by Dawn J. Lipthrott

Summary of some of the integrated delivery system issues:
In their rush to capture more market share and revenue, hospitals set up systems and networks, sometimes unknown to the general public, that negatively impact the practices of independent physicians and create inherent secondary interest. There are laws designed to protect patients from even unconscious influence of secondary interests:
a) the Stark laws which prohibit physicians from referring to facilities or services in which they have a financial interest (self-referral);
b) kickback laws which prohibit the payment through money or benefits for the purpose of obtaining referrals; and c) antitrust laws which prohibit companies from essentially taking over a market and reducing competition.
There are also laws related to fair competition. Adventist Health and other systems like it appear to have found ways to meet an 'exception' through technically employing their own physicians which then allows self-referral. Even if these systems most likely follow the letter of the law, to me it seems that the intent of these laws is still not honored. And this is even more of an issue when patients don't even know they are IN the system, as discussed below in Part 1.

Diminishing indendent competition and funneling patients through its own expansive system is made to sound as though it is for patient benefit when it is very often to gain more market share and revenue. And that raises both the ethical and legal question not only of what is in the best interest of the patient, but also of what is fair or unfair competition? Where does it cross the line from seeking increased business and income to anti-competitive strategies and behavior?

In my opinion, unless patients and physicians become aware and speak out together about the effects of these large systems, there is a real danger that patient choice will be diminished even more than it is now. In these systems, money is wasted in duplicated services that are not needed, sometimes in excessive salary and benefits. Costs in any business are paid for by customers -- in this case patients and insurance companies and independent physicians. The historic approach to cost control is raise prices to consumers and cut payment to physicians and vendors of goods and servies. That is part of what has contributed to an unsustainable system.

Part 1: Intentionally Disguising the System's Physician Network

Many Parts, Many Names, One Big System:
Everyone in Central Florida knows Florida Hospital. They have 7 hospitals spread around the Orlando tri-county area and more in surrounding counties. Most people also know Florida Hospital is connected to the 7th Day Adventist Church. Florida Hospital is under the umbrella organization, Adventist Health-Sunbelt, which has even more hospitals in Florida, Georgia, Kentucky, North Carolina, Tennessee, Kansas, Colorado, Illinois, Texas and Wisconsin. Another part of the Adventist organization also has hospitals in California, Hawaii, Oregon, and Washington.

The Central Florida Adventist system owns rehabilition centers, labs, home health care service agencies, and mammogram and imaging centers and urgent care centers.

Perhaps least known is the fact that Adventist Health employs or owns physician practices -- not just those who work at the hospitals -- but practices located throughout the community with generic sounding names like Loch Haven Ob/Gyn, Surgical Specialists of Florida, Park Avenue Internal Medicine, Mid-Florida Ob-gyn and some simply have the physician's own name. Although each of the 90 plus offices have their own individual names, they are part of one 'multi-specialty group'. Some physicians are employed directly by Adventist Health and some practices are employed through a wholly owned Adventist subsidiary, Florida Physicians Medical Group (FPMG). FPMG, the multi-specialty group, employs 200 plus physicians in the tri-county metro Orlando area spread out in approximately 90 practice locations. (They also have other practices in Lake, Volusia and Pasco counties.) Most of the physicians are recruited from out of state, sometimes just out of residency which makes it a good opportunity for new physicians to get set up in practice. FPMG also buys out local physician practices or in some situations squeezes them so much that in order to continue to practicing, the physician or group has no choice but to join FPMG. This has happened most recently with Florida Radiology Associates who either had to join FPMG and be owned by Adventist Health, or not have work in the Orlando area.

By owning primary care physicians, who are the gateway to specialists and other services, Adventist Health and similar systems create a funnel system through which patients enter the system and then can be referred to in-network specialists and services , usually without the patient even realizing it they are seeing Adventist employed physicians. Hypothetical example: A woman goes to Dr. Z, not realizing he or she is part of a system owned practice. That doctor refers her to system owned radiologists or ob-gyn, who subsequently refers her to the system owned breast surgeon . After her procedure is done at system owned facility like Winter Park Hospital, the woman is referred back to system owned radiation and possibly to a system owned oncologist for chemotherapy. That is clearly good for the system. It captures revenue and market share, keeping patients within the system.

This potential is concerning because it would inherently create a corporate secondary interest for the physicians if there is ANY expectation to refer in-network. I don't at all think most physicians would be consciously unethical. However, the system itself creates a context of secondary corporate interest by the very nature of the system structure. In many cases employed physicians' salary, malpractice insurance, office, staff, productivity bonuses and numerous other benefits are dependent on their continued approval by the parent system like Adventist Health. Because most physicians (even those joining an independent practice) usually have to sign a non-compete agreement as a condition of employment, this also means that if they want to leave this arrangement, or are fired by FPMG/Adventist Health, they would likely have to leave the Orlando area in order to practice medicine.

An entirely different example of how such systems expect 'loyalty' to their system is in physician profiling. I don't know if in the Adventist Health system if it is aimed at independent physicians or employed physicians or both. But profiles are kept on each physician that track their referrals to the system, their volume of procedures and whether they ever refer patients to services out of the system. In that case they are known as 'splitters'. This profiling determines the loyalty level of the physician. Physician liasions are employed to visit physicians regularly and part of their job is to help maintain or increase complete loyalty to the system.

Deliberate corporate choice to NOT reveal that they are part of the system:

Adventist Health and FPMG has chosen to not reveal that physician network and it's ownership by Adventist Health to the public. Let me say that there ARE at least a few physicians in the network who do let their patients know, but that is not the general approach of the 200 plus employed physicians. Although Adventist Health calls FPMG practices a 'multi-specialty group', most large group practices that have multiple locations, consistently use one name so that patients know they are going to the same group in a different location. Adventist Health/FPMG physicians most often do not put anything on their letterhead, practice brochures, or websites that would tell patients they are owned by Adventist Health. Why? I don't know, although I have my own ideas about it. One of my own conclusions is that if patients knew up front that a physician was part of Adventist Health, some would not go to them, and even more would question whether specific referrals to Adventist physicians or services were the best referrals for them. I certainly would question it and do my own research about who the absolute best physician for my situation is. In past situations I always like the fact that if I was referred from one doctor to a specialist, both were independent and gave me two independent opinions, and sometimes a third opinion if imaging or testing was required.

Because FPMG/Adventist Health uses generic names, and sometimes the physician's name, the average patient would assume they are independent physician practices (For a list of physicians and practice names in the Orlando tri-county area that are part of the Orlando tri-county Adventist Health/FPMG, click here. The list also has a few suggestions about what you as a patient can ask to help you get the information you need to make an informed choice!)

Adventist Health/FPMG also actively markets some of these practices through newspaper and magazine ads and again takes care to not reveal they are part of the Adventist Health system. It appears that this is done by the corporate office level, NOT by the individual physician being advertised. Here are just two newspaper/magazine ads that show how Adventist Health intentionally leads people into thinking these are independent practices like any other when in fact they are part of FPMG.

(Note: I believe that these ads are created and placed by Adventist owned Florida Physicians Medical Group, FPMG, NOT by the individual doctors) This is not meant in any way to target these particular physicians. I truly doubt the physicians did any of the advertising -- they are just recent example that appeared in local papers or magazines that show how corporate Adventist Health/ FPMG leads people to believe their physicians are independent like any other local physician ):

Why Does This Matter?
To me it is disturbing that patients are deliberately kept in the dark about the fact all those practices are part of the Adventist system. Transparency is essential in the complex system of healthcare today. It bothers me that patients can be and are steered to Adventist owned/employed surgeons, other physicians, and services without realizing it (see Part 2 on Patient Steering). It bothers me that part of corporate strategy is to bypass non-Adventist employed physicians. This harms both independent physicians and patients.(see Part 3 on Harms to Physicians and Patients will discuss this in more detail. ) And it bothers me that this does not even seem to raise an ethical question at all for the system itself!

1. It matters first and foremost because any corporate policy or expectation of in-system referrals are made at least partially based on corporate goals, rather than on what is truly best for the patient. (Update: Someone commented on the blog that FPMG physicians do have the freedom to refer outside the network. I don't know how the commenter knows, or whether that is consistent in the system, or if there are only certain cirucumstances in which that can happen. That is in contrast to what have heard in the past from more than one person related to healthcare that there is a real expectation by FPMG/Adventist Health that referrals are kept inside. I will say more about this is Part 2 on Patient Steering.)

A very recent example of in-system referrals (not from a physician) :
While recently writing a report on this issue for physicians, I called the physician referral line that you can easily find on the Florida Hospital website pages where ALL physicians with staff privileges at Florida Hospital are listed. I called and said that I needed a referral for a breast surgeon because I had a breast lump. I was asked my zip code and they made sure I had insurance. Then I was given the name of a general surgeon at Surgical Specialists of Florida (owned by Adventist Health and part of their residency practice). I was given an alternative name of a general surgeon in Winter Park, who just happened to be an Adventist/FPMG employed surgeon. When I asked specifically for a female breast surgeon, I was given 2 more names in Surgical Specialists and another FPMG breast surgeon. Out of FIVE names given, not ONE was an independent surgeon even though in the same building as the residency practice is one of the most reputable independent breast surgeons in Orlando and at least one other surgeon who has been part of the original 'breast care team' of independent surgeons for the hospital. One block from the Winter Park surgeon I was given is another well-known independent female breast surgeon. In between are other male surgeons who were/are part of the original 'breast care team' of independent surgeons. Some of these independent surgeons who specialize in breast care, are more experienced than the referrals I was given and are known in this area for top quality care. The hospital's referrals to Adventist/FPMG surgeons without including an equal number of those independent breast surgeons illustrate what I mean by referring for Adventist Health's best corporate interest rather than mine as a potential patient. While this was not a physician referring, it is still another indication of system policies.

2. Trustworthiness is essential in healthcare. Patients entrust their lives to medical professionals and hospital systems. To me, the corporation's way of doing business, violates patient trust and makes them even more vulnerable. What if I had really needed and wanted the best surgeon for my situation? I would have missed out on even having the option to some of the best breast surgeons in the Orlando area. Most patients would trust that a hospital referral line would try to give them the very best surgeons with staff privileges at their hospital for the patient's need, not because they are physicians employed by the system. This trust is perhaps even more true for non-profit hospitals owned by religious organizations. That fact leads many people, including me, to assume, correctly or incorrectly, that they are trustworthy because of the values they claim to represent. Personally, I no longer trust that.

3. Not letting patients know that a physician or practice is employed by the larger system, takes away some of patient's autonomy and informed choice. The 'choice' to use an Adventist surgeon was essentially made for me by the referral service when no independent options are given equally and when I likely wouldn't know that they all are indeed employed by Adventist Health. Whether through the referral line or a physician referring me, without that knowledge and option of independent physicians, I could not ask my own questions about what was truly in my own best interest. I strongly believe the patient has the right to know who employs or owns their physician.

4. Bypassing independent physicians threatens current and future independent physicians ability to maintain their practices. As you will see, this type of patient steering also reduces the financial viability of maintaining an independent practices of the excellent physicians we already do have. Included in my concern about private practice is that I think new independent physicians will never be able to set up and sustain a new practice that can effectively compete with the system of Adventist practices and their steering of patients to those practice. How will we even have independent practices in the future? How can they realistically compete over time, especially when the system continues expanding? Will that make Orlando an undesirable place for new independent physicians to come to establish a practice?

5. Lack of transparency and failure to offer independent options violates ethical principles. The AMA, recognizing the ethical challenges of even indirect expectations of in-network referring integrated delivery systems, commissioned an analysis that specifically address the concern about ethical issues and patient choice in such systems. They state:

"If there is a direct or indirect expectation of referrals only within the system, a physician should seek clarification or change, allowing the physician to refer outside of the system when it serves the best interest of the patient and should inform the patient of any restrictions on referrals." They go on to suggest that patients not only be told, but also that they be given an independent option outside the self-referring network. (Possible Anti-Competitive and Ethical Implications of Integrated Hospital System Referral Expectations )

William G. Plested III, MD, then president of the American Medical Association testified:

"The AMA is very concerned about efforts by hospitals and health systems to control physician referrals as they pose a number of significant concerns. By dictating to whom physicians may refer, the hospital governing body or administration takes medical decision-making away from physicians. This introduces financial concerns into the patient-physician relationship and can run counter to what the physician believes is in the best interest of the patient. These hospital self-referral practices also limit patient choice.
To reduce this interference in the patient-physician relationship, the AMA believes that disclosure requirements for physician self-referral, where applicable, should also apply to hospitals and integrated delivery systems that own medical practices, contract with grouppractices or faculty practice plans, or adopt policies requiring members of the medical staff to utilize their facilities and services." ( Statement of the American Medical Association to the Senate Sub-Committee on Finance, p. 10 )

The AMA Code of Ethics states: "There are no restrictions on advertising by physicians except those that can be specifically justified to protect the public from deceptive practices . . .A physician may publicize him or herself . . .provided that the communication shall not be misleading because of the omission of necessary material information, shall not contain any false or misleading statement, or shall not otherwise operate to deceive." The American College of Surgeons Code of Ethics states: "Advertising must be truthful, both in terms of what is said and in what is not said." Clearly I am not an attorney, but it sounds pretty clear to me. The Federal Trade Commission gives the following criteria for what is 'material information': "The basic question is whether the act or practice is likely to affect the consumer's conduct or decision with regard to a product or service. " Maybe all this would not bother someone else, but knowing whether or not a physician is employed by a larger hospital system would both raise questions for me and likely affect my decision -- and even more so when, for whatever reason, that fact is not revealed.

6. I think the lack of transparency compromises the integrity of Adventist Health itself. They claim to be guided by values of integrity and transparency. Yet, their actions are not in alignment with those values of transparency.

The idea of this kind of "integrated delivery system" is being touted in the healthcare world as the direction of the future, which is why it raises even more concerns about ethical questions and the negative impact on indendent physicians and the potential negative effects for patients as shown in Part 3 of this series. Integrated delivery is often presented as benefitting patients and saving money, but the benefit is primarily to corporate healthcare. People are hysterical about the thought of government taking over their healthcare, but expanding corporations like Adventist Health ARE taking over healthcare as we have known it. Maybe THAT is part of what is need of reform!

Part 2: The Power of Patient Steering by a Large System

Part 3: Negative Impacts on Physicians and Patients

Part 4: Community Need vs. Capturing Market Share and Revenue

Overview: Ethical Issues in Hospital Based Integrated Delivery Systems