Clinics object to bill that would let hospitals hire doctors

Written by CA Political News on February 08, 2010, 11:59 AM

Clinics object to bill that would let hospitals hire doctors


By E.J. Schultz, Fresno Bee,  2/8/10

SACRAMENTO -- Community health clinics and rural hospitals in the Valley both struggle to attract doctors -- but they are on opposite sides of legislation that seeks to fix the problem.

Senate Bill 726 would relax the state's ban on the direct hiring of doctors by hospitals, greatly expanding a pilot program that started in 2004.

The bill is supported by health districts such as Kaweah Delta Medical Center in Visalia, where a top official says the change is needed to help recruit doctors seeking the security of regular paychecks.

Today, most doctors are independent and negotiate hospital privileges.

"Physicians are just not trained to be business people," said Steve Jacobs, who recruits doctors for Kaweah. "So it becomes very burdensome if you don't have a business mind."

But the bill is opposed by a network of clinics that enjoy an exemption to the hiring ban.

The Central Valley Health Network fears it would lose staff if nearby hospitals could hire doctors. The network's doctor shortage is "so dire that [we] don't want to make it worse," said David Quackenbush, chief executive officer of the network, a consortium of 13 federally qualified health centers.

California's doctor hiring restrictions are rooted in a ban on the "corporate practice of medicine," which seeks to preserve physician autonomy.

The concept evolved from concerns in the early 20th century that doctors hired by mining companies would face conflicts between corporate and patient needs, according to legislative analysis.

Over the years, exemptions were given to organizations including teaching hospitals and medical corporations -- such as a surgical group -- that are owned and governed by a physician majority.

Low-income community clinics won the right under a 1975 state attorney general legal opinion. Kaiser Permanente, the large nonprofit health organization, has regional partnerships of doctors that serve its hospitals.

But California remains one of only five states that still generally prohibits hiring by hospitals, according to legislative analysis.

The Legislature in 2003 created a pilot program allowing health care districts in counties with populations under 750,000 to hire a total of 20 physicians statewide, as long as the district served a high percentage of Medi-Cal patients and was struggling financially.

The program will expire at the end of this year.

Hospitals began pushing for an expansion of the program last year but ran into resistance from the California Medical Association, a doctors organization that closely guards physician autonomy.

"We just don't want the financial pressure of a hospital trying to fill beds or meeting the bottom line to be something that is driving decisions about the patient," association spokesman Andrew LaMar said.

SB 726 supporters point to a 2004 state law that strengthened the independence of hospital medical staff, giving them more control over patient-care rules.

"The law is very clear that only doctors can comment on [a] doctor's practice behaviors," said Tom Peterson, a lobbyist for the Association of California Health Care Districts, which is sponsoring SB 726.

The bill, by Sen. Roy Ashburn, R-Bakersfield, seeks a compromise by allowing 52 districts in medically underserved areas to hire up to five doctors each. The bill would cover eight districts that operate hospitals in Fresno, Tulare, Kings and Mariposa counties.

The legislation also would cover most privately run rural hospitals, including three Valley hospitals run by Adventist Health.

The California Hospital Association is pushing a separate bill, AB 648, that would allow rural hospitals to hire up to 10 doctors each.

The Valley's doctor shortage has persisted for years.

There are 173 doctors per 100,000 residents, lowest of any region in the state, according to a 2006 study by the Central Valley Health Policy Institute.

Hospitals in the region have trouble attracting doctors because the Valley lacks the appeal of more urban areas, and many residents struggle to pay for care, Jacobs said.

Kaweah Delta Medical Center is short two orthopedic surgeons, two gastroenterologists, two general surgeons, one anesthesiologist and "the list goes on and on," Jacobs said.

The hospital offers doctors who move to the area a loan to get started that is forgiven over time as they build their practice. But Jacobs said many doctors would prefer to work directly for the hospital and "move right into a ready-made practice."

Quackenbush countered that community clinics deserve the exclusive right to hire doctors because they are the provider of last resort, serving the uninsured.

"We need more professionals," he said. "The demand has grown."

Meantime, the California Medical Association argues that direct hiring won't solve the shortage.

A better approach, the association says, is to improve Medi-Cal reimbursement rates, build new medical schools in underserved areas and repay the medical school loans of doctors who move to rural areas.

"The real remedy" is "to get more doctors in the pipeline and create incentives to work in rural areas," Dr. Luther Cobb, a member of the medical association's executive committee, wrote in a recent column in The Sacramento Bee.

The Medical Board of California, in a review of the doctor hiring pilot program, said it still supports the ban on corporate practice of medicine.

But the board urged an extension of the pilot "so that a better evaluation of the direct employment of physicians can be made."