Author: James Keaney, MD MPH MAAEM FAAEM
First President of AAEM
Originally published: Common Sense May/June 2019
The Current Climate of EM – How Did We Get Here?
There are several recurrent phrases making their way into the vernacular of emergency medicine including transmutation, Joe the Plummer, the Leviathan Levy, and tumbleweed doctors.
The transmutation of clinically generated fees into management money is the theme of this talk revolving around the misallocation of Medicare-approved, clinically generated fees by practicing doctors into administrative wealth. The premise of the talk is this transmutation not only provides zero-point-zero real benefit to the physician, possibly even has negative effects, but also represents a public health detriment to the communities in which the hospitals are located.
Many of you will ultimately work in community hospitals. Ideally, you will find an independent group with a fair road to full partnership and equitable distribution of nights, weekends and holiday shifts. However, independent groups are rapidly losing their natural habitat meaning most of you will likely work for a large contract management group (CMG) which has scores of contracts with hospitals and then subcontracts with a hundred, or hundreds, or maybe even many hundreds of emergency physicians, most of them residency-trained like yourselves.
When you graduate, you will make three to five hundred thousand dollars a year give or take. For the right to work in a CMG you will be required to tithe 25% of your collected fees to the mothership receiving a prorated number of shillings in return depending on your longevity and fealty to the CULTure of the CMG.
Fifty to seventy-five grand from ten doctors staffing an ED multiplied by ten contracted hospitals adds up to some pretty serious coin. Leasing the one-eighth of an acre on the hospital’s first floor, otherwise known as the emergency department (ED), makes the ED the most expensive piece of real estate in any district with many barracudas in the tank vying for these lucrative leases.
Until very recently, the three-square-yard footage of terra firma in front of the operating table occupied by the anesthesiologist was not for sale, nor the chair in front of the view box by the radiologist, only God’s little acreage in the ED.
What’s a CMG to do with all those Krugerands accumulating in the vault? Well, they could give it back to the clinicians who earned it, but rarely. Instead it goes to unconscionable sums distributed to directors, regional directors, COOs, CFOs, CEOs, and various well-remunerated vice presidents, all of them just a few years ago fellow clinicians working in the foxhole next to you before their rise in the management ranks to partake of the largesse, the same boys and girls now wearing different hats, a bizarre phenomenon not existing in other medical specialties. The neurosurgeon who clips the most aneurysms and removes the most brain tumors has the highest income. In emergency medicine, unlike any other specialty, the emergency physicians seeing the fewest emergencies make the most money.
Yes, twenty grand a month is a common stipend for the director of an emergency department with an annual census of thirty-thousand visits a year. That’s a quarter-of-a-million bucks before they even see a patient. Bear in mind, the chief of staff of the whole hospital has a stipend of twenty grand a year. How ‘bout fifty grand a month for being a regional director, doing the hard work of taking hospital administrators to Michelin restaurants, golf courses, maybe even St. Andrews to secure a high-stakes hospital contract. As one regional director of a California CMG wrote, “you just don’t know what hard work it is dealing with these administrators.” It’s certainly difficult to find time to do clinical work after eighteen holes. In fact, most regional directors only see patients at the point of a bayonet, and even then, just in urgent care clinics taking out a few stitches here and there. There are also fluff positions for loyal buddies, like vice presidents of education, government affairs (what surgery group-practice has their own vice president for government affairs?), leadership, and most importantly vice presidents for mergers and acquisitions where some potentially astounding salary and commission money is to be made especially if a buyout occurs or an IPO emerges. The physician CEOs and others are generously paid, “work” in opulent offices, and receive lavish golden parachutes, sometimes the golden watch worth millions of departing money for their “valuable services,” all originating from the Medicare-approved, clinically generated fees of the yeomanry. Everything about emergency medicine “management” is luxuriant, and again, only in emergency medicine not the other twenty-three formally recognized medical specialties by the American Board of Medical Specialties (ABMS).
What to do with the rest of the rapidly accumulating loot? Logically, one turns to the vice president of mergers-and-acquisitions. But there are only five thousand emergency departments in the nation and more than half of these are in rural areas, or academic centers, Kaisers, VAs, or military hospitals so there is a limited quarry to excavate. After continuing efforts to torpedo the other CMG’s ED contracts, the next logical prey is right in the neighborhood, the square yardage in front of the operating table. Given that, one of best ways to metabolize all the mounting cash is to acquire, mainly purchase, the nearest investable asset which would be an anesthesia group, and voila — expansion bonanza by annexation — and now on to that chair in front of the PACS machine in the radiology cave. The triple play offers the complete package, an Amazonification with the whole enchilada from one CMG, one-stop shopping for hospital administrators. Large corporations, having nothing to do with emergency medicine, have taken note of the high-profit margins by skimming off of the fees of emergency physicians with bigger fish gobbling the barracudas purchasing ED groups creating handsome dividends for their shareholders. Unbelievably, a Moby Dick hedge fund has recently gone into the sweepstakes as well, and a neologism, “the Leviathan Levy” on emergency physicians has been created for the mega-wealthy.
It is self-evident when Joe the Plumber takes his daughter into the emergency department at 3:00am for an earache and pays his fee to the residency-trained board-certified emergency physician, Joe is unaware a portion of his fee, the Leviathan Levy is going to a well-rested investor comfortably in bed. It is equally self-evident Joe the Plumber would find displeasure with this fiscal arrangement with the moneychangers in the temple.
Emergency physicians also work in disjointedness from the internists, surgeons, and pediatricians, physicians who usually settle in one locale for a lifetime of work with continuity-of-care for their patients. These doctors have due process rights which fall within the purview of the governance of the hospital medical staff. If a dispute occurs with hospital administration, the administrator cannot single-handedly remove a physician. Administrators can request a judicial review where the medical staff doctors themselves, and only the medical staff doctors, make the final decision on staff discipline. However, CMGs make all emergency physicians sign lengthy contracts, the forty-page contracts being masterpieces of complexification also assuring the hospital administrations the CMGs will kindly handle all due process adjudications with their own in-house extrajudicial Star Chamber complete with kangaroo courts, show trials and hanging judges. Administrators remind emergency physicians in so many words they can be removed if the color of their ties is not to their liking.
You also have gag orders other specialists don’t, and this in today’s world, represents a public health detriment to the community. The no-fly zones for emergency physicians are safety suggestions to administration that cost money. Do not complain about the carbon-dated ultrasound machine with a missing probe gifted from the radiology toolshed. Never criticize the hospital policy to cotton-candy the (insured) drug addicts who waste an inordinate amount of time and resources to get their daily fix. And whatever you do, don’t suggest the obvious like extra nurses for the understaffed evening shift. A good CMG director will inform you ahead of time not to express such verboten thoughts at staff meetings. The director will inform you these suggestions can only be brought by the permanent cardiac or orthopedic rainmakers, not subcontractors with ninety-day no-cause termination contracts. You will soon realize the indignity of knowing all the other specialists at the table are fully aware you’re the only doctor that can be here today and gone tomorrow. “Whatever happened to …?”
You are also the community canary in the coal mine warning about unusual infectious disease patterns especially meningitis and other notifiable diseases, or messaging the public of a higher grade of heroin on the street or a local food-poisoning epidemic, and as well, unfortunately, have to act the constable for on-call doctors who don’t respond appropriately. You are also the de facto primary care doctors to many locals especially the recently uninsured. Party loyalist regional directors have the eye of an ornithologist making sure any birds singing out of school are neutralized. If you are a responsible town crier but don’t color within the lines you could find yourself absent on next month’s schedule tumbleweeding to a new CMG located in another zip code.
The work-a-day of a national CMG begins with the daily check of a map of the country showing all existing ED contracts with red pins showing the contracts soon to expire. The situation room looks like the headquarters of NORAD with the bloodhounds on red-hot scents for any new contracts up for grabs. Next the printing presses are heated up. Thousands of beautiful, slick, Madison Avenue-designed brochures, printed on glossy, very-expensive papyrus tsunami the offices of hospital administrators. If the CEO bites, the marketing team is sent for the presentation. If you ever get the opportunity to attend a presentation, jump at it, even if it’s short notice and you realize they only want to showcase a tokenized scrub like yourself. Be their preforming seal and be dazzled by the ringmaster orchestrating the men in crisp blue suits and red ties accompanied by the Saks Fifth Avenue ladies in high heels “shocking and aweing” hospital administrators with their technicolor bar graphs and pie charts demonstrating how their doctors are providers of “peer-reviewed, evidence-based, best practices to offer the highest quality emergency care at the lowest price making your institution a Center of Excellence with one-hundred per cent CUSTOMER SATISFACTION!”
Then the tyranny of the meaningless metrics, and ah yes, the metrics of productivity are the darling of the marketing departments with the MBAs from the best schools who excel with Excel. You must embrace that this side of the room sees 2.4 patients per hour but this side sees only 2.1 patients per hour. Might not seem like much except the taxi-meter runs 24-7-365 and the cash the 2.4s generate adds-up, possibly enough to buy another anesthesiology group. Now, of course, it may be the 2.1s are more meticulous with their suturing, likely to take their time sewing up a vertically oriented facial laceration in a child too deep to Dermabond. The 2.4s would rather unwrap a thick 4-0 nylon thread with a large fishhook needle and get it over with, maybe even whip out a staple gun and get themselves up to 2.5. Hedge funds only want productivity from the rapid-through-put assembly lines since insurance only pays for the length of the laceration not the final cosmetic outcome.
All CMGs will then claim they have trade secrets revealed only to the exclusivists and their Fellows. Emergency medicine is the only specialty offering a Fellowship in Management! A madrassa in “management?” Could someone please tell me what trade secrets are in emergency medicine? They’re obviously pretty well-kept secrets since no stool pigeon has ever told me what they are. What about proprietary information, copyrights, trademarks? What’s the secret sauce here and how come nobody’s spilled it? Keeping the contract at all costs, regardless of morality is clearly the single biggest trade secret which is common knowledge to all in the subculture. But how far does the information warfare and nefariousness go to poach ED contracts from other CMGs? Hacking tools perhaps?
After the show’s main event winds down, you will realize that you, the clinician who evaluates and treats the patients of America, are the sideshow, the bit player, a movie extra utilized for window dressing. You may be invited to the Loch-Ness-Monster-Lobster lunch, but the magicians still do not reveal their secrets. You will not be invited to where the deals are solidified, an Area 51 where the perks are announced to the administrator. You will also not be invited to the champagne cork popping if the CMG successfully hit the mother lode by outmaneuvering and capsizing the existing contract holder, dropkicking the current emergency physicians out of town to be proselytized into a brand-new CULTure. Someday, when the curtain of contract acquisition is finally pulled back, the Wizard of Oz-like figure will appear.
Most unfortunately, the American College of Emergency Physicians (ACEP) has been dominated by the wealth and exploitation of the original founders and many past presidents who were never emergency physicians to begin with but were highly motivated by the riches of a plantation economy. Their strict radio silence disguised as laissez-faire has betrayed the innocent blood of newly graduated residents, willfully neglecting individual physician rights along with the community welfare, and aiding and abetting the power of the abusive corporations. The litmus test for management advancement in CMGs is active involvement in ACEP at national and state levels. Most CMGs pay the dues money of their subcontracted physicians utilizing a tax deduction to massively boost ACEP’s treasure chest indirectly.
What about the general medical societies, national and local? They will not, I repeat, be of any help. Don’t get me wrong, they perform their tasks extremely well, but they are not constituted in such a fashion to champion an explosive issue especially when some of their CMG-embedded dues-paying, office-holding, cocktail-party buddies are involved.
What will happen this time when reforms are proposed? There will be a perfunctory public reading of the mission statement and other pieties, “We are here to protect the health of the Blah, blah, blah.” Then the faux outrage will demand a committee be formed, yes of course, a committee with all the stakeholders present to hammer out a suitable solution fair to all parties for this perplexing dilemma. Committee is medical code for delay until the fuss dies down. Joe the Plummer is in no need of such head scratching. If Joe applies too much external pressure they will announce not just a committee but convene a Blue-Ribbon Commission to issue a White Paper “for the protection the public.”
There’s still an elephant in the room my friends in the national medical societies. When the one-eighth of an acre on the hospital’s first floor is being leased for the price of Fabergé Eggs, and clinically generated physician fees are alchemized into obscene “physician-owned-and-managed” salaries and bonuses, all of medicine is losing ground. Surgeons don’t pay their office managers more than themselves, and cardiology groups don’t pay fifty-thousand dollars a month for managers to handle schedules, retirement plans, health insurance, and go golfing with administrators on weekends in Hawaii. There’s no reason not to pay management doctors a fair hourly for his or her time that is equal to the clinicians seeing and treating the patients rather than the current tapeworms envisioning themselves as a bizarre new form of captains of industry even though they created no industry. Other than raw exploitation there is no economic justification for excessive nonclinical, laughable bonuses ruled by the now rather visible hand of the market place, paying clinicians “whatever the market will bear” while keeping the rest for themselves.
Ossified brains sipping Grand Marnier in executive dining rooms will harrumph, “Isn’t this capitalism? What do those apparatchiks want, Bolshevism? Although Joe the Plumber never read Marx and Engels, and never sipped Grand Marnier in an executive dining room, it would again be self-evident that collectivized labor in a Worker’s Paradise with a Five-Year-Plan by a Central Committee with no Glasnost or Perestroika, and with untold riches going to the politburo is not entrepreneurialism but worthy of a May Day parade.
Not to be totally exculpatory to the old guard but the embryonic specialty of emergency medicine didn’t even exist just thirty-five years ago. Most older doctors know only of serving a tour of duty in the ED as a resident or as a moonlighter, and many still say, “I used to be an ER doc.” Many physicians who were full time moonlighters were bidding their time until a dermatology residency or a gastroenterology fellowship opened up. Others had medical or substance abuse problems such as the orthopedic surgeon who developed rheumatoid arthritis. Some were just ski-and-scuba bums taking a gap year making pocket money doing shifts here and there. More than a few were post-sixties Jesus lookalikes wearing sandals and flowing robes to work. Many who attended the first emergency medicine conferences in the 1980’s looked like characters who’d just stepped out of the Old Testament or Greek Mythology with this image still persisting.
However, a new paradigm in American medicine has emerged, happening so rapidly many physicians haven’t realized the seismic shift, an epochal medical advancement as important as the CAT scan or MRI. Emergency medicine needs a new Tabula Rasa (clean slate). Today’s emergency departments need to have professional physicians staffing the department as integral members of the medical staff for a lifetime of continuity of community care. Organized medicine has to embrace this model rather than the current greed-based musical chair policy where whole ED staffs are replaced en masse by marauding CMGs with their new set of provisional physicians parachuting into town. No longer can it be ignored. If general medical societies really want new clinician members they can’t walk between the raindrops forever pretending to be the piano player in the whorehouse not knowing what’s going on upstairs.
There’s an obvious common-sense solution. I propose the Emergency Medicine Antiprofitering Act (EMAPA) which includes four elements:
- A percentage cap on management fees
- Interdiction of the sales of emergency department contracts for any form of consideration
- Elimination of coterminous clauses where physicians automatically lose hospital privileges when the CMG loses its contract
- Strengthening due process rights for real-estate-based physicians.
In reality, with a simple percentage cap on management fees the rest will fall into line with the cap being the core of the reverse engineering that needs to be done. Until there is a cap, the last rites cannot be administered to the current blight of the CMGs.
Although I’m not the greatest fan of Obamacare, one clause peaked my attention — the clause limiting the administrative costs of health insurance companies to 15% of the premiums, requiring 85% go directly to patient care. Why can’t we clinicians have a law capping the percentage any organization or individual expropriates for their so-called management? Ironically, the oligarchies justify their incomes because of the excessive amount of resources spent on the cutthroat competition fending off the other jackals for the lucrative spoils of a new contract.
We can justify a congressionally enacted federal law since so many of the payments come from government sources. Taxpayer Joe should know exactly where his fee is going. Representative Pete Stark, while in congress, would lecture us that Medicare ran on a four per cent overhead while indemnity insurance ran on 35% overhead. Capping management fees to 4% excluding the hard cost of billing and malpractice would eliminate all interest in acquiring an ED contract except for those wanting to work in a hospital and live in a community for a lifetime career. The Barnum and Bailey Circus of emergency medicine would come to a screeching halt with no more avalanches of glossies to administrators, restaurants, golf, top-shelf liquors, Waterford crystal or Steuben Glass. Emergency medicine needs to codify the ancient doctrine of “Render unto Caesar.”
The second approach, and I believe the better one, is the Thurgood Marshall strategy. Who would have ever thought the little elementary schoolgirl in Topeka, Kansas would overturn the sixty-year precedent of Plessy v. Ferguson eliminating the charade of separate but equal? The Centers for Medicare and Medicaid are in clear violation of the original intent of the Medicare Act. The Medicare system has become the unwitting supplier of the river of money oiling the scam artists sometimes creating fast-buck millionaires overnight, essentially a federally sanctioned money laundering scheme enriching unnecessary third-party middlemen. They have been shameful stewards of the taxpayer money designated to provide healthcare to the Joe-the-Plumbers of America. Even Ginsberg and Kavanaugh would need no head scratching on that one. For that matter, even Trump and Ocasio-Cortez wouldn’t need to committee it. It’s time for the Common Sense Emergency Physicians versus United States of America.
Thomas Carlyle said, “No lie can live forever.” Eventually payers will catch on to this bizarre falsity existing in only one specialty. It would be far better for us emergency physicians to bring it to the public’s attention rather than an outside group doing it for us. It would be most embarrassing for a public interest group to do the dirty work because of our inaction. At a minimum, we must Paul Revere the nation. Two lanterns in the belfry and Leviathan is coming your way.
These are high-stakes issues that big money is going to fight to the death, but my fellow emergency physicians, this is a good fight and the issues are far from insurmountable. Corporations will threaten us with what I call the three lawsuits of the last refuge of scoundrels – libel, slander, and antitrust. CMGs know they will be laughed out of open court when they say that contract management groups place patients above dividends and bonuses. District by district, state by state, we can expose them, removing the stranglehold existing in only one medical specialty. We need to fight with an organization interested in long-term career emergency physicians serving a community throughout their tenure, dedication, and offering true quality assurance for the populace. We would no longer have to choose between the Oath of Maimonides or the bottom-line dictums of Bernie Madoff.
It’s best for our patients, and it’s best for us.
James Keaney is a former president of the American Academy of Emergency Medicine (AAEM).
AAEM was formed in 1993 as the emergency physician’s alternative to ACEP, and now has eight thousand members. AAEM is the only organization of board-certified emergency medicine physicians that promotes the right of every American to be served by a qualified emergency physician and the right of every physician to serve those patients with full autonomy without corporate interference, and with all the obligations, duties, and due process rights of the entire hospital medical staff.
James K. Keaney, MD MPH, a clinical emergency physician for the past 43 years, is solely responsible for the contents of this article.