The demise of doctor-owned medicine?


When I joined The Everett Clinic forty-two years ago, we were thirty-some physicians. The main campus consisted of what’s now called the Founders’ Building and a couple of parking lots. The building was industrial and off-putting, guiding patients to various locations by way of colored stripes on the floor. TEC had just opened its first satellite office in Marysville and had negotiated an exclusive contract with a now-defunct health insurance provider.

The Clinic’s manager, a legend among medical executives nationwide, had seen the future: to survive, we had to grow, build more satellites, and hire lots more primary care docs. Now there are around 600 care providers and over 15 satellite locations. Back then, because of that insurance contract and the Marysville opening, relations between non-clinic docs and Clinic docs were prickly. Outside the Clinic, my arrival wasn’t greeted warmly. Those were unpleasant, tricky times. Non-clinic docs eventually formed a “clinic without walls,” The Western Washington Medical Group,” which soon bedded down with the Sisters of Providence. That made it awkward for those of us who admitted patients there, an underwriter of the competition.

Happily, over time, it became apparent that there was room for both kinds of practices. No one put anyone out of business, nor had they intended to. Everyone gets along fine, now, mostly. Once a month, we all met in the basement to conduct business. Early on, Clinic partners voted on all expenditures over ten thousand dollars (if memory serves). Then it became a hundred thousand. Eventually, a million. Subcontracting all lab and imaging services at the time, it was a tough sell even to approve purchasing blood testing equipment. Then X-ray machines. Scanners. The cost of building the adjacent Gunderson Building and multi-level parking garage blew minds.

Creating our outpatient surgical center, in the planning of which I partook heavily, caused apoplexy among non-surgeons, who saw it as a huge risk. It wasn’t. Patients loved it and still do. As insisted upon by some of us, its commitment to comfort for patients and families, by way of commodious and welcoming, non-industrial surroundings, changed the culture of the Clinic at large. No more cold and bland warehousing. The Clinic made news when, at another attempt by a large insurer to cut reimbursement, we refused to accept. Sent notices to affected patients, of which there were many thousands, that we’d arrange alternative coverage.

Because we’d become large enough and because our reputation for excellence was fact-based, the insurer backed off when faced with losing so many customers. Nationwide, it was the first incident of its kind. That was then. Offers to sell to investors weren’t rare. Believing we could survive as a doctor-owned, self-managed group as long as we provided excellent care and were large enough to hold the line, we always said no. Why sell out and lose control?

Why, indeed? When DaVita, which had recently paid millions in fines for Medicare fraud, made an offer, it wasn’t refused. Of the reasons given, the million-dollar windfall (so I’ve heard) to every partner might have played a role. By then, I was retired, not part of the decision on which I’d have voted no. Although many retirees got in on the (alleged) spoils, those who’d bailed more than fifteen years prior, which included not only me (though I’d returned, at their request, for several more years as a contractor) but some who’d worked there much longer than I and had contributed immeasurably to the success of the Clinic. It hurt. But that’s a story for another time.

It wasn’t long before DaVita sold the Clinic. For-profit, one assumes, with no say from its members because they no longer had any. Optum is the new owner, and that’s now the official moniker. In name, at least, The Everett Clinic is no more. In conversations, many docs regret selling out; particularly those there in the before times. Especially primary care docs. Under pressure for efficiency (profit) above all, there’s frustration, leading to turnover. And that’s the point: unless we get to universal coverage, the profit-first consolidation of American health care into a few giant corporations will likely make things worse. America’s largest health insurer, United Health Care, owns Optum, which raises interesting questions. In any case, the ability of physicians to practice outside the corporate world is coming to an end.

In my opinion, the more dedicated physicians are to excellence, the less happy they’ll be. I considered medicine a calling, an overarching commitment, not a business. Constantly squeezed to cut costs, limit care, and increase profits, will prospective docs still see it that way? Treat it as just a job? Not the optimum outcome. 2024 is the hundredth anniversary of its founding. My wife and I remain Everett Clinic patients. I’ll still call it that. The doctors we see and the care they provide are superlative. Four have recently left or are leaving soon.

Sid Schwab is a retired surgeon who blogs at Surgeonsblog and is the author of Cutting Remarks: Insights and Recollections of a Surgeon.


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