A physician executive heading the New Albany (Ohio) Surgical Hospital says he and the 16 other doctors whose medical staff privileges are being threatened at nearby OhioHealth in Columbus will take legal action against the hospital chain.
According to orthopedic surgeon Carl Berasi, D.O., who leads 30 physician owners at the multispecialty surgical hospital that opened in the Columbus suburb in December, the latest action by the seven-hospital OhioHealth group is tantamount to war against physician ownership and physician independence.
"If you compete against the hospital in any way, you could lose your credentials," Berasi said. "It's just the last in a series of threats."
The latest round in a battle that's been brewing since 2002 came Monday evening, Berasi said, when 17 of the 30 physician owners of the new hospital were called to a hearing before a local attorney hired by the hospital. They were asked to respond to a single question: whether or not they had invested in a competing facility.
Their attorney answered yes for them, Berasi said, but otherwise the lawyer was not allowed to speak
"There really was no hearing," he said. "I think it took them 10 minutes and that was with all the hellos and goodbyes."
Berasi said he has yet to receive official notice from the hospital that his privileges are suspended, but when he does, he and other physician expect to sue.
"If this type of economic credentialing is allowed, it will end all private practice of medicine in the United States," he said.
David Morehead, M.D., chief medical officer for the OhioHealth group, said the 17 physicians whose names appeared on the New Albany Surgical Hospital Web site were sent letters in December regarding the board policy. The policy was set in mid-2002, Morehead said. It requires physicians to relinquish their privileges at OhioHealth if they invest in a limited-service, for-profit hospital.
The policy was structured so that physician investors would "voluntarily relinquish" their privileges, Morehead said. That will take place Jan. 31, he said. The meeting Monday was simply to confirm the ownership interests of the 17 physicians, he said.
Morehead said he has not received the report from the OhioHealth attorney yet about Monday's meeting.
The hospital's action has only solidified physician opposition, Berasi said, adding there have been no defectors among the physician owners. Berasi said some of the 13 other physician owners not summoned to OhioHealth on Monday do not have privileges at OhioHealth, but he doesn't know why the others were not targeted.
Berasi said he's unsure whether his wife, an ophthalmologist who also has privileges at OhioHealth, will be similarly stripped of privileges, since, he said, the policy includes anyone related to or a business partner with a physician investor.
"The best thing that has come out of this was meeting all these other physicians," he said. "They have been solid since day one."
Individually, Berasi said, he will try to schedule as many surgeries as he can to the new facility. Exploring obtaining privileges with other hospitals is a possibility for some physicians in the group, he said. But the OhioHealth action has put all of the physician investors' backs to the wall.
"Our option would be to go bankrupt if we don't continue to go the course now that we've built the building," he said.
Morehead said the policy was approved by the hospital board, which foresaw the competing hospital pulling money from OhioHealth that it needs to run other programs that are beneficial to the community.
"The board ruled that it was a conflict of interest that was harmful to the community, that a physician has privileges at two hospitals and would have a financial interest in one," Morehead said.
Morehead said the same philosophy would apply in principle to ambulatory surgery centers and other physician-owned facilities, but those were not targeted by the policy.
"The board, aware of that concern, specified it would not consider any actions against ambulatory surgery centers or office practices," Morehead said. "Ethically speaking, it's hard to draw that distinction."
Morehead said there needs to be a national debate on who should provide which healthcare services.
For the board, the difference between the specialty hospital and physician-owned ASC was in-patient beds at the New Albany facility, he said. "That was our bright line in the sand."
He said Berasi's wife was not asked to appear at the hearing, but her situation will be reviewed.
Alan Pierott, M.D., founder of the physician-owned Fresno (Calif.) Surgery Center, called the OhioHealth policy "heavy-handed" and said it's interesting the hospital has not gone after ASCs, since they likely represent a larger share of lost business than Berasi's specialty hospital.
Pierott, an orthopedic surgeon, said one issue raised by the OhioHealth action is the role of a not-for-profit in the community. "We grant them as a society a special status, and denying credentials to qualified physicians doesn't seem to be a furtherance of quality care in that community."
Pierott said he doesn't think much of it as a business tactic, either. The physicians at his center typically perform about 20% of their surgeries in nearby hospitals, he said. "You're simply going to force those physicians to expand the scope of their services in their own facility."
Economic credentialing is fraught with dangers for the big hospitals, said John Rex-Waller, chief executive officer of National Surgical Hospitals, a developer of 10 surgical hospitals and six ambulatory surgery centers. All but one hospital has physician ownership.
Rex-Waller said the policy risks implicating federal fraud and abuse statutes, as well triggering FTC scrutiny for anti-competitive behavior.
Rex-Waller added that physicians wanting to open their own facilities have always faced this threat, so this is nothing new.
"I guess it's always been a matter of time before someone tried it," Rex-Waller said. "Now these guys have pulled the trigger."
But he doesn't see the OhioHealth action having a chilling effect on further development of specialty hospitals.
"Healthcare is always local," he said. "It depends on what the physicians' relationship is with the local hospital. In Columbus, it was very antagonistic. There were opportunities to joint venture this all the way along."