defense
Department, ranked No. 3.
In 2006, Institutional Investor
named McGuire to its list of the
best CEOs in America.
Interestingly, McGuire, who has
made several best CEO lists,
ranked only 90th on Modern
Continued on p. 10
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NEWS
Modern Physician | May 2006 • 4
Physicians’ faces deadline
Register NOW
Ore. hospital must make changes to satisfy the CMS
www.npsf.org/congress/
registration.html
May 24 or risk being terminated by
HHS, says Michael Marchand, direcPhysicians’ Hospital, Portland,
Ore., has until May 24 to implement tor of public affairs for the CMS’
regional office in Seattle.
changes required by the CMS, or
Dianne Danowski-Smith, a spokesrisk losing its Medicare certification
status. The hospital passed the first woman for 39-bed Physicians’
Hospital, says Physicians’ submitted
hurdle in the effort when the CMS
a plan of corrective action to the
on March 17 removed it from the
CMS on March 22 for the
“immediate jeopardy”
conditions that need to be
track toward termination.
met by May 24.
In late Februar y, CMS
“When you’re on an
officials had told
immediate jeopardy track
Physicians’ it would
for 23-day termination, the
need to meet cer tain
measures were in regard
guidelines by March 19
to that immediate jeopto avoid being terminatardy,” Marchand says.
ed from the Medicare
On March 16, represenprogram. The physiciantatives from the CMS and
owned hospital submitthe Oregon Department
ted a list of corrective
Marchand says
measures and began to changes must be of Human Services, which
implement changes,
made by May 24. licensed the facility as a
general, acute-care hospiincluding hiring a registal, paid an unscheduled visit to
tered nurse as a full-time comPhysicians’, Marchand says. After
pliance officer and revising
the visit, the CMS lifted the immestaff bylaws.
diate jeopardy designation.
It also ceased inpatient surgerThe Oregon Department of Human
ies, although outpatient services
Services received two complaints
were not affected. At the time,
about Physicians’ in 2005, and one
Bill Houston, chief executive offiincident caught the attention of the
cer at Physicians’, said about
Senate Finance Committee’s chair21% of the hospital’s business
man, Chuck Grassley (R-Iowa), and
came from Medicare.
The hospital had until March 24 to its ranking minority member, Max
submit a plan of corrective action to Baucus (D-Mont.), who called for a
federal investigation into the
comply with five other conditions
unrelated to the immediate jeopardy oversight of physician-owned specialty hospitals. ■
and implement those changes by
May 10-12
BY JESSICA ZIGMOND
2006
San Francisco Marriott
8th Annual NPSF Patient Safety Congress
The National Patient Safety Foundation (NPSF) recognizes that the field of healthcare must translate theoretical models of culture change and accountability
into the everyday practice of medicine and decision
making by healthcare leaders and clinicians. Leaders
and organizations who have led change will present
successful strategies that promote patient safety across
the continuum of the healthcare system.
2006 CONGRESS PLENARIES- May 11-12
Leadership in Action – Creating A Remarkable Experience
Ann Rhoades, President, People Ink, Former Executive
Vice President of People for JetBlue Airways, Vice
President of the People Department, Southwest Airlines
Disclosure and Apology – Stories from Doctors
and Patients
Lucian L. Leape, MD, Adjunct Professor of Health Policy,
Harvard School of Public Health, Distinguished
Advisor, NPSF
Jo Shapiro, MD, Associate Director of Graduate
Medical Education, Brigham and Women’s Hospital
and Massachusetts General Hospital; Chief, Division of
Otolaryngology, Brigham and Women’s Hospital;
Associate Professor of Otology and Laryngology,
Harvard Medical School
Georges Peter, MD (patient), Professor of Pediatrics,
Emeritus, Brown Medical School
Third Annual Distinguished Advisors Town Hall Meeting
Featuring: Carolyn Clancy, MD; David Lawrence, MD;
Lucian Leape, MD; James Conway, MAM
Moderated by: Margaret O’Kane, MHA, President of
NCQA and
Rosemary Gibson, MSc, author of Wall of Silence
Our Time, Our Watch, Our Work; Nurse Leaders
in Action
Timothy Porter O’Grady, PhD, RN, Senior Partner, Tim
Porter-O’Grady Associates, Inc.
Kathleen M. Bartholomew, RN, RC, MN, Clinical Nurse
Manager, Orthopedics, Swedish Medical Center
Caryl Z. Lee, RN, MSN, Program Manager, VA National
Center for Patient Safety
Nellie Robinson, RN, MS, Vice President, Patient
Service, Children’s National Medical Center
Register at: www.npsf.org/congress/registration.html
413-663-8900 • email: [email protected]
www.npsf.org
NPSF LEADERSHIP DAY- May 10
Patient Safety Doesn’t Just Happen…
It Requires a Leadership Team
Pre-Congress Program -May 10, 2006
Join leaders from throughout the nation for a two
track Leadership Day on Patient Safety, that will
kick off the NPSF Congress on May 10, 2006.
Introductions & Overview of the Day
David M. Lawrence, MD- Retired Chairman and CEO,
Kaiser Foundation Health Plan and Hospitals
What Patients Expect From Their Healthcare System
James B. Conway, MAM, CHE - Senior Fellow, IHI, Senior
Consultant, Dana-Farber Cancer Institute
Virginia Mason Case Presentation
Richard Bohmer, MD, Associate Professor Harvard
Business School
Gary S. Kaplan, MD, FACMPE - Chairman and CEO
Virginia Mason Medical Center
Sarah Patterson, MHA, FACMPE - Executive Vice
President and Hospital Administrator, Virginia Mason
Medical Center
Leverage Points for Leaders
A panel of experts from all levels of healthcare management will present levers they have used and
describe the successes and the challenges they have
experienced.
Engaging Patients
Patricia Sodomka, FACHE - Senior Vice President,
Patient and Family Centered Care MCG Health, Inc.
Engaging Physicians
Jack Silversin, DMD, DrPH - President, Amicus, Inc.
Integrated Accountability
William F. Jessee, MD, FACMPE - Vice Chair, Board of
Directors Exempla Healthcare President and CEO
Medical Group Management Association
Randall L. Linton, MD - President and CEO, Luther
Midelfort, Mayo Health System
For Executive Leadership and Middle Managers
Exercise and joint summary of issues
Creating A CAREing Culture
Ann Rhoades, President, People Ink, Former Executive
Vice President of People for JetBlue Airways, Vice
President of the People Department, Southwest Airlines
NEWS
Modern Physician | May 2006 • 5
‘A measured approach’
CMS’ Straube uses data to gauge true quality
He also used his presentation to
announce a new program where
When it comes to improving
doctors will be able to reuse the
healthcare quality, the acting chief
data they collect while participating
medical director for the CMS,
in the CMS’ voluntary qualityBarry Straube, M.D., favors taking
reporting program for use in the
a measured approach.
American Board of Internal
To be more precise, he favors
Medicine’s maintenance of certifideveloping more per formance
cation program.
measures created for
“We believe that we
specific medical spehave to assist providers
cialties, promoting the
of all types to provide
use of health informagood care—and part of
tion technology to colthat is health IT adoplect and analyze data
tion,” Straube says.
pertaining to those
“We’re not going to be
measures and aligning
able to buy computers
measures and goals so
and software for peophysicians participating
ple, but we can provide
in several different
free advice.”
quality-improvement
Straube: Quality
The form this free
programs don’t have to
improvement will
advice will take includes
waste time collecting
be main focus.
getting the qualityseveral slightly different
data sets to satisfy the different improvement organizations contracting with the CMS to enroll
programs’ requirements.
“There’s a need to develop more about 5% of the physician practices in their regions in a program
measures faster,” Straube said in
where an IT-needs assessment is
an interview before his presentadone for individual offices and
tion at the American Board of
Medical Specialties’ assembly held office redesigns are recommended
to better incorporate IT into a pracrecently in Rosemont, Ill. “A lot of
tice’s workflow. The American
specialties don’t have specialtyHealth Quality Association, which
unique measures, and some are
represents healthcare quality
way ahead of others.”
improvement organizations, said
Straube says that thoracic sur3,000 physician practices have
geons “are way out ahead of
signed up for this program in the
folks” in the use of performance
past eight months. ■
measures.
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ANCHORAGE (ALASKA) NATIVE PRIMARY CARE CENTER
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BANNER ESTRELLA MEDICAL CENTER, PHOENIX
B R I E F LY
Second mistrial in kickback case
The second trial against Alvarado
Hospital Medical Center, San Diego,
ended in a mistrial for the same reason as the first: The jury could not
reach a unanimous verdict. Tenet
Healthcare Corp., Dallas, which
owns Alvarado, said U.S. District
Judge M. James Lorenz in San
Diego declared a mistrial. Alvarado
former Chief Executive Officer Barry
Weinbaum and a Tenet subsidiary
stand accused of conspiring to pay
kickbacks to physicians for admitting
large numbers of patients to the
hospital. “This case has amply
demonstrated that the law surrounding physician-relocation agreements
is complicated and subject to differing interpretations,” Tenet General
Counsel Peter Urbanowicz said in a
news release. At a status hearing in
the case in mid-April, the U.S. attorney sought and received more time
to decide whether to pursue a third
trial. The next status hearing is
scheduled for May 22. The first case
ended in a mistrial in early 2005.
Recruiting scheme criticized
San Francisco’s Board of Supervisors
unanimously approved a resolution
urging Brown & Toland Medical Group
to stop an alleged attempt to sign
Chinatown doctors to exclusive contracts, which critics say could jeopardize healthcare for thousands. The resolution came after San Francisco City
Attorney Dennis Herrera sued the
1,500-member physician group for
unfair business practices related to
its recruitment effort. The controversy
Modern Physician | May 2006 • 6
involves about 165 doctors who
belong to the Chinese Community
Health Care Association, the
medical group affiliated with 54-bed
Chinese Hospital of San Francisco.
Brown & Toland, the city’s dominant
doctor group, has been trying to
recruit the physicians, offering contracts that critics say would require
the doctors to resign from the
Chinatown association. Brown &
Toland denied the allegations.
Spend money to make money
The most profitable multispecialty
medical groups spent more on support services and staffing in 2004
than their less-successful counterparts, according to a study by the
Medical Group Management
Association. Better-performing
groups reported 22% higher operating costs per full-time-equivalent
physician than other groups. And
their medical revenue after operating
costs was 33% higher per physician—about $362,600 compared
with about $273,000. “It seems the
more successful groups are strategically investing in their practices to
help support the practice in the long
term,” Daniel Stech, director of
MGMA survey operations, said in a
news release.
Fee honesty promotes patient trust
Disclosing how physicians are compensated may increase patient loyalty without harming patients’ trust
in their doctors, according to a
study in the Archives of Internal
Continued on p. 7
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B R I E F LY
Continued from p. 6
Medicine. Researchers examined
how disclosure affected 8,000
patients treated by two large group
practices in Boston and Los
Angeles when physicians received
both salary and performance
incentives. Half of the patients
were mailed a letter explaining how
the physicians were compensated,
while the other half did not receive
a letter. Among patients who
remembered receiving the letter
three months later, less than 5%
of patients in both cities said it
decreased their trust.
Lower rate of docs offer free care
The proportion of physicians providing charity care dropped 8 percentage points in the last decade, falling
to about 68% in 2004-05, according
to a national survey by the
Washington-based Center for
Studying Health System Change. The
survey, part of a nationally representative tracking survey that included
about 6,600 physicians, says charity
care has declined for physicians at
all levels of income, major specialty
groups and geographic regions of the
country (See chart, p. 14). Doctors
at the highest levels of income are
more likely to provide charity care,
with about 76% of those with
incomes greater than $250,000
reporting some free or reduced-cost
care, compared with 66% of those
with incomes less than $120,000.
The decline was blamed on several
factors, including a surge in demand
for physician services in recent years
Modern Physician | May 2006 • 7
and declining reimbursements for
many doctors.
Medical school salaries flat …
Salaries at academic medical practices stagnated in 2004, with annual
compensation stuck at about
$195,000 for specialty physicians
and increasing just two-tenths of a
percent to about $135,200 for primary-care physicians, according to
a survey by the Medical Group
Management Association. The data
demonstrate continued belt-tightening by academic practices facing
various economic stresses. By comparison, compensation rose almost
8% for specialists and 5.3% for primary-care doctors in 2003.
… don’t say that in Florida
The University of Central Florida,
Orlando, and Florida International
University, Miami, won approval
from Florida’s Board of Governors
to establish two new medical
schools. The 15-1 vote clears the
way for the pair to seek public
financing from Florida’s Legislature.
FIU will seek $18 million in public
funding during its first two planning
years and $20 million annually
thereafter in public operating funds,
an FIU spokeswoman says. The
Miami medical school would admit
36 students into its first class and
expand over eight years to admit
120 each year. UCF will seek
$4 million in public planning funds
and roughly $20 million annually in
state operating funds, a UCF
spokesman says.
you are
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Socialize with the who’s who of healthcare as we recognize
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Tuesday, June 6, 2006
6:30 pm – 9:00 pm • Cocktails/Dinner
Ronald Reagan Building • Washington, D.C.
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To congratulate this year’s honoree by placing an ad in our special CEO IT Achievement
Awards supplement, please contact Ilana Klein at [email protected] or 312.649.5311.
Issue: June 5, 2006 • Ad Closing: May 18, 2006
OPINION
Finding the power
Most powerful doc-exec list topped by McGuire
If money is power, then Modern
2005 issue of our sister publication,
Physician readers sure got it right
Modern Healthcare, and simultanewhen they voted William McGuire,
ously on Modern Physician’s Web
M.D., chairman and chief executive site, modernphysician.com. From
officer of insurance powerhouse
Dec. 12, 2005, to Jan. 13, readers
UnitedHealth Group, as the indussubmitted nominations for the desigtry’s most powerful physician-execu- nation on the site. We then took the
tive. McGuire guided
100 who received the
the health insurer to a
most nominations and
$3.3 billion profit last
placed them on a final balyear on total revenue
lot. From Jan. 23 to
of $45.4 billion. That
Feb. 17, readers visited
year, McGuire helped
the site a second time to
himself to an eye-popcast their vote for the canping $136.7 million in
didate who they believed
stock options for his
should make the final list.
effort. McGuire’s
The 50 who received the
DAVID BURDA
power and influence
most votes made the final
Editor
will be tested this year
list, with the ranking deteras he and UnitedHealth
mined by the number of
face an independent committee’s
votes received. Modern Physician
review of the insurer’s stock-option
reserved the right to resolve voting
granting practices, a topic also of
irregularities. The magazine received
high interest to the Securities and
5,101 votes on the final ballot, up
Exchange Commission.
from about 3,200 last year.
McGuire topped this year’s list of
The list of the Top 50 Most
the 50 Most Powerful Physician
Powerful Physician Executives in
Executives in Healthcare, Modern
Healthcare for 2006 appears in this
issue as well as the April 24 issue
Physician’s second-annual ranking
of Modern Healthcare.
of the high and mighty of the medical profession. Ron Anderson,
If you have any comments or quesM.D., president and CEO of
tions about the results or polling proParkland Health & Hospital System cedures, please contact David
in Dallas, topped last year’s inaugu- Burda, editor, Modern Physician,
ral list.
360 N. Michigan Ave., Chicago, Ill.
To compile this year’s ranking,
60601; by phone at 312-649-5439
or by e-mail at [email protected].
Modern Physician announced the
Thank you.
recognition program in the Dec. 5,
Modern Physician | May 2006 • 8
LETTERS
Editor’s Note: The following letters
appeared in Modern Healthcare, our
sister publication, but they address
topics routinely covered in Modern
Physician. We believe the opinions
shared below will be of interest to
Modern Physician readers.
Hospitals do it, too
Hospitals also self-refer. One aspect
of the specialty-hospital debate that
has not been considered is the fact
that hospitals which hire physicians
do so to engage in self-referral.
Witness the demise of a heart specialty hospital in Milwaukee; the
local community hospitals that
employed emergency physicians
forced them to not refer patients to
cardiologists that had interests in
the heart hospital.
You should do an article on the
referral behavior of hospitals that
employ their own medical staff or
own and operate primary-care
clinics. If doctors are banned
from owning specialty hospitals,
then hospitals should be banned
from owning and operating medical clinics and steering referrals
to their facilities.
George Fournier Jr., M.D.
Urologist
Yankton (S.D.) Medical Clinic
Patients first, ROI second
The vast majority of physicians recognize the inherent conflict of inter-
est in owning a facility and selfreferring patients to that facility. This
issue is not about better quality,
and it is not about a fear of competition. As a physician, I know the
power and influence we have over
our patients in making medical
decisions. This is a trust that
patients grant to us and that we
must never break.
Competition does not exist
when the only person who can
admit a patient to a hospital is a
physician and that physician just
happens to own a facility where
he will personally profit each time
he refers a patient to that facility.
I talk with physicians every day
who are very uncomfortable with
the financial incentives associated
with owning hospitals and who
are also concerned that this conflict of interest does not reflect
well on our profession.
Let’s try to remember that our
patients rely on us to place their
best interests above all else,
including the financial rewards
that physician-owners seek.
Daniel Blue, M.D.
Family physician
Sioux Valley Clinic
Sioux Falls, S.D.
What do you think? Let us and your fellow
Modern Physician readers know. Send your
letter to the editor to [email protected].
C O M M E N TA R Y
Up-and-comers
Physician-executives take the lead
limited to those positions.
Two questions all physician-execLook over Modern Physician’s
list of the most influential physi- utives should be asking: Of the
physicians you work with today,
cian-executives and one thing is
which ones have the potential to
abundantly clear—physicianexecutives are making an impact achieve leadership positions? Have
you invested your time and rein a broad spectrum of healthsources to mentor and
care organizations,
encourage these men
businesses, governand women to become
ment and industr y.
the next leaders for qualHuge insurance compaity, safety and innovation
nies, the Department of
in your organization?
Defense, top-line hospiProof of the expanding
tals and health systems,
reach and demand for
the Centers for Disease
physician-executives can
Control and Prevention,
be found in a recent white
prestigious universities
paper by William
and the U.S. Senate are
Silbaugh: The call Fulkerson Jr., chief execuamong the many places
for physiciantive officer of Duke
where physician-execuexecs
is
growing.
University Hospital,
tives go to work each
Durham, N.C., and
day.
Each person on this list probably Deedra Hartung, vice president and
started somewhere else—typically practice leader, of Cejka Search, a
on a medical staff. But the days of physician-executive recruiting firm.
“Physicians have a unique
physician-executives being pigeonunderstanding of healthcare; they
holed as medical directors and
understand healthcare delivery—
vice presidents of medical affairs
what is being created for the
are fading. Sure, many highly talpatient, and patient care—perented physician-executives still
haps more than anyone else,” the
hold those titles, but they aren’t
white paper states.
“In addition, numerous graduate
If you’re a physician and you’d like to tell
programs in business, health
your business story, please contact us at
administration, public health and
[email protected]. Submissions should
medical management are giving
be no longer than 1,000 words and should
physicians the administrative
include a color photo of the author.
expertise required for true leader-
BY BARRY SILBAUGH
Modern Physician | May 2006 • 9
ship and executive roles. With
their understanding of healthcare,
plus the additional education,
physicians are better-prepared to
impact, lead and improve financial
outcomes and success for healthcare organizations.”
Along with their operational
roles, physician-executives are
heavily involved in the nationwide
quality and safety movement.
Physician-executives use their bedside experience and management
training to lead system change by
importing lessons learned in other
high-risk industries to improve
safety in healthcare.
The quest to acquire both medical and business knowledge is
growing rapidly. More than 40 universities now offer an M.D.-MBA
degree, and about 2,000 physician-executives are taking courses
toward advanced management
degrees at the American College of
Physician Executives.
The interest in physician-executive leadership isn’t confined to the
U.S. Over the past eight months,
the ACPE launched a grass-roots
initiative to contact physician leaders in other countries to see if
there was an interest in forming
similar associations abroad.
The response was stunning,
with physicians in 24 countries
now working to gather groups of
physician-executives together to
tackle healthcare concerns.
Some of the countries forming
ACPE-like groups include China,
Japan, Mexico, the Netherlands,
Nigeria and Turkey.
Understanding consumer healthcare was one of the many topics
discussed by more than 600 physician-executives who met late last
month at the ACPE’s Spring
Institute in Las Vegas. Other topics
addressed included: making apologies for medical errors, managing
physician performance, and creating safe and productive healthcare
organizations. Among the experts
gathering to talk about these topics are Harvard University’s Lucian
Leape, adjunct professor of health
policy, and Brent James, executive
director of the Institute for Health
Care Delivery Research at
Intermountain Healthcare, Salt
Lake City.
These are tough issues. We
must all commit to reaching
beyond our individual and corporate niches and egos to find
solutions to these and many
other healthcare problems that
affect us all. If we are courageous, curious and critical,
physician-executives can grasp
new ideas emerging from outside industries that might transform the world of healthcare.
The physician leaders who are
willing to take on these challenges will likely find their own
names on future lists of influential
physician-executives. ■
Barry Silbaugh, M.D., senior healthcare
partner with Creative Management
Group, is president of the American
College of Physician Executives.
COV E R STO RY
Continued from p. 3
Healthcare’s 2005 list of the 100 Most
Power ful People in Healthcare.
Born in Troy, N.Y., McGuire graduated with a
medical degree from the University of Texas
Medical Branch, Galveston, in 1974, the same
year that UnitedHealth was formed. McGuire
became chief resident in internal medicine at
the University of Texas Health Science Center
at San Antonio.
He practiced pulmonary medicine in Colorado
Springs, Colo., from 1980 to 1985, when he
13
14
15
16
17
Herbert Pardes, M.D.
President and CEO
New York-Presbyterian
Healthcare System
New York
Elias Zerhouni, M.D.
Director
National Institutes of Health
Bethesda, Md.
Ron Anderson, M.D.
President and CEO
Parkland Health & Hospital
System, Dallas
Carolyn Clancy, M.D.
Director, Agency for Healthcare
Research and Quality
Rockville, Md.
Gary Gottlieb, M.D.
President, Brigham and
Women’s Hospital
Boston
Modern Physician | May 2006 • 10
became president and chief operating officer of
Peak Health Plan of Colorado. He joined UnitedHealth in 1988 as executive vice president.
Interestingly, McGuire’s longtime hobby is
studying butterflies. Considered a national
expert, he even has several named after him,
including a brown central Texas butterfly called
Euphyes mcguirei.
“You influence people in different ways,” says
Thomas Royer, M.D., president and CEO of
Christus Health, Irving, Texas, who ranked No. 7.
“Part of it is by actions and measuring out-
18
19
Thomas Coburn, M.D.
U.S. senator (R-Okla.)
U.S. Senate
Washington
William Jessee, M.D.
President and CEO
Medical Group Management
Association, Englewood, Colo.
20
21
Clifton Lacy, M.D.
President and CEO
Robert Wood Johnson
University Hospital
New Brunswick, N.J.
Michael Maves, M.D.
Executive vice president
and CEO, American Medical
Association, Chicago
22
Molly Coye, M.D.
CEO
Health Technology Center
San Francisco
comes. Part of it is coaching, mentoring, teaching, focusing on operations and creating a vision.
I am the first to admit I am not doing all these
things well. But being on the list gives me some
reassurance that people within the organization
are doing many things right.”
The power of motivation
The IHI’s Berwick understands power comes
from the ability to lead and motivate. Over the
past two years, Berwick’s biggest challenge
has been saving 100,000 lives by June 14.
IHI’s 100K Lives Campaign, which asks hospitals to incorporate six healthcare qualityprocess changes, is more than 60% toward
achieving the goal, he says.
“We could get there,” Berwick says. “We are
using the word saturation to describe what we
are doing. If we want to drive the standard of
performance, everybody needs to be on
board.”
Berwick admits that “everyone swallowed”
when he first suggested the goal to senior IHI
leadership during the summer of 2004. The
90-member staff and 200 associated faculty
members already felt stretched thin, he says.
“We were pretty concerned in the first three
months, and I wondered whether we would
have trouble recruiting at least 2,000 hospitals
to make this work. It looked impossible.
Hospitals hardly do anything together except to
lobby for higher payments,” Berwick says.
But hospitals surprised Berwick. “The
response has been absolutely incredible,” he
says, noting that more than 3,000 hospitals
are participating. “By month four, the fax
machine overheated with all the data coming
in. The outpouring of interest and sincere
meaningful enrollment has been inspiring.”
In June 2005, six months after beginning the
project, Berwick says he read a newsletter from
Continued on p. 11
COV E R STO RY
Continued from p. 10
Doylestown (Pa.) Hospital, announcing that the
hospital was participating.
“I picked up the phone and called the hospital CEO (Rich Reif). I thanked him and asked
him what is going on? Why be so bold?” he
recalls. “He told me that ‘Nothing is more
important in my life than participating in this
project.’ I thought, my goodness if this effort
could hook into this person, maybe we can
make it work.”
The number of physicians aspiring to be
23
24
25
26
27
Jonathan Lord, M.D.
Senior vice president,
chief clinical strategy and
innovation officer
Humana, Louisville, Ky.
John Halamka, M.D.
Chief information officer
CareGroup Health System
Boston
Paul Tang, M.D.
Chief medical information
officer, Palo Alto (Calif.)
Medical Foundation
Donald Nielsen, M.D.
Senior vice president
for quality leadership
American Hospital
Association, Chicago
Patricia Gabow, M.D.
CEO and medical director
Denver Health
Denver
Modern Physician | May 2006 • 11
CEOs of hospitals, insurance companies, medical groups or other healthcare organizations
has ebbed and flowed over the past 50 years.
Since 2002, however, the number of physician
CEOs at hospitals has increased to 3.7% of
6,008 hospitals in 2005 from 3.3%, according
to the American Hospital Association.
“Physicians as a group have come to realize
that physician interests are best looked after
by physicians,” says Lynn Massingale, M.D.,
53, chairman and CEO of TeamHealth,
Knoxville, Tenn., who ranked No. 40.
28
29
30
31
Dennis O’Leary, M.D.
President and CEO, Joint
Commission on Accreditation
of Healthcare Organizations
Oakbrook Terrace, Ill.
Delos “Toby”
Cosgrove, M.D.
CEO
Cleveland Clinic Foundation
Brent James, M.D.
Executive director, Institute
for Health Care Delivery
Research, Intermountain
Healthcare, Salt Lake City
Charles Denham, M.D.
Chairman
Texas Medical Institute of
Technology, Austin
32
Harry Jacobson, M.D.
Vice chancellor for health
affairs, Vanderbilt University
Medical Center, Nashville
Massingale says the movement to pay-for-performance will encourage more physicians to
enter the executive ranks.
“It should be easier for us as clinicians to
understand it and communicate it better to
physicians and nurses,” says Massingale, who
has led the contract-management firm for
26 years. “There is a lot of resistance of physicians to pay-for-performance. A lot of doctors
feel it is pay for lower utilization. Some feel it is
economic credentialing in disguise. I don’t personally believe that, but because of the power
of the payers, we are headed that way.”
Making pay-for-performance work
While in academic medicine in the 1980s,
AHRQ’s Clancy, 52, conducted a study that
showed providing financial incentives to doctors
and hospitals improved patient care.
“HMO patients had far fewer discretionary
tests like chest X-rays,” Clancy says. “Now the
focus is on pay-for-performance. The question
is how to design these programs.”
Organizations such as AHRQ have provided
encouragement to physicians because of their
emphasis on clinical improvement.
“This year we want to do two big things:
Implement the patient-safety bill and provide
information on what works and what does
not,” says Clancy, who has been with AHRQ for
16 years. She took over as director in 2002
after the sudden death of Director John
Eisenberg, M.D.
After graduating from the University of
Massachusetts School of Medicine in 1979,
Clancy completed her internal medicine residency at Memorial Hospital, Worcester, Mass., in
1982. She was elected to the Institute of
Medicine in 2004.
“I don’t come from a medical family. They had
business backgrounds, but I knew I wanted to
Continued on p. 12
COV E R STO RY
Continued from p. 11
be a doctor since I was 9,” Clancy says.
The son of a country physician in Connecticut,
Berwick, 59, also knew at an early age he
wanted to become a doctor.
After graduating with a joint degree in medicine and public policy from Harvard Medical
School and the John F. Kennedy School of
Government in 1972, Berwick became deeply
interested in health policy. He interned at
Massachusetts General Hospital, Boston, in
1972 and then pursued a pediatrics residency
33
34
35
36
37
David Pate, M.D.
Senior vice president and
CEO, St. Luke’s Episcopal
Hospital, Houston
Edward Murphy, M.D.
President and CEO
Carilion Health System
Roanoke, Va.
James Schibanoff, M.D.
Editor in chief
Milliman Care Guidelines
Seattle
David Blumenthal, M.D.
Professor of medicine and
healthcare policy
Harvard University
Cambridge, Mass.
Sidney Wolfe, M.D.
Director, Public Citizen’s
Health Research Group
Washington
Modern Physician | May 2006 • 12
at Children’s Hospital Medical Center, Boston,
finishing training as a senior resident in 1978.
“I wanted to stay in academic medicine, do
research and see patients. In clinical medicine,
I saw the visible continuing burden of the
defects in patient care,” he says. “Every doctor
knows you are fighting uphill and how difficult it
is sometimes to reach the patient.”
But it wasn’t until 1980, when he became
acting research director and director of quality
assurance at Harvard Community Health Plan,
where he saw first-hand how inefficient medi-
38
39
40
41
David Pryor
Senior vice president
of clinical excellence
Ascension Health, St. Louis
Jack Lewin
Executive vice president
and CEO, California Medical
Association, Sacramento
Lynn Massingale
Chairman and CEO
TeamHealth
Knoxville, Tenn.
Quentin Young
National coordinator
Physicians for a National
Health Program, Chicago
42
Robert Weinmann
President, Union of
American Physicians and
Dentists, Oakland, Calif.
cine had become under managed care.
“I had a lot of latitude to study care
processes,” he says. “I learned that traditional quality assurance in healthcare is difficult and ineffective. It opened my eyes to
quality improvement.”
But it was in 1999, when his wife, Ann, was
hospitalized with symptoms of a rare
autoimmune disorder of the spinal cord, that
Berwick saw the flaws of the healthcare system
from the patient’s and family’s perspectives.
“All of that was happening to me, and I hated
it,” he says. In a speech a few months after his
wife’s hospitalization, he said about quality
improvement: “Before, I was concerned. Now, I
have been radicalized.” Ann recovered and
returned to her job as an attorney and environmental consultant.
A ‘journey to excellence’
Royer’s career spans jobs at Henry Ford
Health System, Detroit, where he was senior
vice president of medical affairs and chairman
of the medical group from 1994 to 1999, and
18 years with Geisinger Medical Center,
Danville, Pa., where he held posts as medical
director and founder of the hospital’s emergency medicine residency program.
A surgeon, Royer completed his residency in
1972 at Geisinger, where he was chief resident
and president of the house staff association.
He earned his medical degree from the
University of Pennsylvania in 1967.
Royer, 65, says his biggest challenge came
when he joined Christus in 1999. It was only
several months after the 40-hospital Catholic
system was formed through the merger of
Incarnate Word Health System, San Antonio,
and the Sisters of Charity Health Care
System, Houston.
“We looked at the overall matrix, and while
Continued on p. 13
COV E R STO RY
Continued from p. 12
we had some excellent areas, we were not very
good overall,” he says. As a result, Royer initiated in 2000 what he calls “our journey to
excellence.” The goal of the initiative is to
achieve the 90th percentile in various national
standards in four categories: clinical quality,
patient service, business practices and community value.
“A lot of factors helped us move from the
lower third to the upper third percentiles in
these categories,” he says. For example, the
effort to improve business practices helped
Christus improve its operating margin from -7%
in fiscal 1999 to about a 5% positive margin
projected in fiscal 2006. It also improved clinical quality to the 90th percentile from the 75th
percentile in measures that include mortality
43
44
45
46
John Wennberg, M.D.
Director, Center for the
Evaluative Clinical Sciences
Dartmouth Medical School
Hanover, N.H.
Jeffrey Drazen, M.D.
Editor in chief
New England Journal of
Medicine, Boston
Harvey Fineberg, M.D.
President
Institute of Medicine
Washington
Paul Convery, M.D.
Executive vice president
and CMO, SSM Health Care
St. Louis
Modern Physician | May 2006 • 13
rates and re-admissions, Royer says.
“We realized we also needed to improve
patient satisfaction because that impacts our
financial performance and clinical quality,”
says Royer, who authorized an employee incentive program. But what propelled them to the
top percentile nationally was guaranteeing
excellent care.
In 2003, Christus became one of the first
systems to offer patients a written guarantee
for exemplary service. The guarantee provides
“apology gifts” to patients that include gift
certificates, coupons for free health tests and
gift baskets.
“We want to increase transparency in this
organization so the community can see our
financial picture and community value. If we do
that, then we can be held accountable and we
47
48
49
50
John Anderson, M.D.
Senior vice president
and CMO, Catholic Health
Initiatives, Denver
Robert Galvin, M.D.
Director of global
healthcare, General Electric
Co., Fairfield, Conn.
Ronald Greeno, M.D.
Co-founder and CMO
Cogent Healthcare
Irvine, Calif.
Darrell Kirch, M.D.
CEO, Penn State Milton S. Hershey
(Pa.) Medical Center; incoming
president, Association of American
Medical Colleges, Washington
can’t be complacent,” Royer says.
Gabow earned her medical degree at the
University of Pennsylvania Medical School in
1969 and completed her residency in internal
medicine at the Hospital of the University of
Pennsylvania, Philadelphia, and Harbor General
Hospital, now called Harbor-UCLA Medical
Center, in Torrance, Calif., in 1971.
She joined the staff of Denver Health in
1973 as chief of the renal division and became
director of medical service in 1991. Gabow,
62, became CEO in 1992.
“Our biggest accomplishment was when we
left city government in 1997 to form an independent public authority,” says Gabow, who
adds that she had to convince Denver’s mayor it
was a good idea. “I was persistent. The mayor
asked me if I was ever going to get off this
issue. I told him until he said ‘yes.’ ”
Under Gabow’s leadership, Denver Health
upgraded its facilities, and opened new neighborhood clinics to serve the poor and uninsured and new operating rooms.
Gabow, a nationally known researcher in polycystic kidney disease, continues to serve as a
professor of medicine at the University of
Colorado School of Medicine. From 1985 to
2001, she was the principal investigator of the
world’s largest study of adults and children with
autosomal dominant polycystic kidney disease,
a study that led to treatment breakthroughs.
“I am most excited about launching an effort
the past 18 months in part from AHRQ to
begin system transformation,” Gabow says.
“We would expect our costs to go down, our
revenue go up, our employee turnover go down
and see our excellence in quality go up.” ■
Jay Greene is a former Modern Healthcare
reporter and now a freelance healthcare writer
based in Thompson, Conn. Contact Greene at
[email protected].
BY T H E N U M B E R S
Modern Physician | May 2006 • 14
THE CHECK’S IN THE MAIL
CHARITY CARE
Median days of gross fee-for-service charges in accounts
receivable for single-specialty groups.
Percentage of physicians by specialty providing free care (2004-2005)
Pediatrics
Anesthesiology
60.5%
52.1%
Medical specialist
63.7%
Family/general practice
Cardiology
66.7%
Internal medicine
40.2%
67.2%
Surgical specialist
Family practice
78.8%
39%
Source: Center for Studying Health System Change
Internal medicine
PHYSICIAN EFFICIENCY VARIES
37.7%
Dartmouth Medical School researchers studied how many physician
full-time equivalents were used while caring for Medicare patients at
79 academic medical centers from 1999 to 2001. A greater number
implies more inefficiency. Below is a sample of their findings.
Orthopedic surgery
54.2%
Pediatrics
35.6%
Surgery: general
42.4%
Source: Medical Group Management Association Cost Survey 2005: Report based on 2004 Data
Academic medical center
New York University Medical Center, New York City
Rush-Presbyterian-St. Luke’s, Chicago
Methodist Hospital, Houston
Allegheny General Hospital, Pittsburgh
Temple University Hospital, Philadelphia
University of Massachusetts Medical Center, Worcester
University Medical Center, Tucson, Ariz.
University of California Davis Medical Center, Sacramento
University of Wisconsin Hospital, Madison
University of Cincinnati Hospital
Source: Health Affairs
Physician
FTEs per
1,000 patients
28.3
19.4
16.2
14.9
12
11.7
10.1
9.1
7.8
7.5
NEWS MAKERS
ASSOCIATIONS
Jordan Cohen, M.D., president of
the Washington-based
Association of American Medical
Colleges, will receive the
American Hospital Association’s
Award of Honor for his “outstanding contributions to improving the
health status of communities and
the nation.” Cohen, 71, who is
retiring from the AAMC in June, is
scheduled to receive the honor
May 1, during the AHA’s annual
membership meeting in
Washington. … The National
Patient Safety Foundation, North
Adams, Mass., appointed Paul
Gluck, M.D., 59, a Miami-based
obstetrician, chairman of the
NPSF’s 15-member board of
directors. … The
Arlington Heights,
Ill.-based
American College
of Osteopathic
Family Physicians
elected Steven
Rubin, D.O., 50,
as president-elect
of the 25,000Rubin
member organization; Thomas Told, D.O., 64, was
installed as the group’s president. … Andrew Pollak, M.D.,
Making news? Send your personal and
personnel stories to [email protected].
Please attach a color photo of your
Modern Physician News Maker with
your submission.
Modern Physician | May 2006 • 15
42, was elected chair of the
Board of Specialty Societies of
the American Academy of
Orthopaedic Surgeons.
CONSULTANTS
Witt/Kieffer, the Oak Brook, Ill.based executive
search firm, hired
William Downham,
M.D., as a consultant in its
St. Louis office.
Downham, 58,
formerly was
interim executive
vice president for
Downham
care management
at Private Healthcare Systems in
Waltham, Mass.
HOSPITALS, SYSTEMS
Thompson Health, the
Canandaigua,
N.Y.-based health
system, named
Carlos Ortiz,
M.D., its senior
vice president of
medical services
and medical
director of the
system’s hospiOrtiz
tal, F.F.
Thompson Hospital. Ortiz
declined to disclose his age.
RESEARCH
Jonathan Sackner-Bernstein,
M.D., 45, has been named to the
new post of chief medical officer
of clinical research at Clinilabs, a
clinical research organization affiliated with St. Luke’s-Roosevelt
Hospital Center in New York. He
also is director of the
Cardiovascular Safety Unit at
Clinilabs. He had been director of
the Heart Failure Prevention
Program at North Shore University
Hospital in Manhasset, N.Y.
SUPPLIERS, VENDORS
HKS Medical Information
Systems, Omaha, Neb., appointed
John Kelly, M.D.,
to its board of
directors. Kelly,
57, is vice president, chief health
and medical officer of the Union
Pacific Railroad.
… Kenneth Kizer,
M.D., chairman
Kelly
and chief executive officer of software vendor
Medsphere Systems Corp., Aliso
Viejo, Calif., received the 2006
“Leadership in Innovation” award
from the Adaptive Business
Leaders Organization. Kizer, 54,
was cited for being a “pioneering
advocate of information technology as an
enabler for
improving healthcare quality” by
the Orange,
Calif.-based
organization,
whose members
are CEOs and
presidents of
Kizer
technology and
healthcare companies. Kizer was
the founding president and CEO
of the National Quality Forum, a
not-for-profit organization that
developed consensus standards
for healthcare quality improvement. The award will be presented
at the ABL’s annual Innovations
in Healthcare Awards and Event
ceremony to be held June 7 in
Long Beach, Calif.
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