The Future Physician

May 2009 Volume 1, Issue 3

The Newsletter of the Medicine and Business Association at BU School of Medicine

Jordan Neviackas, MS1, “Hospital Employment of Physicians”

T H I S

E D I T I O N

Nathan Calloway & Hilal AbuZahra, MS1, “Understanding Medical Malpractice Insurance”

Dr. Abdulmaged Traish, PhD, MBA, ”How Residency Programs Perceive MD/MBAs”

Naveen Reddy, MS4, “Explaining Your MD/MBA Dual Degree to Residencies”

Hospital Employment of Physicians – Where Will You Be Practicing in 2015? Responding to an impending shortage of physicians, medical schools are increasing enrollment 21% by 2012. At least twelve new medical schools are under development or in discussion. But in 10 or 15 years, in what types of settings will these new physicians be practicing? Namely, how many will forgo solo and group practice to become hospital employees? Hospital employment of physicians is on the rise – not just of generalist physicians, but of specialists as well. Why is this shift taking place? How will it affect us as future physicians? More importantly, how will it affect patient care?

Kari-Claudia Allen, MS1, “Political Advocacy: What Medical Students Can Do”

Employment relieves the headaches of management, such as dealing with staff, administration, operations, etc. Furthermore, because of their larger market size, hospitals are in a better position to bargain with insurers to achieve better reimbursement rates than physicians could achieve on their own. The downside to this arrangement is that physicians lose some of their autonomy to hospital/large group management.

Hospital Motivations In the early 1990’s, hospitals began acquiring private practices (mainly primary care practices) in an attempt to control and Physician Motivations expand their market share. (By owning For the physician, private practice costs - for primary care practices, hospitals hoped to instance malpractice insurance premiums capture primary care physician referrals to continue to rise at a higher rate than specialists, keeping them within the hospital reimbursement. When these practices were system). This first wave of acquisitions profitable, the challenges of small-business stalled when hospitals found they were ownership were financially rewarded. Now, in hemorrhaging money on these investments. order to maintain previous income levels in the Now, years later, the trend has resumed face of costly overhead, solo & small group as hospitals face a looming physician practitioners are forced to extend their hours shortage, and seek to secure primary & as well as see more patients per hour. specialty coverage. Hospitals have learned Ultimately, these practitioners are forced to from their previous mistakes: while they decrease the amount of time they spend with may lose money in the short term on each each patient, which undermines the intimate physician they employ, with increased physician-patient relationship and could productivity (by giving physicians incentives) potentially compromise care quality. and by generating referrals, hospitals can Rather than face these challenges, many see huge financial gains from physician young physicians enjoy the idea of having a employment. steady income and working more predictable Emerging Job Market hours in a shift-type setting, rather than taking Physicians of all specialties are being on the challenges of running a small practice. sought by hospitals.

Contributed by Jordan Neviackas, MS1 Figure #1: Growth in Number of Hospitalists

In Thousands

Number of Hospitalists

I N S I D E

30 25 20 15

329% Increase in ~10 Years!

10 5 0

2001

2010 (Projected)

The “hospitalist” was the first employed physician model to emerge around the mid 1990s; their numbers continue to expand at an incredible rate (Figure 1 above). Hospitalists focus on inpatient care, allowing community-based primary care physicians to spend more time in their offices without having to disrupt their schedules to round on hospitalized patients. Some early research shows that when hospitalists treat patients, patient length of stay and number of tests ordered are considerably reduced. This is important considering that many payments to hospitals are now “bundled” (the hospital is paid a lump-sum for a visit or procedure, not on a fee-for-service basis; fewer tests and lower length of stay mean less costs and higher profit margin). Article Continued on Page 4

Dear Reader, thank you for actively reading The Future Physician, the official newsletter of the BUSM Medicine & Business Association. We expect to bring you many fresh, interesting Issues in the upcoming 2009-2010 Academic Year. Have a great Summer, and see you in the Fall!

May 2009 | The Future Physician Commentary: How Residency Programs Perceive MD/MBAs – Will a MBA Hurt or Help My Chances for Successful Residency Placement?

Students may wonder whether a Master’s of Business Administration (MBA) combined with a MD degree will help or hurt their chances of getting into a top residency program. Unfortunately, some believe that the MD/MBA dual degree will portray them as being more interested in business than patient care. However, this is truly an unfounded fear. Practicing physicians understand the importance of approaching medicine with a global perspective, and understand that our healthcare system is affected by external influences such as economic, legislative, legal, and administrative constraints. The terrain of health care is rapidly changing, necessitating the acquisition of skills in both the clinical and in the business and management fields to provide efficient and effective delivery of care.

Contributed by Dr. Abdulmaged Traish, PhD, MBA

There is a misperception that clinicians who are successful in clinical practice can easily transfer such success to positions of great responsibility including the management of a division, department or organization. In fact, physicians with a degree in business are better able to approach medicine in a more comprehensive manner, applying principles of managerial science to enhance the delivery and improve the quality of health care through innovative organizational design and improved clinical decision-making skills. A MD/MBA degree provides the necessary training to acquire these skills. For many, this dual degree program has provided both the tools and the opportunities to take on greater

responsibility and roles of leadership. The growth of MD/MBA programs and applicants suggests that individuals with this dual skill set are well equipped to adapt to the many external forces influencing the practice of medicine, and are being sought after to fill leadership roles throughout the health care sector. In my opinion, residency program directors would look at MD/MBA applicants with this in mind, as they understand these candidates possess unique skills that will enable them to become leaders with broad visions contributing immensely to both patient care and the advancement of medicine.

Dr. Traish is a Professor in the Departments of Biochemistry and Urology, and Director of the Sexual Medicine Research Laboratory. He received his PhD from the BU School of Medicine, and his MBA from the BU School of Management. Dr. Traish is an active researcher, academic advisor, and lecturer in the School of Medicine for both medical and graduate students.

Useful References to MD/MBA Programs & Effect on Physician Careers in Peer-Reviewed Literature (Courtesy of Dr. Traish) Larson DB, Chandler M and Forman HP. MD/MBA programs in the United States: Evidence of a change in health care leadership. Academic Medicine 2003; 78: 335-341. Parekh SG & Singh B. An MBA: The utility and effect on physician’s careers. Journal of Joint & Bone Surgery (American) 2007; 89:442-447.

Commentary: Explaining Your MD/MBA Dual Degree at Residency Interviews – What To Expect

Contributed by Naveen Reddy, MS4

As a graduating MD/MBA student who will be starting residency in June, one of the questions that I am asked most often by students is how the residency programs I interviewed at viewed the dual degree. The simple answer is that it was almost universally viewed as an asset rather than a liability. However, the full answer is a little more complex than that. Before delving further into the issue, though, it is important to look at the history of medical students obtaining MBA’s to gain a better perspective on the topic. The question of whether a MBA is an asset or a liability was first raised in the 1990’s when more and more medical students were obtaining the degree. At the time, there was a growing backlash in the medical community against business interests, as complaints about profit-minded HMOs mounted. Furthermore, physicians still felt they were able to manage the business of medicine with relatively little effort, as even poorly run practices were profitable. However, health care has changed tremendously with the rising cost of care and the increasing number of uninsured patients. Even though physicians in academic settings are somewhat more insulated from economic pressures than those in private practice, they know the importance of running a hospital or health care organization as a business, as that is simply the reality of the world we live in. Having said that, any student who pursues a MBA before residency should be prepared to answer certain questions about the degree. Every interview I had started off with a question about my MBA degree, but I cannot remember anybody being critical of it. Most of the people seemed to be interested in it, and several expressed that they would like to get a MBA so they would have a better understanding of how “the system” works. In fact, 4 of the physicians I interviewed with already had obtained a MBA. Essentially, as a MD/MBA, you should expect to be asked three basic questions on the interview trail. Why did you get a MBA? What do you plan to do with it? And, how has it changed your perspective on health care? If you are able to answer these questions clearly without hesitation, the degree will be an asset to your application rather than a liability when the time comes for residency interviews. Naveen Reddy is a MD/MBA candidate from the Boston University School of Medicine and Boston University School of Management, due to graduate in the Spring of this year. Naveen has successfully leveraged his MBA degree to engage in a number of performance improvement, business consulting,, and entrepreneurial activities. He will begin his Internal Medicine Residency at Boston Medical Center in June of 2009.

For more information about applying to BU’s MD/MBA Program, please contact Dr. N. Stephen Ober (sober@bu.edu), Director of the MD/MBA Dual Degree Program, or Professor Mark Allan (mallan@bu.edu), Faculty Director of the Health Sector Management Program at the BU School of Management.

The Future Physician | May 2009 Understanding Medical Malpractice Insurance – A Primer for the Future Physician

 Duty requires that the physician have a professional relationship with the patient.  Dereliction, Damage, and Direct [Causation] require that: (1) a deviation from standard of care occurred; (2) that the patient was harmed in some way; (3) that the deviation from care was the proximate cause of the patient’s damages. To protect themselves against medical malpractice litigation, physicians purchase “medical liability insurance coverage” from a licensed carrier. Medical liability coverage, or medical malpractice insurance, offers physicians two sets of resources: legal counsel and financial protection. Essentially, when a physician purchases insurance from a carrier, that insurance carrier must provide legal counsel to the physician if he or she is faced with a lawsuit. If the physician is found liable, the carrier must pay all settlement/judgment awards up to a pre-determined policy limit. Policies come in several formats, designed to match the needs of the

Table 1: Geographic Variation in Medical Malpractice Insurance Premiums

Specialty

Though the issue of medical malpractice plagues the minds of practicing physicians, it is not necessarily on the minds of physicians- in-training. As future physicians, however, we will all eventually encounter medical malpractice in one form or another, and should be familiar with the terms and principles of medical liability & litigation. Medical malpractice is defined as, “professional negligence, by act or omission, by a health care provider, doctor, nurse, or hospital in which the care provided deviates from accepted standards and causes injury or death to the patient.” This kind of negligence can take many forms, for example, surgical removal of the wrong limb or failure to diagnose a heart attack. Though the most publicized end result of malpractice is a lawsuit, the fact is that most lawsuits are not successful at trial. The most recent data (2003) shows that the vast majority of malpractice claims were dropped (~70%) and approximately 25% were settled out of court. Only less than 1% won at trial. While physicians can be sued for any reason, certain elements must be present for a lawsuit to be successful. These elements are commonly referred to as the “Four D’s”: Duty, Dereliction, Damages, and Direct [Causation]:

Contributed by Nathan Calloway & Hilal AbuZahra, MS1

Metropolitan Area Los Angeles CA

Long Island, NY

Wayne County, MI

Internal Medicine

$14,556

$20,617

$31,152

$65,897

Anesthesiology

$14,556

$21,110

$32,201

$67,693

Orthopedic Surgery

$48,624

$109,934

$94,356

$203,888

physician. The six common forms of medical liability insurance coverage are explained in the Sidebar (below). Insurance carriers vary by region, and many are physician-owned. The Doctor’s Company, a physician-owned national liability carrier, covers 43,000 physicians and surgeons. ProMutual Group is a large carrier in the New England region. Premium amounts vary by physician specialty, based on each specialty’s exposure to “risk.” Risk is an ambiguous term: it can include factors such as physician age and types of procedures commonly performed. However, the basic variation in premiums among specialties is just as great as the geographic variation in a single specialty (see Table 1 above). The 2008 Medical Liability Monitor survey shows that while most premium increases are starting to level off, they remain at or near historically high levels. Further, since 2000, there has been persistent geographic variation in

Dade County, FL

premiums. For example, from 2000 to 2006, the average OB/GYN premium in Los Angeles rose 20% to $63,272. In contrast, in the same 6 years, the average OB/GYN premium in Philadelphia rose 286% to $145,131. Efforts at reducing medical liability premiums include tort (i.e. civil law) reform. Legislation aimed at capping the amount of non-economic damages has been shown to reduce premiums for some physicians, though this effect is still controversial. Other efforts include making physician apologies inadmissible in court, creating pre-trial screening panels to reduce frivolous lawsuits, requiring arbitration of cases, and enacting statutes of limitations. Though medical malpractice remains a scary specter for many physicians, there are ways to avoid lawsuits and protect against damages. Purchasing malpractice coverage, ensuring good communication with patients, and providing quality care are all effective ways of reducing liability risks.

Sidebar: Types of Medical Malpractice Coverage Self-Insurance – In place of professional liability insurance, the provider pays losses associated with medical malpractice claims against the institution or its physicians. Occurrence: The physician is covered for any incident that occurs during the term of the policy, regardless of when a claim arising from the incident is made. Claims-Made – Provides coverage for claims arising from incidents that occur and are reported to the insurance company while the policy is in force. A claims-made policy may be cheaper in the first years of coverage, but at maturity (~5 years), the rates often increase and become comparable in price to occurrence policies. Claims-Paid – A variant of claims-made insurance, this insurance provides coverage for claims arising from incidents that occur while the policy is in force. However, claims must be reported and paid before the policy is terminated. Tail Coverage – Providers supplemental coverage for claims filed against physicians after the term date of a claims-paid policy. Sometimes referred to as an extended reporting endorsement, tail coverage is necessary whenever a physician insured under a claims-made policy changes carriers, becomes disabled, retires, or dies. Nose Coverage – Supplemental to a claims-made policy; provides coverage for previous acts or incidents that may have occurred but have not yet been filed as claims. This is prior to the physician securing a relationship with the insurance carrier.

May 2009 | The Future Physician Hospital Employment of Physicians (continued) Surgical hospitalists (also called surgicalists) are usually general surgeons who spend a week at a time exclusively providing surgical care for emergency department (ED) patients, to improve surgical consult times and reduce ED crowding. An article about UCSF’s surgicalist program reported that the average response time for a surgical consult to appear in the ED was just 16 minutes. This reduced time, compared to the traditional model (which could take hours), improved outcomes of patients in need of immediate surgery and diminished crowding of the ED. Although this service is subsidized by the medical center, UCSF generated substantial new revenue through an increase in consultations.

Pediatric hospitalists focus on care of hospitalized children, almost exclusively in very large (childrens’) hospitals. Neurohospitalists are neurologists who specialize primarily in treating strokes. Laborists are obstetricians-gynecologists who provide full obstetrical services and nothing more, thereby allowing other OB/GYNs to not to take call and focus on other activities (such as lucrative gynecologic surgeries). These hospital-based specialists, like the hospitalist, ease the pressures of private physicians with whom the hospital might want to collaborate (e.g. gain referrals from them, or allow them to focus on

profitable procedures that generate revenue for the hospital, while other patient care is provided by employed physicians). Moreover, these specialists, with hospitalists, can provide in-patients with full-spectrum, continuous, and coordinated care. This trend is likely to continue, maybe even accelerate, as practice overhead climbs, reimbursements stagnate or decline, and physicians seek work-life balance. While the future is always difficult to predict, it is easy to see how physician employment by hospitals may become a mainstay of future physician practice models.

Summary Box - Hospital Employment of Physicians  Physicians are moving to hospital-based employment models.  Physician motivators include risk reduction, steady incomes, and potential for greater work-life balance.  Hospital motivators involve securing access to physician services as well as financial incentives.  Many employment opportunities are emerging. These include but are not limited to: hospitalists, surgicalists, laborists, pediatric hospitalists and neurohospitalists.

Political Advocacy: What Medical Students Can Do Now Contributed by Kari-Claudia Allen, MS1 Each spring, medical students and physicians from around the nation come together and lobby Congress to support legislation that will positively affect patients and physicians. This year we exposed three raw truths about the shortage of Primary Care Physicians: a lack of adequate Medicaid reimbursements, exorbitant student debt, and the unreasonable Graduate Resident Education funding cap on the number of residency positions in this country. Physicians serving populations of low socioeconomic status play a guessing game each time they submit a claim for reimbursement. They are left to wonder, “What percentage of the cost of seeing that patient will I actually be paid for?” Its little wonder that many physicians have stopped accepting new Medicaid patients; note the “Sorry, but we no longer accept Medicaid patients,” on their doors. Where will these patients go? Its yet another stone thrown atop the mountain of healthcare disparities. A very relevant issue to you is student debt. The average medical student in the U.S. is graduating with upward of $150,000 of debt. Thus, the urgency for medical students to grab the legislative process by the horns early and make our voices heard. Many students ask, “How can I really make a difference in the world of politics?” Well, do you have a phone or internet access? Then you have all you need to be an effective lobbyist! Lobbying can be done: • By letter: the most effective way to make a statement. Use a letterhead, and state your affiliations; thank them for past support. If your cause is already written into a bill, address the bill by name and number, so the Legislator will recognize it when it comes to the floor to be debated and voted upon. • By telephone: ask to speak with the health staff, thank them, and give your name and hometown in their legislative district. State your position on the issue, then ask them theirs. Thank them again and end the call. • By email. Regardless of the form of communication you utilize, remember solid facts help build your argument, but the most moving factor is your personal story as a medical student and future physician. How will this bill affect members of the population you will serve if it is passed into law? Give your experiences and testimonials of others to drive your point home. Visit http://capwiz.com/massmed for more info on becoming an advocate today.

All contributions & analyses contained herein are the work of the contributing authors, and do not necessarily reflect the views or opinions of the Boston University School of Medicine. All content is copyright © MBA, all rights reserved.