City of Hope, physi­cians at odds over plan

A le­gal duel erupts af­ter man­age­ment pro­poses re­or­ga­niz­ing hos­pi­tal op­er­a­tions.

Los Angeles Times - - Latextra - Pa­trick J. McDonnell

Abruising turf bat­tle that pits City of Hope Na­tional Med­i­cal Cen­ter against the or­ga­ni­za­tion that pro­vides most of its doc­tors has cre­ated a rift at the pres­ti­gious can­cer treat­ment and re­search com­plex north­east of Los An­ge­les.

The con­tro­versy — cen­ter­ing on a re­or­ga­ni­za­tion of hos­pi­tal op­er­a­tions — has yielded du­el­ing law­suits, a doc­tors’ “loss of con­fi­dence” vote against chief ex­ec­u­tive Dr. Michael A. Fried­man and pub­lic pleas for sup­port to law­mak­ers and pa­tients.

Los An­ge­les County Su­per­vi­sor Michael D. Antonovich warned in a let­ter to City of Hope that the rag­ing quar­rel “has es­ca­lated be­yond a sim­ple con­tract ne­go­ti­a­tion and now threat­ens the re­search and pa­tient care upon which so many of us de­pend.”

Fried­man re­sponded that Antonovich’s as­ser­tions “sim­ply do not square with the facts.” In a sub­se­quent let­ter ear­lier this month, Antonovich adopted a more con­cil­ia­tory tone, call­ing on both sides to “step out of the le­gal arena … and get back to the ta­ble to dis­cuss and re­solve the is­sues at hand.” Hos­pi­tal spokes­woman Brenda Maceo said that the ad­min­is­tra­tor has since met with Su­per­vi­sors Zev Yaroslavsky and Don Kn­abe and that both were “very sup­port­ive.”

Other med­i­cal pro­fes­sion­als are watch­ing the dis­pute at the ven­er­a­ble San Gabriel Val­ley in­sti­tu­tion closely as hos­pi­tals na­tion­wide pre­pare for the un­cer­tain­ties brought on by fed­eral health­care re­form.

The con­flict has been sim­mer­ing for nearly a year and has gained in­ten­sity as the doc­tors or­ga­ni­za­tion, the City of Hope Med­i­cal Group, filed suit and sought pub­lic and po­lit­i­cal sup­port for its op­po­si­tion to man­age­ment’s re­or­ga­ni­za­tion pro­posal. It be­gan when City of Hope re­vealed plans to cre­ate a sub­sidiary, a non­profit foun­da­tion to over­see busi­ness mat­ters at its sprawl­ing cam­pus in Duarte.

The re­or­ga­ni­za­tion plan met re­sis­tance from the med­i­cal group, an in­de­pen­dent or­ga­ni­za­tion that pro­vides 90% of the cen­ter’s 184 ac­tive physi­cians un­der a con­tract that ex­pires in Jan­uary. Cal­i­for­nia law bars most hos­pi­tals from hir­ing doc­tors di­rectly, a safe­guard meant to en­sure that physi-

cians, not ad­min­is­tra­tors, have fi­nal say in med­i­cal de­ci­sions.

The group ac­cused hos­pi­tal man­age­ment of mount­ing a “power grab” un­der the guise of re­form. Hos­pi­tal of­fi­cials de­nied physi­cians’ charges that man­age­ment sought to un­der­mine the doc­tor-pa­tient re­la­tion­ship.

Each side con­tends that the other is el­e­vat­ing prof­its above care. At stake are tens of mil­lions of dol­lars in an­nual rev­enue and the fu­ture of City of Hope’s highly re­garded med­i­cal staff. The med­i­cal group, which has worked at the cen­ter since 1977, earns about 80% of its $100 mil­lion in an­nual in­come from pa­tient billings and from teach­ing, ad­min­is­tra­tive and re­search ser­vices at City of Hope. Much of that is now at risk.

Ad­min­is­tra­tors ar­gue that the doc­tors’ group has failed to em­brace the kinds of ef­fi­cien­cies called for in the fed­eral health­care over­haul, such as elim­i­nat­ing du­plica­tive billings.

Un­der the med­i­cal cen­ter’s plan, “costs would go down and the ef­fi­cien­cies would im­prove,” said Dr. Alexan­dra Levine, City of Hope’s chief med­i­cal of­fi­cer. In the re­vamped or­ga­ni­za­tional chart, Levine runs the new doc­tors’ group that will hire physi­cians.

The cur­rent med­i­cal group charges that the pro­posal would put too much power in the hands of hos­pi­tal ad­min­is­tra­tors. Talk about health­care re­form is a smoke­screen for what it terms a hos­tile takeover, the group’s of­fi­cials say.

“We be­lieve the qual­ity and ef­fi­ciency of care will suf­fer as a re­sult of a hos­pi­tal hav­ing too much con­trol,” said Vince Jensen, chief op­er­at­ing of­fi­cer of the doc­tors’ group.

Dr. Lawrence Weiss, pres­i­dent of the group, called the hos­pi­tal’s planned new foun­da­tion “a sham.”

But there is some dis­sen­sion within the doc­tors’ or­ga­ni­za­tion. Three top physi­cians — the head of the surgery depart­ment, the di­rec­tor of the women’s can­cer pro­gram and the chair of the anes­the­si­ol­ogy depart­ment — have filed suit against the med­i­cal group, al­leg­ing that its ac­tions could re­sult in a loss of jobs, grants and re­search posts. The group de­nies the charges and says the dis­sent­ing doc­tors “ap­pear to be act­ing on be­half of man­age­ment,” said Ryan Rau­zon, a spokesman for the doc­tors’ group.

The re­or­ga­ni­za­tion is not the first time City of Hope ad­min­is­tra­tors have been at odds with their doc­tors. The hos­pi­tal has long com­plained that the doc­tors’ group was di­vert­ing pa­tients to its own pri­vate li­censed clinic in South Pasadena.

The med­i­cal group agreed to re­move City of Hope’s name from the clinic but sug­gested that ad­min­is­tra­tors’ real in­ter­est in keep­ing pa­tients on cam­pus was to gain the higher Medi­care pay­ments that go to those treated at li­censed hos­pi­tals.

City of Hope, which is ap­proach­ing its cen­ten­nial year, is one of only 40 com­pre­hen­sive can­cer cen­ters rec­og­nized by the Na­tional Can­cer In­sti­tute. In 2009, City of Hope, in­clud­ing its re­search in­sti­tute, fundrais­ing ac­tiv­i­ties and 217-bed med­i­cal cen­ter, re­ported $889 mil­lion in to­tal rev­enues and a net in­come of $150 mil­lion.

In March, City of Hope’s 24-mem­ber board unan­i­mously ap­proved cre­ation of the new foun­da­tion that is the cen­ter­piece of the re­or­ga­ni­za­tion plan. (Among those vot­ing yes was Eddy W. Harten­stein, pub­lisher of the Los An­ge­les Times.)

City of Hope also de­cided not to re­new the doc­tors’ group’s con­tract when it ex­pires next year. In­stead, hos­pi­tal of­fi­cials say they plan to bring back in­di­vid­ual physi­cians un­der the um­brella of the group run by Levine, the cen­ter’s top med­i­cal of­fi­cer. Af­ter the plan was an­nounced, re­la­tions be­tween the two sides quickly wors­ened and both went to court.

In a let­ter to al­most 30,000 City of Hope pa­tients, the doc­tors’ group warned in April that ad­min­is­tra­tors sought to shift de­ci­sion­mak­ing from physi­cians to non-physi­cians.

City of Hope ad­min­is­tra­tors de­nounced the mis­sive as a “de­spi­ca­ble” scare tac­tic and ac­cused the doc­tors’ group of “us­ing sick pa­tients as pawns” in a bid to per­pet­u­ate a “mo­nop­oly” on ser­vices. The med­i­cal group ac­cused City of Hope of il­le­gally so­lic­it­ing its mem­bers to join the new physi­cians’ group run by Levine, a charge de­nied by ad­min­is­tra­tors.

Ef­forts to craft a leg­isla­tive so­lu­tion to the dis­pute in Sacra­mento failed, even though both sides re­tained high-pow­ered po­lit­i­cal op­er­a­tives.

At a court hear­ing Tues­day, Los An­ge­les County Su­pe­rior Court Judge Mary Stro­bel di­rected both sides to set­tle­ment talks next week. A hear­ing is set for Oct. 13 on the doc­tors’ group pe­ti­tion for an in­junc­tion against the hos­pi­tal.

Even in the of­ten-ac­ri­mo­nious health­care busi­ness, ob­servers said, the de­gree of caus­tic rhetoric swirling around such a prom­i­nent in­sti­tu­tion was un­usual.

In the era of health­care re­form, “there’s go­ing to be an at­tempt by hos­pi­tals to de­velop new en­ti­ties that al­low them to have more flex­i­bil­ity and get con­trol over more fed­eral Medi­care money,” said Glenn Mel­nick, a health fi­nance ex­pert at USC.

“I think what’s hap­pen­ing at City of Hope could be a harbinger of things to come.”

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