Healthcare quality guru Donald Berwick once said, "Every process is perfectly designed to achieve the results it gets." Never was this adage more applicable than in California. California's legislators and regulators, supported by union leaders, have seen fit to enact stringent staffing laws in the face of crippling nurse shortages and back-breaking seismic retrofit requirements despite burgeoning government budget deficits and declining private- and public-sector reimbursement.
Well, the new system is working perfectly and results are coming in, according to several articles in your May 31 issue. In your story, "Losing its luster," (p. 10): "There's no gold rush in California's hospital market. It's more like a mass exodus. ... Tenet Healthcare Corp. put 19 of its 36 California hospitals up for sale. ... Catholic Healthcare West ... has focused much of its expansion strategy in the Phoenix and Las Vegas markets." ... In "Ratios ruling irks hospitals" (p. 9): " `As is true for 88% of the hospitals in California, we are not in compliance 100% of the time,' (Stephen) Newman (CEO of Tenet's California region) said." In "Blow to the system" (p. 4): "HCA plans to shut down its aging San Jose (Calif.) Medical Center by 2006 rather than shoulder the high seismic-retrofitting costs. ... Santa Teresita Hospital, Duarte, abruptly closed its emergency and acute-care services rather than face the high cost of the state's newly enacted nurse-to-patient ratios."
Good intentions, unfortunately, come at a cost and the bill is now due in California.
Executive vice president
A ready source of workers
Your June 14 issue includes a Workforce Report (p. 22) and an editorial on the workforce shortage (p. 18), which discuss the need for healthcare professionals at the operations end of the spectrum and the CEO office. The same issue has a cover story on how and why CEOs are retiring early ("Retirement community," p. 6). I am concerned that there is a large subset of experienced healthcare managers who are flying under the radar and whose needs are not being addressed: the baby boomers in their 50s who have been laid off or released after many productive years in the field.
Although it is nice to say in the editorial "healthcare jobs are relatively stable," that is not necessarily the case for management staff. I am aware of many colleagues who are at or approaching the end of their severance deals, and are seeking part-time teaching and consulting opportunities just to pay their bills.
It appears that many healthcare organizations and executive recruiters see their age and ignore their skills and experience.
Industry in general now sees the value of experienced, mature managers, even in the emerging technology arena. Perhaps it is time for healthcare to start looking at the talent pool that has already been well-educated and trained as the resource that it really is.
Master's in health program
Long Island University
Other facts in tort crisis
I was disappointed in the apparent lack of rigorous investigation and uncritical acceptance of quoted "facts" that formed the basis of Todd Sloane's May 24 editorial, "Med malaise" (p. 17). He declares his strong bias in the second sentence: "As usual, the House earlier this month passed a bill severely restricting the rights of plaintiffs to recover damages from medical errors."
The bill passed by the House does not focus on "punitive damages." Instead, it addresses the issue of compensation for emotionally determined, unquantifiable noneconomic damages as well as seven other areas of reform designed to bring greater equity to the tort system and ensure a greater proportion of any award goes to the injured patient and a smaller portion to the plaintiff's attorney.
Troy Brennan of Harvard University and others have demonstrated there is no correlation between jury awards and liability (physician's performance below the standard of care) or causation (the alleged malpractice of the physician caused the injuries). Instead, the only statistically significant correlation is the severity of damages claimed by the patient.
Your statement that all tort reform "would accomplish is to keep children, retirees and homemakers ... from getting the funds they need to recover from serious medical errors" is incorrect. Nothing in the bill prevents this group from receiving the funds they need to recover. But it does help accomplish the principal goal of ensuring access to medical care for these same individuals.
You cite the General Accounting Office and other unnamed sources as indicating there is "little or no correlation between limits on pain and suffering and lower malpractice rates." The agency report actually says: "A cap on noneconomic damages may decrease insurers' losses on claims by limiting the overall amount paid out by insurance companies, especially since noneconomic damages can be a substantial portion of losses on some claims. Further, such a limit may also decrease the number of claims brought against healthcare providers. Plaintiffs' attorneys are usually paid based on a percentage of what the claimant recovers, and according to some trial attorneys we spoke with, attorneys may be less likely to represent injured parties with minor economic damages if noneconomic damages are limited."
Data from Florida and Missouri demonstrate savings from caps on noneconomic damages. Premium increases in California relative to the rest of the country dramatically demonstrate the benefits of noneconomic caps, though other portions of the law have played a substantial role as well.
And there is the experience of such states as California and Colorado that clearly show appropriate compensation for economic loss related to patient injury and unhindered access to medical care.
Your statement that medical professional liability insurance companies make "highly speculative investments with reserves" is categorically false. Medical professional liability carriers have only a small portion of their assets in stocks. These companies are dependent on the steady, predictable income stream of corporate bonds, treasuries, municipal bonds and similar "fixed income" instruments.
The reforms that the editorial decries as "restricting the rights of plaintiffs" are but the first steps needed to solve the liability climate that is destroying American medicine, turning talented people away from medicine as a career, creating a maldistribution of specialties including obstetrics, neurosurgery and trauma care, and depriving patients of medical care.
Chairman, president and CEO
Mica Insurance Co.
A capital story
The colorful 20-year journey to build the new Jersey City Medical Center was accurately reflected in the article "Patient tower" (May 31, p. 34). However, it is important to emphasize that the project could never have been completed without the Department of Housing and Urban Development's Section 242 Hospital Mortgage Insurance Program.
The section 242 approval process is very thorough and deliberate. Safety net hospital applicants such as JCMC don't have alternative sources of capital, particularly for a major hospital replacement project.
Initially HUD was concerned about liquidity and our ability to service the debt, as well as environmental issues and cleanup of the site. These were addressed to HUD's satisfaction by a capital reimbursement commitment from New Jersey's Medicaid program and site remediation by the State Department of Environmental Protection. The HUD approval was not based on political factors.
Merrill Lynch, our investment banker, sold the bonds in August 2001, and a closing date was scheduled for Sept. 25, 2001.
Exactly two weeks after the bond sale, terrorists attacked the World Trade Center. The chaos following the attack included the closure of much of Manhattan's financial district as well as the federal building where HUD's staff was located. Nonetheless, the closing took place as scheduled and construction was able to start promptly, due to the extraordinary efforts of staff and attorneys from HUD, Merrill Lynch and the New Jersey Healthcare Facilities Financing Authority.
President and chief executive officer
Jersey City, N.J.
Driving home a point
Jeff Goldsmith makes some valid points in his letter to the editor, "This isn't reimbursement" (May 31, p. 24). I believe, however, that he has missed a very essential point, and one that he even refers to in his letter, which is that hospitals are not paid according to the same market forces as Toyota. In fact, Toyota prices automobiles based upon production costs, overhead and a profit factor. If Toyota says it expects to be paid $20,000 for a car, that is what it typically gets. If a hospital says it expects to be paid $5,000 for a certain procedure, it typically gets 50% to 75% of the expected price.
The difference is that if an individual wants a Toyota, the asking price or a near approximate must be paid before driving the car home. A Toyota is not provided "regardless of ability to pay." A hospital, on the other hand, must provide services to individuals seeking services, regardless of their ability to pay. Is there a difference? You bet there is! To quote Mr. Goldsmith, "In no other sector of the economy does management think this way about the payment process." Welcome to healthcare in the U.S.
Vice president of operations