California’s crisis grows deeper

The Riverside County Medical Association announced today that a new bill – SB 726 that is now on the assembly floor must be stopped. It is predicted that the bill would erode the patient protections of the bar on the ‘corporate practice of medicine’ in California. It is sponsored by AFSCME, a labor union interested in unionizing doctors, and the California Association of Healthcare Districts, whose members want to hire and control physician services.

Recently, the supporters have significantly stepped up their attacks on the County Medical Association and physicians who support the ban. Low ball tactics such as incendiary press releases, a factually inaccurate website, and increased presence in the media are all being utilized to pressure legislators to erode the ban on the corporate practice of medicine.

Please be advised that the unions and hospitals are urging their members and other physicians to call to register support so your participation is absolutely necessary so that legislators know the true impact this bill would have in their districts.

Your involvement is critical to ensure that legislators understand the impact this bill will have on the quality of care their constituents receive in California hospitals. We need to let these legislators hear from as many doctors as possible that these bills are bad for patients (their constituents).

Talking Points

. The ban on corporations practicing medicine is an important protection for patients in California hospitals. This protection ensures that those who make decisions that affect the provision of medical services (1) understand the quality of care implications of that medical service; (2) have a professional ethical obligation to place the patient’s interest first; (3) are subject to the Medical Board of California.

· SB 726 will erode the quality of care in California hospitals. It will grant control over physicians who should be making the decisions on treatments to hospital CEOs and administrative staff who have different motivations and mandates than physicians. This will create conflicted loyalties in an institution that must remain true to the patient’s interests, and will erode the quality of care patients receive in California hospitals.

· Placing doctors under the oversight of hospital administrators and CEOs who are under enormous pressures to cut costs or increase revenue will threaten the independent medical judgment necessary to ensure patients are protected. A study has recently been released showing a motivation for hospitals to acquire physician practices is financially and anti-competitive based, not just for increased access for patients.

· Hospitals are already interfering with medical staffs’ ability to ensure quality care through independent self-governance. For example, some hospitals have adopted medical management protocols which have resulted in inappropriate hospital tests, procedures, and stays, jeopardizing patients and increasing costs.

· Allowing a hospital to directly employ a physician will NOT increase access to physician services. The hospital will push patients to their preferred provider thereby controlling the competitive market. Other non-employed physicians will not be able to compete and likely be forced out of town resulting in no increased access.

· CMA supports policies that will truly increase access to care, without compromising the quality of care. The CMA supported bills that now are providing over $2 million dollars in medical school loan repayment for physicians who agree to practice in these areas. Since loan repayment obligations is one of the primary reasons physicians will not go to underserved areas, this will attract physicians to these areas without compromising the quality of care patients receive.

· Hospital Districts already have numerous financial incentives they can use to recruit physicians. Proponents of eliminating the corporate bar, including hospitals districts – have failed to show why allowing corporate entities to directly hire physicians would work where these incentives have failed. A list of incentives currently available to hospitals and hospitals districts include:

- guarantee to a physician and surgeon a minimum income for a period of no more than three years from the opening of the physician and surgeon’s practice,

- guarantee purchases of necessary equipment by the physician and surgeon,

- provide reduced rental rates of office space in any building owned by the district or any of its affiliated entities, and

- provide other incentives to a physician and surgeon in exchange for consideration and upon terms and conditions the hospital district’s board of directors deems reasonable and appropriate.

None of these incentives grant hospitals or hospital districts the control over the actions of physicians which they seek through the ability to hire physicians – the real goal of eliminating the patient protections of the corporate bar.

It is critical for the integrity of patient care in California hospitals that physicians remain independent from the corporate influence of hospital administrators and CEOs, who must answer to priorities other than patient care. By eliminating this protection for patients, SB 726 will erode the quality of care those patients receive in California hospitals.

The ban against the corporate practice of medicine provides a fundamental protection for patients by ensuring their physicians’ sole interest is what is best for the patient. When hospitals are allowed to directly employ and charge for physician services, quality of care suffers due to the fact that hospitals derive income from patient beds being filled.

I recognize there is a shortage of physicians in some areas. However, there are ways to address that shortage without allowing hospitals to control physician employment. Increasing slots to allow residents to train in California, developing the medical schools at UC Merced, UC Riverside and expanding access to California’s loan repayment program will truly ensure physicians go to and stay in rural and underserved areas.

Simply allowing hospitals to employ physicians may actually result in reduced access and increased costs. Hospital employment of physicians eliminates competition for outpatient services and instead forces all care to be delivered through the hospital. As hospitals gain market share in small communities, physicians not employed will likely be forced out of business and surgery centers outside the hospital will likely be forced to close. This results fewer options for patients and increased costs as the hospital is able to charge higher rates with the elimination of competition.

As if the insurance companies, fortune 500 CEOs who own them, and their constituents didn’t have enough control, now they want to be the ones to actually pull the plug and demand payment right then and there – and this of course comes from California, a state where logic is absent and government strangles (quite literally if they get their way) the very last breath from your dying body.

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