Corporate Takeovers and Antitrust

Another link to information on Antitrust and Rural Health 1996 at http://www.nrharural.org/dc/issuepapers/ipaper2.html

Personal account of antitrust issue in Federal District Court

As an expert witness in a recent antitrust case (my first and hopefully last time, email me if you really want an eye full!), I was privy to the pretrial and trial maneuvers and saw the impact of a big corporate system on a whole region over a number of years. I think that the trial is a useful illustration of specialist vs generalist systems of care and I have included my comments. My main view of this antitrust case is that it is and was a costly waste of time that either or both parties could have avoided. My view of the specialist vs generalist debate is much the same. We have all been swallowed up by the whale of health care. Like Jonah, only when we keep our faith and serve patients well, will we come out of the whale alive.

The facts of the case are actually fairly clear. This corporation made some major errors in judgment regarding division of markets, driving off independent practitioners (by refusing to share call, cutting off collegial and other communication, failing to reimburse primary care and specialty docs for procedural services at some locations), and taking over independent hospitals with a variety of questionably legal manuevers(most of them had little choice but to join or die). The question, unfortunately, was how much this damaged an insurer (not practitioners, the state, or patients).

The interesting thing is what happened over the years in areas where the corporation took over. They expected patients to prefer them due to their specialists and high tech and big hospital. They even used this "high quality" claim to support their highest price in the state care. When they did quality research a few years before, they found that they were wrong (unfortunately this was not information used in the case) . Their own studies showed that patients preferred the local independents. This is certainly one measure of quality and bad news for big systems that feel that they can do "better" simply by making themselves available. At the local level, the independent doctors that were able to tolerate the corporate maneuvers and stay, actually did well. It seems as though the corporate doctors were hard to find past 4 PM and after hours, there was less continuity, etc.

Isn't the birth of family medicine much the same? We came to be because big medicine forgot about patient care. The issue is more and more becoming who actually can take care of people both efficiently and well.

I have no fear that family physicians are the closest to this model.

There are other lessons from the case. Larger corporations can always use the legal system to distract smaller ones, but only if the smaller ones get distracted. Our lesson in family medicine is to stay focused on what we need to do better rather than justifying our existence. With workforce policy and federal lobbying, for instance, we are beginning to look a bit

"fat cat" much like non-fp docs have done for 20 yrs. We could do far better in ambulatory care, community medicine, doctor-patient relationships, etc.

In this particular corporate system, the doctors thought they were in control, but this was in doubt. Their corporate head was still practicing half time as a specialist and a physician being groomed for the top spot didn't even know basic revenues. Administrators working full time really set the agenda. As a for-profit corporation many years before, it seemed that the doctors really prioritized the care of patients and the care of the region as a whole. As a not-for-profit corporation in more recent years saving millions in tax dollars, the corporation prioritized the dollars and assuaged their guilt by foundation activities and trumpeting their few truly non-profit activities. This case is also another measure of how dollars alone do not dictate quality. It is a measure of how competition does help determine quality.

This also does not mean that well run larger corporate systems cannot beat independent or smaller corporations.

This does not mean that administrators are bad. There must be a balance between administration and service and information components for solo physicians or large corporations. One of the major barriers to organizing rural health care systems is the lack of trust between physicians and administrators. There is no longer any time to waste on mistrust.

In most organizations, the most stressful times are when there are major changes in leadership, organization, and mission. Physicians who collaborate with other physicians or hospitals will face incredibly stressful times as all three areas change. There is little room for reflecting on past disagreements. It takes time to build trust and gather the necessary resources. The following are some successful strategies for addressing necessary change from a family physician, John Saultz as he made recommendations for effective leadership:

1. Encourage multidisciplinary thinking

2. Reinforce or core values

3. Be confident, but vigilant

4. Be open and approachable

5. Improve negotiation skills

Before we focus on defending the faith and practice of family medicine (and risk entrenching it instead of improving it), we better master the above internal tactics rather than waste our time on needless external debates.

Rural Practice and Managed Care: A Success Story