The last post on this blog (Contracting the Hospital’s Emergency Department Mission) got a lot of hits, so I thought I would follow up with another post on the same subject, this time dealing with why emergency physician groups get replaced by their hospitals. The reasons, of course, might dictate how these groups might want to respond when their practice is threatened with takeover by another EM group. Typically a group of emergency physicians that is staffing a hospital ER (or ED, as we now call it) learns of this threat when its hospital administrators advises the group that the contract is going out to bid. The current EM group may or may not be invited to bid on the staffing contract, which is a pretty good indicator of things to come. There are many reasons why hospital ED staffing contracts go out to bid, or are cancelled; and sometimes this has nothing to do with the existing contract holder’s success at meeting the C-suite’s expectations.
Hospitals may put the contract up for bid because their hospital-affiliated system has decided to put all the EDs at all the different hospitals in the system out to bid to a single large EM group in the hope of getting a ‘better deal’, eliminating subsidies for these contracts, or standardizing care and reducing equipment and staffing costs across their system, or forcing the large EM group to pick up loss-leaders (sites that have a poor payer mix) along with the better sites. The rationale for this approach eludes me, as it seems like a prescription for a lean towards the mean, but it continues to be a factor in EM group turnover.
When it comes down to the decision of a hospital administrator for a single hospital, a threatened ‘request for proposal’ for the ED contract usually reflects one or more of the following: the perceived need to eliminate a stipend supporting the EM practice; frustrations of ED nursing staff with the existing EM group; poor performance of the EM physicians with metrics like patient satisfaction scores or ‘time to provider’; poor relations between the EM group physicians and some of the more important (i.e. revenue generating) medical staff; aggressive pursuit of the contract by another EM group; a new administrator groping for a way to make his mark in his new role (the dumbest reason); failure to deal with ‘problem’ EM physicians in the group; multiple complaints by patients about the ED (usually an excuse for the RFP rather than a reason); or just a timely testing of the marketplace for EM contract services. Curiously, there are some issues that don’t seem to be raised as justification for a change (and perhaps ought to be): grossly excessive charges and/or up-coding by the EM group; aggressive balance billing by an EM group that avoids contracting with health plans participating with the hospital; lack of active participation by the EM group in hospital medical staff committees and affairs; lack of EM physician involvement in the community, and the like.
Turnover of an EM group that has a long-standing relationship with a hospital is often a sad, frustrating, and disruptive experience, displacing very good doctors from their homes, school districts, and communities; and hospital administrators should not take this on without good reasons. Sometimes EM groups, or the group’s management, become complacent, distracted or disinterested. Issues with the nursing or medical staff may fester; or the group loses some of its dynamism, and fails to bring on new blood or mentor upcoming leaders; or find ways to continuously improve the services to ED patients. In such cases, turnover through an RFP can be a necessary, if unfortunate, solution, or a catalyst for necessary changes. Unfortunately, hospital administrators can easily find a number of excuses to justify putting an ED contract out to bid even when the EM group and its individual physicians are stellar performers. Administrator will sometimes try to replace the EM group, but retain most of the physicians in the group under ‘new management’ which it is hoped will be able to meet the new or unmet demands of the administrator while tempering the angst of medical and nursing staff that have come to respect and rely upon the individual EM physicians responsible for their patients. Sometimes this works, sometimes it fails miserably. Much depends on the cohesiveness of the EM physicians in the group, the support of the medical and nursing staff, and the ability of the group’s leadership to weather the storm. In some cases, the RFP re-energize the docs in the group to step it up and rise to the occasion. EM practice is incredibly demanding, and requires EM group leadership that goes above and beyond what most physicians are willing or able to do, and a team of physicians that are truly invested in their practice. Those EM physicians who do their shift, go home, and forget about the ED until their next shift are likely to experience the threat of losing their practice more than once in the professional career.
Some EM groups, faced with contract turnover, might want to consider merging with another group that can bring some of the talent and expertise to the table that their own group might be missing. Other EM groups that, after careful and thorough self-assessment, believe they deserve to retain their contract and are willing to fight for it; should harness this energy, recommit to their team members, stand on principle, and prepare to repel boarders.