How Might Crushes Right In Healthcare

Richard Gunderman goodDr. Melos is a gastroenterologist in solo practice in a medium-sized Midwestern city.  One day she hears a knock on her door.  When she answers, she finds two representatives of Athenian Health System, who request a few minutes of her time.  She invites them to take a seat in her office.

After exchanging pleasantries, the visitors get down to business.  They extend Dr. Melos an offer to join the ranks of Athenian’s employed physicians.  If she declines, they say, they will hire their own gastroenterologist, whose practice will grow rapidly on referrals from their large network.

The representatives of the health system are remarkably candid.  “We will not take up your time with arguments about the appropriateness of what we are doing.  What we have here is a large imbalance of power, and as a business matter, you really have no choice.”

Dr. Melos replies that she has always worked amicably with Athenian Health, using many of its diagnostic testing services and admitting her patients to its facilities, so the health system has no need to deliver such an ultimatum.

The representatives respond that, if they allowed Dr. Melos to maintain her practice in the form she is accustomed to, it would make Athenian Health, which is seeking to consolidate its market position in the area, look weak. 

Dr. Melos counters that if the health system delivers on such a promise, other physicians and physician groups will become alarmed and begin combining forces to resist Athenian Health, undermining its prospects.

The representatives of the health system respond that many of the larger physician groups in the area are already on board, giving them strong financial incentives to remain aligned with the health system.  It is only the small-group and solo practices that stand in the way now.

Dr. Melos replies that it would be an abrogation of professional responsibility for her to submit to such intimidation.  “I have provided excellent care to my patients for many years, and I have every right to maintain my practice in peace.”

The health system’s representatives respond that the discussion is not about professional responsibility.  Instead it is about survival, and if Dr. Melos does not agree to become an employed physician, many of her patients will soon be seeking care elsewhere.

Again, Athenian Health’s representatives demonstrate remarkable candor.  “This is not a debate over how the world of healthcare should be.  This is a demonstration of how the world is.  You owe it to your patients and yourself to accept our offer.”

Dr. Melos argues that, although her tiny practice cannot begin to match the resources of a vast health system, she still might prevail.  After all, she believes that what she is doing is right – a moral high ground that the health system cannot claim.

The representatives of the health system respond that the discussion is not about high ground and low ground or right and wrong.  It is about strength and weakness, and as the far weaker of the two parties, Dr. Melos has no choice but to submit.

Again, Athenian Health’s representatives do not mince words.  “What we have here is a straightforward business necessity.  We urge you to confine your attention to the hard facts on the table, not invisible hopes that can only lead to the loss of your practice.”

Dr. Melos repairs to examples from history.  “What if the Israelites had continued to submit to the Egyptians or the American colonies had simply capitulated to the British?  Many of the most important chapters in history were written when the weak stood up to the strong.”

The representatives of the health system respond that the weak should not place their hopes in historical anecdotes or moral arguments.  For every weak community that successfully stood up to power, there are hundreds – perhaps thousands – who were simply crushed and forgotten.

Dr. Melos insists that her colleagues will come to her aid.  A variety of professional organizations — county, state, and national medical associations, not to mention her own specialty societies – they would never stand for such coercion.

The health system’s representatives respond that such professional associations have very little to gain and a great deal to lose in taking up the cause of a solo practitioner, largely because their plates are filled with far higher-profile concerns.

“We are not making a new set of rules here,” conclude the representatives of Athenian Health.  “This is how the strong have always treated the weak.  In fact, we are certain that if you were in our position, you would be doing exactly the same thing.”

Despite the overwhelming force of the health system’s arguments, Dr. Melos chooses to resist.  Soon the health system makes good on its threats, hiring its own specialist and using its large physician network to erode away Dr. Melos’ referral base.

Within two years, Dr. Melos’ practice has shrunk to such a degree that she can no longer meet her costs.  She sees no alternative but to relocate to a smaller town in another state.  Initially, things seem to go well there, and soon she begins to forget about the whole affair.

Yet in this new town too, it is not long before another health system acquires the hospital and purchases its first local medical practice.  So far, no one from Spartan Health has approached Dr. Melos, but she knows that it is only a matter of time before she again hears a knock at the door. . . .

Richard Gunderman is a Professor of Medicine at the University of Indiana.

Spread the love

4 replies »

  1. A curious inversion of Aesop’s fable of belling the cat. It is the last mouse that gets eaten.

  2. Health systems have enjoyed a huge competitive advantage by having more comprehensive utilization and referral data to drive decisions and patients to their affiliated providers. This information asymmetry often translates into the types of discussions you see above. But it doesn’t have to be this way!

    There is a lot of data that a few companies, like Carevoyance (my company, http://www.carevoyance.com) and others have been using to reduce this acute lack of data for smaller providers/practices.

    Do you know where you’re getting your referrals so you can increase them? If you don’t, there is no way for you to compete. But with data on your side, you can quickly optimize your outreach strategy to pick up the most referrals.

    Things are changing, but joining a health system isn’t the only option for entrepreneurial, savvy physicians.

  3. Dr. Melos would do well to enlist 299 other Spartans gastroenterologists, wedge herself firmly between the “hot gates” of the ACS screening guidelines for colonscopies in 50-55 year olds, and the “obamacare” provisions for out-of-pocket costs, and tell those oppressive Byzantine bast### to bring it on!!

    Or, she could relocate to the southeastern United States, where truth, justice, and the American way, as well as fee-for service, still reign supreme, and the evil Athenians have only a foothold.

Leave a Reply

Your email address will not be published. Required fields are marked *