The Impact of Corporate Groups on Your Medical Practice…and What AAEM is Doing About it!

Issue: January/February 2022

Author: Lisa A. Moreno, MD MS MSCR FAAEM FIFEM
President, AAEM

As I write this message, we are scarcely into the New Year, and yet the hopes we voiced for 2022 as 2021 was coming to an end are all but vanquished, just as the hopes we had for 2021 when we were in December 2020 were similarly vanquished. We try to be positive. We try to be optimistic. We know that our mental health depends on our ability to generate positive energy and see the best in every situation. But emergency physicians are both scientists and public health leaders, and based on this training, we know that if we fail to identify a problem, we cannot begin to find solutions. Here is the problem, and it’s a problem that AAEM has been warning our colleague EM organizations about for decades with the passion of herald angels shouting the Christmas message to the world:

The corporate practice of medicine is destroying the practice of medicine. Private equity has no place in health care. What is good for private equity is not good for patients and not good for physicians.
As a physician scientist, I cannot help but note the inverse correlation between the rise of private equity in medicine and the fall of health care quality and physician satisfaction. Join me as I look at what has happened to health care in correlation with the rise of the corporate practice of medicine.

Inadequate supply chain.
When medicine is run as a business, it makes no sense to stockpile supplies in preparation for disaster. Supplies have expiration dates and
throwing things out costs money. It also makes no sense in this model to ask physicians how to stay prepared for patient care. Folks with MBAs and MPAs know so much more about how to run a hospital system for profit. Let them make the decisions, using the models they use to predict how much of what items we need. In order to keep earning interest on our investments, let’s not be prepared too far in advance. We can always
order more later. Enter COVID. Where is the PPE? The administrators who caused the problem don’t need to enter patient care areas, so they’re not impacted. But the physicians and nurses, the patients and families are the ones who paid the price. THEY DIED. WE DIED. We were told to reuse our PPE. Families were not permitted to visit. Patients died alone or with a compassionate nurse holding an IPad so a family could watch their loved one die on Zoom. The administrators sat in their offices and sent us pizza and told us we are heroes. In 2022, we have adequate PPE, but we are certainly lacking in other things. How many pharmacies and clinics are running out of point of care COVID test kits? There have even been instances of hospitals running out of test kits and asking physicians to use them judiciously. Even prior to COVID, drug shortages were seen more frequently than in previous years. When you run medicine as a business, you’re not prepared for the unexpected.

Inadequate inpatient beds resulting in increased boarding times resulting in increased wait times in the ED.
In a business, models are used to predict occupancy and an effort is made to operate at a set occupancy rate for maximum efficiency and maximum profit. Hotel chains can predict which cities will see peak occupancy during Mardi Gras and which during college graduations. But health care doesn’t work like that. No one was able to predict the COVID pandemic, Ebola, the anthrax scare, the bath salts trend. Being prepared for medical emergencies is not cost effective. Instead, administrators use the hotel model to plan for bed use. They use a business model to determine how many beds to open at what time of year. When the unexpected happens (Hello, this is emergency medicine!), they are not prepared. But they can sit in their offices and rely on the ED to board patients until beds are available, to downgrade unit patients to floor status, and sometimes to even send them home from the ED after their “inpatient hospitalization” has been concluded. They rely on us to run out into the waiting room and make sure no one dies, to pull patients with fast track issues into corners and stealthily exam them, to perform H&Ps in triage and then discharge from the waiting room. There is no concern in this business model for the dignity of the patients. There is no concern for the stress on the physicians, nurses, housekeepers, transporters, or any of their employees. There is no attention to the literature that shows that admitted patients who board in the ED have worse outcomes than those who are cared for on the inpatient floors or in the ICUs.

Inadequate physician and nursing staffing in the ED.
In the business model, this is also a supply chain issue. Managers keep on hand only what they plan to use in a specified time period. So, on a given shift, it is cost effective to have just the number of doctors and nurses who will see X patients per hour, and a business model is used to predict how many patients that will be. Make no mistake about it, you are no different to the corporation that employs you than a sack of frozen french fries is to the local McDonald’s. You are an item in the supply chain. Administrators are not there when a school bus is hit by a tractor trailer. You won’t see them down in the ED when eleven people are shot at a single event or when a building collapses. Instead, they stock the number of staff they can use most efficiently and cost effectively according to their prediction models, just like they stock the optimal amount of gauze pads. Make it work, Dr. Dear.

Decreased patient satisfaction.
It is logical to us that people who are boarded in the ED for 72 hours, people who wait for an ED bed for five hours, people who are not permitted to speak to the doctors and nurses about their family members, who can’t visit them, who are treated by staff wearing dirty PPE are not going to be happy campers. But if patient satisfaction scores are low, who is blamed? Not the administrators handing down the untenable policies. No, the doctors and nurses are taken to task and counselled on how they can increase their patient satisfaction scores. And while this is painful, it’s not as tragic as…

Decreased faith in the medical system.
Since the proliferation of corporations practicing medicine, patients are expressing less faith in the medical system. This is evidenced by the frequency with which patients reject solid medical advice to mask, vaccinate, and socially distance. It is also evidenced by recently published surveys that document the distrust. Patients do seem to trust their physicians but they don’t trust the health care system. And too few of them have a primary care physician. And the patients most profoundly impacted are those who are most vulnerable and most at risk to start with: poor whites, Black and brown patients, those who don’t speak English, the uninsured, the underinsured, those living in rural areas and those with low health literacy or limited access to care.

Absence of due process.
It is estimated that at least one third of emergency physicians are employed by a corporate medical group (CMG) and it is standard practice for CMGs to require physicians to waive their due process rights as a condition of employment. The result is, as we have said many times in these pages, that physicians cannot do the right thing for the patient, cannot speak up about patient safety issues, and cannot ask for the help that they need when there is understaffing and overcrowding, because they fear that their employment will be terminated, and they will have no recourse. You would have more rights if you worked as a cashier at Trader Joe’s than you have when you work as a physician for a CMG.

Restrictive covenants.
Again, the Academy has been saying for decades that there are no trade secrets in EM. What do we do if we figure out a new way to address a difficult emergency department complaint? We make a YouTube video so that everyone else will benefit. We have no private patients and the guys who think they are our private patients are usually the ones we’d like to pass on to another doc. When our waiting room is filled to capacity, we’d be happy to have folks go to a “competitor.” Yet if we are terminated, or we want to quit to take a position that offers us something better, we can’t work within a given radius of our CMG. Did you go to medical school and through residency to have to live apart from your family or have to sell your house and move to a new city after being fired for speaking up about a patient safety issue? I didn’t think so.

Monopoly of jobs and services in certain cities and states.
When the CMG owns every hospital in town there can be fee setting, price fixing, and salary determination based on their needs and wishes and their needs and wishes only. Read the interview with Georgia Congressional Candidate Dr. Rich McCormick in this issue. Monopolies are bad for employees and bad for customers. And they are worse for doctors and patients, who have much more on the line than being satisfied with the quality of your burrito and the service and cleanliness of the local restaurant.

Corporations hiring mid-level practitioners to replace physicians.
They are cheaper. They save the corporation money and increase profits for the stockholders. Data shows that they over order and over consult, but this is a boon for the corporation. They can charge for all this! You and I know that it’s not a boon for the patient, who is now subjected to more procedures, all of which have attendant risks, and too many insignificant but abnormal test results that need to be chased, and more consultations that increase through put time in an already overburdened system. You and I also know that mid-levels have less than 10% of the clinical training of board certified physicians (in many cases, 500 hours compared to our 12,000 hours), and lack of clinical training and adequate supervision can only result in poorer patient outcomes, especially for the most vulnerable among us. The first officer is never allowed to fly the plane unless the licensed pilot is in the flight deck supervising her. Why? Because lives are at stake. Good morning, legislators who are allowing the corporate practice of medicine and independent practice by mid-levels: lives are at stake in the ED as well.

A proliferation of emergency medicine residency programs which is resulting in a predicted surplus of emergency physicians, and many say substandard training in many residencies.
CMGs are now running residencies. The vast majority of residencies approved in the past few years are owned by CMGs. They benefit from the cheap labor of residents, in some cases supervised by nurse practitioners and PAs (because they are cheaper for the CMG to employ, see above) who may have less clinical hours than a senior medical student. It benefits the CMG to push out a glut of EPs since when supply exceeds demand, price falls. No one is paying attention to the quality of the training. This is a recipe for disaster as poorly paid, inadequately trained physicians are practicing in the most demanding field in medicine. What happens next is…

Predictions of less medical students and less prepared medical students applying to our residencies.
Emergency medicine is, arguably, the most challenging of all specialties. We are the only physicians who see undifferentiated patients who don’t know their medical histories and medication lists or are unable to tell us this information by dint of their presenting problem. Emergency physicians must be able to simultaneously manage several critically ill, injured, and dying patients at the same time and make the right decision quickly, under duress and with limited information. It is essential therefore that the best and the brightest, the most decisive and the strongest medical students enter the specialty of emergency medicine. If the current trends continue this just isn’t going to happen. And we all eventually end up in the ED at some point in our lives, which means we’re all going to pay the price. (CMG executives: this includes you. Oh, I forgot. You make so much more money than we do that you can afford to have your own private concierge doctor. And we know that doctor is a physician, not a Doctor of Nursing Science or a PA with a PhD.)

Increased depression, burnout and suicide among physicians and other healthcare professionals.
I don’t have to expound on this. You’re living it.

I’ve depressed you by reminding you of things you already know, but here’s the take home message:

This is happening because we are allowing private equity and corporate medical groups to take over our profession. We need to stop this. And at AAEM, we are!
You know how I always say, “AAEM is our members”? Well, step up family, because we need you now. And we need you, because you need us, and we are the only voice in EM with the courage to stand up to corporate medicine and private equity. The quick and simple things which we told you to do previously are first, look out for our announcements about HR 6910 and ensure that you and everyone you know contacts your members of Congress and tell them to support this bill, and second, to monitor your state legislature for the introduction of bills supporting independent practice for NPs and PAs. When you see this, let us know immediately so that we can help you educate your state legislators and prevent these bills from passing and endangering the health care of the people in your state.

And now, I’m going to ask the most important thing. Renew your membership and get every EP you know to join AAEM. We need the power of your numbers and we need your membership money. I know it’s hard to ask. I’m the girl who felt guilty asking neighbors to buy Girl Scout cookies. But I don’t feel guilty asking for this. AAEM is funding perhaps the most remarkable lawsuit in the history of emergency medicine. We are funding a suit against Envision for the illegal corporate practice of medicine in the state of California. The AAEM-PG has standing in this case because Envision displaced a private democratic group that was a member of the PG. This means that we are seeking no monetary compensation, so we will not “settle out of court.” We are taking this for the full ride. Our legal expenses are anticipated to be at least two million dollars, but if we prevail, the result will be a ban on Envision’s practice of medicine in California. This decision can then be used to ban other CMGs from practicing in California and then on to banning Envision and other CMGs from practicing medicine in other states. This is huge. This is expensive. If you are reading this, it is possible that your membership has expired. Please renew. Please ask everyone you know to join or renew. Staff and the Board will be contacting you if your membership has expired. Be nice to us. We exist to serve you, but we need your membership dollars. And, more than that, we need you to make a tax deductible contribution to the AAEM Foundation—as much as you possibly can afford. This is an investment in your future. This is an investment in your career. If we lose this opportunity, we may never have another. By the time you read this, I will have reached out to the Presidents and Boards of every other EM organization. I will have asked them to support us with both statements of support and with contributions. I am challenging them to stand up for the integrity of emergency medicine practice and for the sanctity of the physician patient relationship. If you care about health care disparities, you will stand with us. If you care about workplace fairness for physicians, you will stand with us. If you care about the future of emergency care in America, you will stand with us. I cannot state this any more clearly or any more emphatically. You must stand with us as we are standing for you.