Amicus Curiae Brief — Poliner v. Texas Health Health Systems Systems (No. 08-543)

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Supreme Court, U.S. 3B \ \\

MOTION FILED

No. 08-543

ane: IN THE

Supreme Court of the United States

LAWRENCE R. POLINER, M.D., AND

LAWRENCE R. POLINER, M.D., P.A.,

Petitioner,

Vv.

TEXAS HEALTH SYSTEM, DOING BUSINESS AS

PRESBYTERIAN HOSPITAL OF DALLAS, TEXAS, A TEXAS

NON-PROFIT CORPORATION, AND JAMES KNOCHEL, M.D.,

Respondent.

On Petition for a Writ of Certiorari to the

United States Court of Appeals

for the Fifth Circuit

MOTION FOR LEAVE TO FILE BRIEF

AMICUS CURIAE AND BRIEF OF

AMICUS CURIAE SEMMELWEIS SOCIETY

INTERNATIONAL, INC.

PAUL S. BLUMENTHAL *

JEFFREY GRASS

Of Counsel

LAW OFFICE OF PAUL S.

BLUMENTHAL, P.A.

Suite 301, West Court Building

2448 Holly Avenue

Annapolis, MD 21401

* Counsel of Record (410) 266-2430

November 24, 2008

OPT EBACE

WILSON-EPES PRINTING CO., INC. — (202) 789-0096 — WASHINGTON, D. C. 20002

IN THE

Supreme Court of the Anited States

No. 08-543

LAWRENCE R. POLINER, M.D., AND

LAWRENCE R. POLINER, M.D., P.A.,

Petitioner,

Vv.

TEXAS HEALTH SYSTEM, DOING BUSINESS AS

PRESBYTERIAN HOSPITAL OF DALLAS, TEXAS, A TEXAS

NON-PROFIT CORPORATION, AND JAMES KNOCHEL, M.D.,

Respondent.

On Petition for a Writ of Certiorari to the

United States Court of Appeals

for the Fifth Circuit

MOTION F@R LEAVE TO FILE

BRIEF AMICUS CURIAE

COMES NOW, SEMMELWEIS SOCIETY INTER-

NATIONAL, INC., by and through counsel and files

this its Motion to File Amicus Curiae Brief without

the consent of the Petitioners to this matter.

Respectfully submitted,

PAUL S. BLUMENTHAL *

JEFFREY GRASS

Of Counsel

LAW OFFICE OF PAUL S.

BLUMENTHAL, P.A.

Suite 301, West Court Building

2448 Holly Avenue

Annapolis, MD 21401

* Counsel of Record (410) 266-2430

i ey ee

BACKGROUND OF PHYSICIAN DUE

NY SERIF EAD veccsvesovcrecesevennvssssssnnsoesssseness

LE MAT A CT

I. THE COURT SHOULD GRANT THE PETITION

IT.

iil.

TO RESOLVE WHETHER THE HEALTH CARE

QUALITY IMPROVEMENT ACT HAS BEEN

DISPLACED BY FEDERAL COMMON LAW .....

MEDICARE IMPROVEMENTS FOR PATIENTS

AND PROVIDERS ACT OF 2008, REQUIRES A

SHIFT IN INTERPRETING HCQIA’s FAIR-

NESS AND DUE PROCESS STANDARDS FOR

PEER-REVIEWED PHYSICIANS. AFTER JULY

2008, HCQIA MusT BE INTERPRETED

ACCORDING TO JCAHO _ STANDARDS

ISSUED AND ENFORCED PURSUANT TO

EXPRESS STATUTORY DELEGATION TO

JCAHO FROM THE SECRETARY OF

HEALTH AND HUMAN SERVICESG...............65

HCQIA’s DUE PROCESS, EVIDENTIARY,

AND RELATED FAIRNESS REQUIREMENTS...

I 0 a5nicsisaios axis sbaikenngenbieyusereameenioncamles

APPENDIX A- The “White Coat” of Silence

Working Nurse Magazine. Reporting suspi-

cions to the charge nurse is often enough to

get marked as a troublemaker and potential

victim of the kill the messenger syndrome.

ree ZL, 2006 papen,11-15.) ...........0ccseessececoreess

(i)

TABLE OF CONTENTS—Continued

APPENDIX B - SILENCE KILLS NEWS RE-

LEASE New Study Finds U.S. Hospitals

Must Improve Workplace Communication, to

Reduce Medical Errors, Enhance Quality of

CUTe, GHRREY DE, DOCG sevcccesccncesescecccnssnssesnes

APPENDIX C - HEALTHGRADES NEWS-

RELEASE - DEATH RATE 70% LOWER

AT NATION’S TOP-RATED HOSPITALS:

HEALTHGRADES 11TH ANNUAL HOSPI-

TAL QUALITY STUDY. GOLDEN, Colo.

APPENDIX D - FIVE YEARS AFTER TO ERR

IS HUMAN: WHAT HAVE WE LEARNED?

Journal of the American Medical Association

ey PN ee)

APPENDIX E - JOINT COMMISSION ON

ACCREDITATION OF HEALTHCARE

ORGANIZATIONS (JCAHO) . . . [tjhese

standards are “the law of the land”. . .

(Oakbrook Terrace, Ill. - April 30, 2001).........

APPENDIX F- JOINT COMMISSION ON

ACCREDITATION OF HEALTHCARE OR-

GANIZATIONS (JCAHO) Applicable Joint

Commission Standards (LD.03.01.01 and

LD.03.01.01) Behaviors that Undermine a

Culture of Safety. (July 9, 2008) ....................

APPENDIX G - Swinging Pendulum of Peer

Review Immunity. By Charles I. Artz, Esq.

Physician’s News Digest -—- Published

November2001 http: //www.physiciansnews.

CET TINE Fr as ieesse cn csisccatvinavsrataraieesestinens

Page

12a

17a

22a

27a

ill

TABLE OF CONTENTS—Continued

Page

APPENDIX H - OVERTREATED - Why Too

Much Medicine Is Making Us Sicker and

Poorer (Paperback ISBN-10: 1-58234-579-1

2007 by Shannon Brownlee .............cccceeceeeeeeees 40a

TABLE OF AUTHORITIES

CASES Page

Austin v. McNamara, 979 F.2d 728, 733

I ios ciansersversveseravecenesesevesseee 12

Bhatt v. Brownsville General Hosp., 236

Fed. Appx. 764 (3rd Cir. 2007)................. 12

Bolt v. Halifax Hosp. Med. Ctr., 891 F.2d

a csoncasessonenasscorvorercnes 14

Bryan v. James E. Homes Reg'l Med. Ctr.,

33 F.3d 1318, 1326-1329 (11th Cir. 1994) 14

Braswell v. Haywood Regional Medical

Center, 234 Fed. Appx. 47 (4th Cir.

Nees acuiciasnverMiccnseseceess 12

City of Milwaukee v. Illinois, 451 U.S. 304,

eg Ee 10

Estate of Blume v. Marian Health Center,

516 PF .ad 705 (Sth Cir. 2008)................0000 14

Firestone Tire & Rubber Co. v. Bruch, 489

Be PS BO SBI on. ccccesvccecesscsssescceserees 10

Freilich v. Upper Chesapeake Health, F.3d,

Nee iat lidcansvencnicentyesereresersress 13

Gordon v. Lewiston Hosp., 423 F.3d 184

Nee icici cexecineceneersescecacssenss 12

Illinois v. Outboard Marine Corp., 680

F.20 473, 478 (7th Cir. 1982)............-00000 10

Imperial v. Suburban Hosp. Ass’n, Inc., 37

F.3d 1026, 1030 (4th Cir. 1994)................ 17

Lee v. Trinity Lutheran Hosp., 408 F.3d

I ) 14

Meyers v. Columbia/HCA Healthcare

Corp., 341 F.3d 461, 468 (6th Cir. 2003).. 13

Pegram v. Herdrich, 530 U.S. 211, 120

ee 2

TABLE OF AUTHORITIES—Continued

Poliner v. Texas Health Systems, 537 F.3d

ED sc sdsccasecenrevesoutdevsssarsves

Resolution Trust Corp., v. Frates, 52 F.3d

295, 297 (10th Cir. 1996)................ccccrseeee

Resolution Trust Corp. v. Miramon, 22

F.3d 1357, 1360 (5th Cir. 1994)................

Sugarbaker v. SSM Health Care, 190 F.3d

BOS, OIF (GG Civ. LOGD) 22. cccvcrsccccesssevsceseees

Talwar v. Catholic Healthcare Partners,

258 Fed. Appx. 800 (6th Cir. 2007)..........

United States v. Oswego Barge Corp., (In

re Oswego Barge Corp.), 664 F.2d 327,

Vistein v. American Registry of Radiologic

Technologists, 509 F.Supp.2d 666

$i hehe Ye Be es

Xin Liu v. Amway Corp., 347 F.3d 11285,

Re Me NE EE, BOO) vecccceveccessesscesescoeees

STATUTES

Health Care Quality Improvement Act of

1986 [“HCQIA”] Pub. L. No. 99-660, at

42 U.S.C. §§ 11101-11152 (1988) .............

H.R.Rep.No. 903, 99th Cong., 2d Sess.

9, reprinted in 1986 U.S. Code Cong. &

NIE TIED occ ssscoverscnsaveossessnrcesoreseees

Fe Fe Ws © BGO) cocceccccccesevsessscsecosensees

1986 U.S. Code Cong. & Admin.News

Page

2,15

TABLE OF AUTHORITIES—Continued

SCHOLARLY AUTHORITY

Charles I. Artz’s, Swinging Pendulum of

Peer Review Immunity (App. G)..............

JCAHO Bulletin, "Behaviors that Under-

mine a Culture of Safety," (July 9, 2008).

Lucian Leape , To Err Is Human, Institute

Ee BE CI vcebnccccehanssinssasccncecessocons

Lisa Sprague, Hospital Oversight in

Medicare: Accreditation and Deeming

Authority, National Health Policy

Forum, NHPF Issue Brief No. 802/May

RRS ee ecco geen ee

Michael Myers, 51 S.DAK.LAWREV 465

III 11604, da selesicuiencshnbcatusguiagiabcuedisemadaletiiadets

Shannon Brownlee, Overtreated (2007)......

Van Geertruyden: Fox in the Henhouse

Page

IN THE

Supreme Court of the Gnited States

No. 08-543

LAWRENCE R. POLINER, M.D., AND

LAWRENCE R. POLINER, M.D., P.A..,

Petitioner,

Vv.

TEXAS HEALTH SYSTEM, DOING BUSINESS AS

PRESBYTERIAN HOSPITAL OF DALLAS, TEXAS, A TEXAS

NON-PROFIT CORPORATION, AND JAMES KNOCHEL, M.D.,

Respondent.

On Petition for a Writ of Certiorari to the

United States Court of Appeals

for the Fifth Circuit

BRIEF OF AMICUS CURIAE SEMMELWEIS

SOCIETY INTERNATIONAL, INC.

INTEREST OF AMICUS CURIAE

Amicus SEMMELWEIS SOCIETY INTERNA-

TIONAL, INC. (SSD is a non-profit organization of

physicians, nurses, and healthcare professionals. SSI’s

mission is to promote better-safer-less-costly health-

care for all Americans.’

SSI encourages healthcare professionals to work

conscientiously for patients’ welfare and safety, and

‘No contributions by parties.

to advocate for appropriate patient treatments, even

when pressured by hospitals and physician-colleagues

to over-or-undertreat patients. When doctors, nurses,

and technicians are effectively shielded from retalia-

tion, on-site professionals can follow their ethical

duties and put the patient first. Now, per Poliner uv.

Texas Health Systems, 537 F.3d 368 (5th Cir. 2008),

the Health Care Quality Improvement Act (42 U.S.C.

§ 11111 et seq. (1986)(HCQIA)), empowers manage-

ment to openly retaliate against conscientious physi-

cians without accountability.

This Court ruled in Pegram v. Herdrich, 530 U.S.

211, 219-220 (2000), that physicians are expected to

ignore pressures to undertreat patients and provide

“covered services with a reasonable degree of skill

and judgment in the patient’s interest.” Pegram

involved financial incentives if physicians delayed

tests, but Poliner takes Pegram to extremes by ex-

pecting physicians to serve patients’ best interests

after stripping away doctors’ few remaining HCQIA

protections against badfaith peer-review.

Departing from prevailing interpretations by other

federal circuits (see below), Poliner allows unprece-

dented use of medically questionable evidence to pro-

claim peer-reviewers’ actions immune from damages.

Presbyterian’s peer-review actions against Dr. Poliner

were held “objectively reasonable,” even though the

jury specially found that peer-reviewer malice and

badfaith drove the adverse actions. Yet the Fifth

Circuit overruled the jury, affirming peer-reviewers’

badfaith actions as “objectively reasonable” (Poliner

v. Texas Health Systems 537 F.3d at 379-380, 384-

385).

ISSUES PRESENTED

Amicus requests consideration of three related

issues.

‘

Because Poliner interprets HCQIA’s “objec-

tively reasonable test” for peer-reviewer immu-

nity contrary to several other circuits by sub-

stituting common ltaw fiat for clearly worded

statutory and legislative intent, ought this

‘Court resolve the conflicts?

For the great majority of hospitals who elect

Joint Commission on Accreditation of Health-

care Organizations (JCAHO) accreditation as

final federal certification to deem them compli-

ant with MEDICARE Conditions-of-Participa-

tion (CoP) and automatically eligible for

MEDICARE payments, are JCAHO accredita-

tion standards binding regulations governing

patient care and peer-review for clinical

privileging?

Because the Poliner decision was only eight

days after Congress declared on July 15, 2008

that JCAHO had “unique deeming authority”

to certify and deem hospitals MEDICARE-

compliant, which precluded the Fifth Circuit’s

considering how JCAHO standards for peer-

review proceedings may regulate clinical privi-

leging by suffusing HCQIA’s fairness and due

process guarantees for peer-reviewed physi-

cians, should the decision-timing issue be con-

solidated with this Court’s determining how

HCQIA ought to be interpreted?

BACKGROUND OF PHYSICIAN

DUE PROCESS ISSUES

Besides stopping physicians from monitoring pa-

tient care and safety, Poliner has silenced those best

situated to report healthcare overtreatment and

MEDICARE fraud. Doctors rarely talk about it,

but they all know what happens if they question or

report billings for unnecessary treatment or other

MEDICARE fraud.’

Michael J. Myers, healthlaw and healthcare busi-

ness administration professor, spent 17 years as

counsel and CEO of nonprofit hospitals before return-

ing to university. He understands the organizational

and financial forces driving healthcare. In March

2008 (four months before the Poliner decision), Myers

gave an example from a hospital operated by the

Mayo Clinic.

[Tlhe fundamental corporate restructuring the

United States healthcare system has undergone,

since the enactment of HCQIA .. . [has] implica-

tions for physicians who now overwhelmingly are

“employees” of large, integrated, and economi-

cally and politically influential healthcare sys-

tems. We should dwell upon the influence of

such corporate integration upon physician behav-

* Yann Van Geertruyden, in The Fox Guarding The Henhouse:

How The Health Care Quality Improvement Act of 1986 and

State Peer Review Protection Statutes Have Helped Pro-

tect Bad Faith Peer Review In the Medicai Community, 18

J.Contemp.Health Law 239 (2001), told Alan Uliberg how his

physician-father suffered badfaith peer-review when he refused

to join a medical group, a family experience that informed the

son of badfaith peer-review (and too-credible threats of it) as the

“problem in the medical profession which is known by many, but

spoken of by few.”

ior and increased risk for a physician who does

not adhere to the clinical and financial forces

that drive system profitability. Last semester I

had a former Mayo pediatric oncologist confirm

how corporatization of Mayo has affected clinical

judgment and [physician] autonomy. The em-

ployed physician who suggests that certain diag-

nostic and surgical procedures may be unneces-

sary and not in the best interests of patient care

may be frustrating utilization targets and under-

mining the “production” incentives found in the

contracts of employed physicians. The CEO/CFO

and Medical Director will likely be offended with |

such conduct, as will fellow physicians who stand

to profit from increased “clinical production.”

Poliner heightens what Professor Myers calls the

. increased risk for a physician who does not

adhere to the clinical and financial forces that drive

system profitability.” Since Poliner, any evidence

hospital managers put in the record that indicates a

targeted physician may have provided substandard

patient care, will support a peer-review action even if

the fact finder establishes malice and badfaith.

A physician can win at trial only to have an

appellate court cherry pick evidence from the record

to make its de novo finding of “objective reasonable-

ness.” Affirming badfaith peer-review actions plays

right into the hands of the managers of hospitals,

profit and nonprofit, increasingly driven by the

bottom line,‘ :

“

* E-mail to Alan Ullberg from Professor Myers, March 25,

2008, in Ullberg’s files.

‘Michael Myers, 51 S.Dak.L.Rev. 465, 466 (2006), comment-

ing how nonprofit regional hospitals “typically enjoy oligopolistic

Doctors are human. They make mistakes just like

everyone who drives a car. It is well known among

police officers that closely observing any driver will

reveal a continuous series of inconsequential techni-

cal infractions. A trained police officer can appear in

court and present his observations as “key evidence”

to support a judgment of “safety risk.” A reviewing

court will likely affirm the trial court’s judgment

based on that finding. Under this scenario, any

driver can be adjudicated “unsafe,” just like any

physician can be adjudicated a patient-safety risk.”

The Fifth Circuit’s extreme standard for HCQIA

judicial review allows an appellate court of lay judges,

not trained in medicine, to make medical judgments.

Judges affirm and immunize medically sloppy, bad-

faith peer-review actions driven by malice, which can

destroy a physician’s reputation and career for being

human. MHandpicked “evidence” from the record

sustains peer-reviewers’ malicious actions as “objec-

market power in a region . . . [so] physicians, executives, board

members, and their aligned business interests are able to place

private interests ahead of their presumed public interest with-

out significant risk of detection or penalty. These modern,

multi-billion-dollar health systems earn revenues .. . to accom-

modate their collective interests, attracting an array of entre-

preneurial constituents because, to quote bank robber Willie

Sutton, that is ‘where the money is.’ ... These . . .are

bottomless, in part, because of the conflicts between the stated

missions of hospital systems and their actual performance in the

market.”

* Shannon Brownlee, Overtreated: Why Too Much Medicine Is

Making Us Sicker and Poorer (2007), quoting a surgeon that

“good doctors make mistakes too. . . .[E]lvery physician is

destined to make at least one horrible mistake in the course of a

career—and most will carry the memory and shame of it for the

rest of their lives.” (p. 53).

tively reasonable.” The kangaroo court-type peer-

review affirmed in nearly all HCQIA cases is com-

pletely different from the “Objective, evidence-based

decisions regarding appointment to the membership

on the medical staff,” that JCAHO standards pre-

scribe.°

Officers and members of SSI attest that, in less

than four months, “The Poliner Principle: “Any

evidence of bad medicine, no matter how contrived or

flimsy, will support badfaith peer-review actions that

are totally unaccountable,” has chilled the medical

community.

There is even less chance than before Poliner that

those few doctors who might have broken their

silence to save a patient from death or serious injury’

will take the ultimate risk of career and medical

license to save a patient’s life.°

SSI fully supports goodfaith peer-review. Being

human, physicians can become impaired, disruptive,

or lose their medical skills. But Poliner allows all

physicians to be smeared as “unsafe,” “impaired,” or

* In a July 09, 2008 bulletin, Applicable Joint Commission

Standards (see Appendix JCAHO describes generally

the Medical Staff Standard (MS.4.00) for “. . . maintenance of a

credible process to determine competency... .” That is an

objective, professional-medical inquiry, only superficially resem-

bling peer-review actions reviewed and affirmed by lay judges.

” SilenceKills.com (see appendix ) reports that less than

10 % of physicians speak out when they see medical errors, even

life-threatening errors. White Coat of Silence describes nurses’

reluctance to report what they see. (Appendix )

* See Charles I. Artz’s paper, (appendix ), noting how

mandatory reports to a central data bank of the results of

clinical privileging proceedings can ruin a good doctor.

“disruptive, because they have been effectively

stripped of HCQIA fairness and due process rights.

While the stated objective of peer-review is to

protect patients by improving the pool of praccicing

physicians (good doctors weeding out bad doctors),

trending federal court decisions culminating in Poliner

immunize illegitimate peer-review actions so it is the

bad doctors who are both empowered and protected

by HCQIA immunity. Because bad doctors bring in

more money than good doctors,” hospitals are finan-

cially pressed to encourage their bad doctors to drive

out their good doctors.

The principle in Poliner of gravest concern to Amici

is the near-absolute deference to peer-reviewers

regardless of their motives. Peer-reviewers and the

hospital managers who control the peer-review

process can professionally discredit any doctor for

trumped up reasons; yet such actions are affirmed

because any flimsy allegation of substandard medi-

cine meets the Poliner test. Hospital managers can

credibly threaten otherwise-good physicians with vir-

tually unchallengeable peer-review actions so they

act like sheep instead of watchdogs.

Consequences from Poliner will continue the high

rate of preventable, hospital and physician-caused

patient deaths and medical-error injuries. The 1999

study by the Institute of Medicine found there are

nearly 100,000 medically-caused patient deaths per

year.” Each year about 80,000 patients still die

* Brownlee, supra, at p. ) (appendix____) for an example

how good programs for patient treatment and safety often fail

because cost-effective treatment, by definition, is not a big

money-maker.

’ Lucian Leape, M.D. MPH, Appendix

unnecessarily, deaths preventable if available know]-

edge and techniques had been applied.’ Bad medi-

cine also costs payers more including the taxpayers.”

As a percentage of the Gross National Product,

current healthcare spending is about 17 % of Gross

National Product and rapidly rising. Physicians, the

most knowledgeable and acute onsite monitors of

cost-benefit-balanced patient treatment plans ori-

ented to economy, no longer can speak up and chal-

lenge excessive treatments and overbillings. Even

when they know their hospital is committing massive

MEDICARE fraud, they cannot afford to risk career

and license just to save taxpayers a few hundred

million dollars.”

Poliner impacts healthcare quality, safety and cost.

ARGUMENT

I. THE COURT SHOULD GRANT THE PETITION

To RESOLVE WHETHER THE HEALTH CARE

QUALITY IMPROVEMENT ACT HAS BEEN

DISPLACED BY FEDERAL COMMON LAW

The decision below conflicts with decisions of other

federal courts of appeals. It is also utterly inconsis-

tent with this Court’s enduring teaching that federal

common law is displaced where Congress has directly

spoken to a particular subject matter.

Where, as here, “Congress addresses [a] problem

formerly governed by federal common law,” courts

HealthGrades, Appendix

” Overtreated, p.__, Appendix a

“The personal and professional consequences to Patrick

Campbell, M.D., an unwelcome and unappreciated MEDICARE

fraud reporter, are described in Overtreated, p.__, Appendix _.

must construe the federal statute at issue with a

“willingness to find congressional displacement of

federal common law.” City of Milwaukee uv. Illinois,

451 U.S. 304, 317 & n.9, 315 n.8 (1981) (“Milwaukee

IT”) (emphasis omitted). This principle exists because

our system of justice dictates that it is for Congress,

not the federal courts, to articulate the appropriate

standards to be applied as a matter of federal law.”

Id. at 317. As other courts of appeals have recog-

nized, “once Congress has addressed a national

concern, our fundamental commitment to the separa-

tion of powers precludes the courts from scrutinizing

the sufficiency of the congressional solution” or “hold-

ing that the solution Congress chose is not adequate.”

Illinois v. Outboard Marine Corp., 680 F.2d 473, 478

(7th Cir. 1982); see Milwaukee II, 451 U.S. at 324.

See also United States v. Oswego Barge Corp., (In re

Oswego Barge Corp.), 664 F.2d 327, 335 (2d Cir.

1981) (“separation of powers concerns create a

presumption in favor of [displacement] of federal

common law whenever it can be said that Congress

has legislated on the subject”).

Federal common law is displaced by direct congres-

sional treatment of an issue even if Congress does not

expressly state it is displacing common law. See

Resolution Trust Corp., v. Frates, 52 F.3d 295, 297

(10th Cir. 1995) (*. . . to supersede authority previ-

ously established by federal judicial ruling, Congress

need not affirmatively proscribe that authority, but

may do so simply by speaking directly to the issue”);

Milwaukee II, 451 U.S. at 313-15; Resolution Trust

Corp. v. Miramon, 22 F.3d 1357, 1360 (Fifth Cir.

1994). This Court has already made clear these

principles govern federal statutory interpretation as

a general rule. Firestone Tire & Rubber Co. v. Bruch,

489 U.S.101, 108 (1989) (quoting Russell, 473 U.S. at

146). See also Xin Liu v. Amway Corp., 347 F.3d

1125, 1133 n.6 (9th Cir. 2003) (interpreting Congres-

sional intent under FMLA).

The conflict between federal common law and Con-

gressional intent is illuminated by the Fifth Circuit’s

decision in the Poliner case, as it amplifies the

diversity amongst Circuit Courts of Appeal in their

interpretations of HCQIA immunity provisions

intended by Congress. (42 U.S.C. § 11101-11152

(1988)). Specifically, federal appeals courts have vari-

ously interpreted section 11112(a) of HCQIA, which

reflects Congress’s intent “to encourage good-faith

professional review activities of healthcare entities”

by offering immunity protections for professional re-

viewers, “unless the good faith presumption is

rebutted by a preponderance of the evidence.”

Although lower courts have recognized that Con-

gress intended section 11112(a) (4) of HCQIA to

provide immunity for an action only if taken “in the

reasonable belief that the action was warranted by

the facts known,” many Circuit Courts of Appeal

have ignored that Congress intended certain fairness

standards out of a concern that immunity under

HCQIA “might be abused and serve as a shield for

anti-competitive economic actions under the guise of

quality controls....” H.R.Rep.No. 903, 99th Cong., 2d .

Sess. 9, reprinted in 1986 Code Cong. & Admin.News

6391. The result of this varied interpretation by

Circuit Courts has been contradictory federal com-

mon law, which attempts to displace Congressional

intent behind HCQIA. See 1986 Code Cong. & Admin.

News 6392-93). A few notable decisions in the Third,

Fourth, Sixth, Eighth and Eleventh Circuits are

illustrative of this fact.

The Third Circuit Court in Bhatt v. Brownsville

General Hosp., 236 Fed. Appx. 764 (3rd Cir. 2007)

has been consistent, in principle, with the dissenting

opinion in Austin v. McNamara, 979 F.2d 728, 733

(9th Cir. 1992)"* by acknowledging that some inquiry

into the subjective belief or potential actual malice of

professional reviewers must be made when determin-

ing whether a “goodfaith reasonable belief” existed in

a peer-review action. Bhatt v. Brownsville General

Hosp., 236 Fed. Appx. 764 (3rd Cir. 2007). Likewise,

the Third Circuit would grant a professional review

body immunity only from civil damages and thus

wrestles with the question of whether summary

judgment is appropriate when an anti-trust action is.

alleged. Gordon v. Lewiston Hosp., 423 F.3d 184 (3rd

Cir. 2005). Therefore, the Third Circuit would

appear to allow some factual inquiry into ill will or

hostile motivations of peer reviewers.

On the other hand, the Fourth Circuit Court in

- Braswell held that “reasonableness” of a belief giving

rise to the immunity provisions of HCQIA is deter-

mined by quality of investigation by the peer-review

body. Braswell v. Haywood Regional Medical Center,

234 Fed. Appx. 47 (4th Cir. 2007). Likewise, the

Fourth Circuit has held that this “reasonable belief”

standard of HCQIA is satisfied if “the reviewers, with

the information available to them at the time of the

professional review action, would reasonably have

concluded that their action would restrict incompe-

“* Austin v. McNamara, 979 F.2d 728, 733 (9th Cir. 1992)

(stating that Congress intended effective peer-review to improve

quality of medical care)

tent behavior or would protect patients.”"’ Therefore,

the Fourth Circuit looks at the totality of the process

plus the fundamental fairness and due process of an

investigation leading up to the peer-review, as held in

Freilich v. Upper Chesapeake Health, 313 F.3d. (2002).

Similarly, the Sixth Circuit court in Meyers v.

Columbia/HCA Healthcare Corp., 341 F.3d 461, 468

(6th Cir. 2003), has announced that HCQIA creates

an “unusual summary judgment standard.” That is,

“might a reasonable jury, viewing the facts in the

best light for [the plaintiff], conclude that he has

shown, by a preponderance of the evidence, that

the defendants’ actions are outside the scope of

§ 11112(a)?”"* Accordingly, under Meyers, the plain-

tiff has the burden of overcoming the presumption of

immunity by showing that the review process was not

reasonable, but retains the right to rebut this pre-

sumption.” But later, Sixth Circuit joined the Third

Circuit in Talwar v. Catholic Healthcare Partners,

258 Fed. Appx. 800 (6th Cir. 2007), which holds that

the presumption of immunity may be rebutted by a

showing of actual malice that is the standard for

determining “objective reasonableness”. Talwar v.

Catholic Healthcare Partners, 258 Fed. Appx. 800

'* Bryan, 33 F.3d at 1323 (citing H.R.REP. NO. 903, at 10,

reprinted in 1986 U.S.C.C.A.N. at 6392-93). It is an objective

standard, rather than a subjective good faith requirement.

Id. (citing Austin, 979 F.2d at 734); Imperial v. Suburban

Hosp. Ass’n, Inc., 37 F.3d 1026, 1030 (4th Cir. 1994). See Vistein

v. American Registry of Radiologic Technologists, 509 F.Supp.2d

'° Meyers v. Columbia/HCA Healthcare Corp., 341 F.3d 461,

468 (6th Cir. 2003)(citing Bryan v. James E. Holmes Reg’l Med.

Ctr., 33 F.3d 1318, 1333 (llth Cir. 1994)(quoting Austin v.

McNamara, 979 F.2d 728, 734 (9th Cir. 1992)).

" Id.

(6th Cir. 2007). Therefore, the Sixth Circuit would

allow evidence of intentionally malicious behavior

surrounding a peer-review to rebut the presumption

of immunity under HCQIA. Conversely, the Eighth

Circuit in Estate of Blume, grants professional review

body immunity only from civil damages and thus

contemplates whether a physician should be entitled

to absolute immunity from suit resulting from a

sham peer-review action. Estate of Blume v. Marian

Health Center, 516 F.3d 705 (8th Cir. 2008). Like-

wise, the Eight Circuit recognizes an aggrieved physi-

cian’s right to seek judicial remedies under HCQIA,

which does not allow money damages, only equitable

relief. Jd. However, another Eighth Circuit Court of

Appeals decision in Lee v. Trinity Lutheran Hosp.,

408 F.3d 1064 (8th Cir. 2005) fails to follow its prior

analysis and simply holds that a reasonable and thus

fair investigation by the hospital supports determina-

tion of a “reasonable belief,” and thus immunity

under HCQIA. Lee v. Trinity Lutheran Hosp., 408

F.3d 1064 (8th Cir. 2005). Consequently, the Eighth

Circuit looks only to the fairness of the overall peer-

review process.

In Bolt v. Halifax Hosp. Med. Ctr., 891 F.2d 810,

821 (11th Cir.) the Eleventh Circuit defines “objec-

tively reasonable” as the instance when no “reason-

able medical reviewer” would have reached the same

conclusion regarding the legitimacy of a peer-review

action. Bolt v. Halifax Hosp. Med. Ctr., 891 F.2d 810,

821 (11th Cir.). Likewise, in Bryan the Eleventh

Circuit observes that an extensive trial record sup-

ported reasonable belief that a peer-review action

was taken in goodfaith. Bryan v. James E. Homes

Reg! Med. Ctr., 33 F.3d 1318, 1326-1329 (11th Cir.

1994). The Bolt and Bryan cases illustrate how the

Eleventh Circuit equates a finding that an “objec-

tively reasonable belief” is a factual one that might be

left for the jury.

The Circuit Courts of Appeal are independently

deciding, on a case-by-case basis, what Congress

intended under HCQIA. They all profess to uniformly

impose an objective standard of “reasonableness,” but

differ widely in the degree to which they consider

subsidiary issues of fact or the statute’s requirement

to afford “adequate notice and hearing procedures.””

Lacking guidance there has emerged an inconsistent

body of law, preventing a clear legal definition and

understanding of this “objectively reasonable” stan-

dard. Poliner is a culmination of courts’ confusion

and trend toward interpreting Congressional intent

under HCQIA as granting absolute immunity to peer

reviewers. Despite evidence of malice or political and

economic competition in peer-review actions, Poliner

held, “(OJur sister circuits have roundly rejected the

argument that such subjective motivations overcome

HCQIA immunity, as we do” (537 F.3d at 379-380).

However, this holding by the Fifth Circuit goes much

further than any prior decision in the Circuits by

holding that the “objective test” means underlying

motives and malice of peer reviewers are irrelevant

in deciding whether peer reviewers are entitled to

HCQIA immunity or not. Jd.

As illustrated, Poliner is inapposite of most other

Circuit Courts because, unlike its sisters, it elimi-

nates HCQIA’s requirement of fundamental fairness

by peer-reviewers. The Fifth Circuit finalized a trend

by the courts, which will hold that “the good or bad

° Supra

faith of the reviewers is irrelevant. Courts are

more likely to deny the possibility that there might

be some point at which a belief is not “reasonable;””’

or that will satisfy a Plaintiffs burden, which rebuts

the presumption of immunity under HCQIA as Con-

gress intended.

»19

Poliner * purports to uphold the due process and

equal protection rights of disciplined physicians, but

then boldly implies there is no set of facts that will

allow a physician to rebut the “objectively reason-

able” standard of HCQIA. In doing so, Poliner has

finally announced a standard which displaces Con-

gressional intent under HCQIA and flatly denies

admissibility of any evidence relevant to rebut the

presumption that the defendants possessed a “rea-

sonable belief” the peer- review action was warranted

by the facts known.” 11

* Poliner v. Texas Health Systems, 537 F.3d 368, 378 (Fifth

Cir. 2008).

” Id. (citing Brader v. Allegheny Gen. Hosp., 167 F.3d 832,

840 (3rd Cir. 1999).

* Poliner, 537 F.3d at 378 (holding any action taken with

stated purpose of protecting health care is entitled to HCQIA

immunity protections). See also Sugarbaker v. SSM Health Care,

190 F.3d 905, 912 (8th Cir. 1999)(citing Brader v. Allegheny

Gen. Hosp., 167 F.3d 832, 839 (3rd Cir. 1999)(quoting Bryan v.

James E. Holmes Reg’l Med. Ctr., 33 F.3d 1318, 1334 (11th Cir.

1994), cert denied, 514 U.S. 1019, 115 S.Ct. 1363, 131 L.Ed.2d

220 (1995)).

” See Sugarbaker v. SSM Health Care, 190 F.3d 905, 912 (8th

Cir. 1999)(citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242,

255, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986) (holding that factual

dispute regarding reasonableness requires submission to jury);

Austin v. McNamara, 979 F.2d 728, 734 (9th Cir. 1992)(holding

that the standard is whether a reasonable jury would find

Defendant’s actions outside scope of § 11112(a)).

No allegation of incompetence in a peer-review

action needs to be true;.a mere allegation against a

physician in a peer-review action will be sufficient to

call a doctor incompetent and destroy his medical

practice. However, beware, because if mere allega-

tion is sufficient, then no physician will be judged

competent because Poliner allows peer-reviewers to

cherry pick “facts” to support badfaith, sham peer-

review actions against any physician.”

Poliner displaces Congressional intent under HCQIA

and seeks to replace it with federal common law,

denying fundamental rights of “physicians [to] re-

ceive fair and unbiased review [and] to protect their

reputation and medical practices.” 1986 Code Cong.

& Admin.News at 6393. This extreme Poliner Rule

must be wound back to where the § 11112(a)(4) “rea-

sonable belief’ on the part of the peer-reviewers

required to enjoy § 11111(a)(1) immunity is based on

all facts in the record, as Congress intended.

The Poliner Court goes on to inconsistently hold it

is an objective inquiry that considers the totality of

the circumstances, citing Imperial v. Suburban Hosp.

Ass’n, Inc., 37 F.3d 1026, 1030 (4th Cir. 1994). It also

did not matter to the Fifth Circuit that the patient

care demanded by the peer-reviewers may not actu-

ally be beneficial, in fact harmful, to a patient.

® Poliner v. Texas Health Systems, 537 F.3d 368 (Fifth Cir.

2008)(stating “(I]t bears emphasizing that ‘the good or bad faith

of the reviewers is irrelevant’ (citing Brader v. Allegheny Gen.

Hosp. 167 F.3d 832, 840 (3rd Cir. 1999)). Nevertheless, the

Poliner Court goes on to inconsistently hold that it is an objec-

tive inquiry in which we consider the totality of the circum-

stances citing Imperial, 37 F.3d at 1030. It also did not matter

to the Fifth Circuit that the care demanded by the reviewers

may not actually be beneficial, or in fact harmful, to a patient.

II. MEDICARE IMPROVEMENTS FOR PATIENTS

AND PROVIDERS ACT OF 2008, REQUIRES A

SHIFT IN INTERPRETING HCQIA’s FAIRNESS

AND DUE PROCESS STANDARDS FOR PEER-

REVIEWED PHYSICIANS. AFTER JULY 2008,

HCQIA Must BE INTERPRETED ACCORDING

To JCAHO STANDARDS ISSUED AND EN-

FORCED PURSUANT TO EXPRESS STATUTORY

DELEGATION TO JCAHO FROM THE SECRE-

TARY OF HEALTH AND HUMAN SERVICES.

Procedural aspects of Poliner are like Kennedy uv.

Louisiana (decided June 25, 2008, rehearing consid-

ered, but modified October 1, 2008). Kennedy held the

death penalty could not be imposed for rape of a

child, not knowing Congress had amended the Uni-

form Code of Military Justice in 2006 to provide

the death penalty for military personnel convicted of

child rape.

Similarly, Poliner was decided by the Fifth Circuit

July 23, 2008, with no awareness by the parties or

the Court that Congress passed a law eight days

before, on July 15, 2008, fundamentally changing

HCQIA’s fairness and due process requirements for

peer-reviewed physicians. No one realized the effect

of the Congressional action until after the time for

reconsideration expired on August 6, 2008.

Ili. HCQIA’s DUE PROCESS, EVIDENTIARY, AND

RELATED FAIRNESS REQUIREMENTS

HCQIA profoundly affects how hospitals conduct

peer-review proceedings, setting minimum fairness

and due process standards that peer-reviewers and

peer-review actions must meet to qualify for immu-

nity. What is “fair” to the physician (§ 11112 (a)(3))

or appropriate due process depends on the baseline

assumptions pervading these statutory guarantees,

in the factual circumstances under review. Until

Congress spoke, courts looked to HCQIA, plus judi-

cial interpretations of the fairness and other notice

and due process protections Congress expressly pro-

vided physicians who are peer-reviewed.

Unfortunately, courts interpreted HCQIA fairness

and due process without understanding that the Act’s

general fairness and due process requirements have

been implemented by a comprehensive set of regula-

tions. These regulations implementing HCQIA’s

fairness and due process guarantees have been

issued in the form of standards for accrediting hospi-

tals that elected to be regularly surveyed and

accredited by JCAHO.

By statute (42 U.S.C. § 1395bb) hospitals have the

option to be inspected by MEDICARE regulators to

be certified as eligible to receive MEDICARE pay-

ments, or be accredited by JCAHO.

Instead of federal HHS inspectors periodically in-

vestigating whether MEDICARE payment standards

are met, nearly all hospitals have elected to be

regularly surveyed and accredited by JCAHO. The

practical and legal advantage for a hospital is that

JCAHO holds delegated governmental power to

issue an automatic, immediate and final certification

of MEDICARE-compliance. Hospitals can receive

MEDICARE payments without submitting to inspec-

tion by federal MEDICARE inspectors.

Because of a statute passed in 1965 (42 USC

§ 1395bb, below) JCAHO accreditation is final.

Accreditation is binding on HHS and MEDICARE

managers because JCAHO certification “deems” a

hospital MEDICARE-compliant. Once JCAHO ac-

credited a hospital, §1395bb did not allow MEDICARE

to inspect that hospital to determine if it met

MEDICARE rules, called “Conditions of Participation”

(CoP). It was not until summer 2008 that HHS

regained its deeming authority Congress delegated

exclusively to JCAHO in 1965.

Although in legal reality the clinical privileging of

physicians was governed by JCAHO accreditation

standards used to deem hospitals eligible for

MEDICARE dollars, neither healthcare attorneys nor

the courts understood that JCAHO holds and exer-

cises government powers. JCAHO has federal func-

tions similar to other quasi-government delegatees

like the New York Stock Exchange and the National

Association of Securities Dealers (now the Financial

Industry Regulatory Authority, FINRA) that regulate

securities’ transactions for the federal government.

It was not until after Congress passed the Medicare

Improvements for Patients and Providers Act (HR

6331), that healthcare attorneys began to understand

that JCAHO hospital accreditation standards and

yearly updates govern patient care including grant-

ing or modifying physicians’ clinical privileges.

By a reverse legislative act, revoking the existing

delegation to JCAHO of HHS’s powers, Congress de-

clared that JCAHO has held and exercised govern-

mental authority. A power must exist to be revoked;

and the title of § 125 of HR 6331, was: “REVOCA-

TION OF UNIQUE DEEMING AUTHORITY OF

JCAHO.”

Since § 125 of H.R. 6331 was passed, we now know

that since 1965 JCAHO standards have been, are,

and will be until 2010, far more than guidelines for

hospitals’ management of their medical staffs, for

terms and due process requirements in medical staff

bylaws, and the care and safety of patients. By

revoking in very express language the delegation of

“unique deeming authority,” Congress finally made

clear that JCAHO is, until 2010, HHS’s agent for

deeming MEDICARE eligibility.

The consequence of this recognition is that JCAHO

issuances and updates in the form of accreditation

standards have served as federal (and state, see

below) patient care and physician clinical privileging

regulations.

These regulations, issued in the form of “accredi-.

tation standards,” govern all JCAHO-accredited-

Medicare-eligible hospitals. JCAHO’s Comprehensive

Accreditation Manual for Hospitals (CAMH) and its

frequent updates are the law for JCAHO-accredited

hospitals as to patient care and safety and related

activities like managing their medical staffs, clinical

privileging, and peer-review.

When Medicare began in 1965, the Department of

Health, Education and Welfare (HEW, now Health

and Human Services [HHS]), lacked in-house exper-

tise to establish and update standards for hospitals’

eligibility for MEDICARE payments.

HEW looked to JCAH, a nonprofit formed in 1951

by medical and hospital associations then operating a

national accreditation program. JCAH already had

the expertise and structure to promulgate, update

and enforce hospital standards. By 1965, JCAH

surveyed and accredited about 60 % of U.S. hospitals.

So that MEDICARE funds were not paid to sub-

standard hospitals, Congress delegated to JCAH—

almost entirely in many respects—the (HEW) Secre-

tary’s statutory authority to determine which hospi-

tals met MEDICARE requirements. “JCAHO stan-

dards, in fact, became the original CoP”™. As passed

in 1965, §1395bb of 42 U.S.C. provided (with excep-

tions not relevant here):

... Uf... an institution is accredited as a

hospital by [JCAHO], and

... {the Jecretary or a State agency the Secre-

tary may designate is provided] . . a copy of the

most current accreditation survey of such

institution ... then, such institution shall be

deemed to meet [MEDICARE Conditions

of Participation, as provided in 42 U.S.C.

§ 1395x et al.]. (Emphasis added).

CAMH standards for medical staff bylaws and

physician credentialing have not been advisory stan-

dards as most healthcare attorneys and courts as-

sumed. Despite the failure of attorneys and courts to

comprehend until Congress so declared, JCAHO has

had governmental powers.

Congress did not pass new language and try to

make it retroactive. It simply re-interpreted §1395bb

by clearly stating JCAHO has had “Unique Deeming

Authority.” After § 125 is in effect, JCAHO and its

accreditation decisions based upon its published

regulatory standards

. may [be] . . . recognize[d] . . . upon such

terms and conditions, and upon submission of

such information, as the Secretary may require”

(H.R. 6331, § 125 (c)).

Texas also accepts accreditation in lieu of State

inspection and certification (Health and Safety Code,

“ Lisa Sprague, Hospital Oversight in Medicare: Accredita-

tion and Deeming Authority, National Health Policy Forum,

NHPF Issue Brief No. 802/May 6, 2005, p. 4.

§ 222.024), making JCAHO standards Texas hospital

law for JCAHO-accredited hospitals. When they

submit to the jurisdiction of JCAHO, hospitals bind

themselves to follow relevant JCAHO policies as a

matter of federal and Texas law.

Judicial recognition that JCAHO standards govern

hospitals, starting with correcting the underlying

legal mistake in Poliner, will reverse the trend of

peer-review cases decided under HCQIA. Badfaith or

economically motivated peer review, and flimsy find-

ings of substandard care by the targeted peer-re-

viewed physicians, no longer can support judgments

based on the presumed “objective reasonableness” of

peer-review actions. From now on HCQIA’s fairness

and due process requirements for peer-review proce-

dures and peer-review actions must be read in the

context of JCAHO credentialing standards viewed as

controlling law. CAMH requires all decisions on

physicians’ privileges to be uniform, fair, and directly

related to patient care.”

This gross legal error can be corrected judicially.

HCQIA is well-written and well-intended, but 20

years of misinterpretations reversed the intended

effects, starting with the majority’s opinion in Austin —

v. McNamara, above. Judge Pregerson, the dissenter

in Austin, got it night:

Section 11112 (a) reflects Congress’s intent ‘to

encourage goodfaith professional review activi-

ties of healthcare entities” (979 F.2d at 741).

” CAMH 2000, MS.5.4.4, e.g., provides that “Decisions on

reappointments or on revocation, revision, or renewal of clinical

privileges must consider criteria that are directly related to the

quality of care.”

Once courts acknowledge that JCAHO standards

pervade and inform HCQIA, SSI will have no quarrel

with HCQIA’s language, presumptions of immunity,

or due process limitations. HCQIA was not intended

to immunize badfaith, malicious or economically

motivated peer-review. HCQIA should be interpreted

so that JCAHO physician appointment, reappoint-

ment, clinical privileging, and peer-review action

requirements inform all relevant parts of HCQIA.

Now that Congress declared when it passed HR

6331, that JCAHO standards govern all hospital

actions pertaining to physicians, it appears entirely

appropriate for this Court to correct this error that

results in so many patients dying unnecessarily and

healthcare costs rising. Good public policy can be

made simply by interpreting a statute as Congress

intended.

There is no need to amend. SSI believes HCQIA

was intended to be read parallel with JCAHO stan-

dards. When the bill was debated in the mid-1980s,

JCAHO standards were the prevailing hospital and

physicians’ standards and protections, and it was

well known that JCAHO accreditation and creden-

tialing standards and policies were updated every

year. Nothing in HCQIA says it was to be frozen in

time and interpreted separately from the continually

evolving JCAHO standards.

It is unfortunate Congress acted too late to have

these legal realities presented and argued before the

Fifth Circuit. Neither counsel nor the deciding court

was aware of Congress’ then-recent actions.

Amicus SSI respectfully prays that this Court

grants Certiorari and interprets HCQIA so physi-

cians can trust they have enforceable due process

rights to sustain the independence and free speech

protections they need to advocate for patients and

make healthcare better, safer, and cheaper.

Respectfully submitted,

PAUL S. BLUMENTHAL *

JEFFREY GRASS

Of Counsel

LAW OFFICE OF PAUL S.

BLUMENTHAL, P.A.

Suite 301, West Court Building

2448 Holly Avenue

Annapolis, MD 21401

* Counsel of Record (410) 266-2430

November 24, 2008

APPENDIX

APPENDIX A

The “White Coat” of Silence

LET’S CONSIDER A SCENARIO, that may or may

not be hypothetical—that will be for you to decide.

In an unnamed hospital, a newly appointed Chief

Nursing Officer (CNO) is hired as a change agent, or

at least that is what she is told by the hospital’s Chief

Executive Officer (CEO) and several Vice Presidents.

As a first order of business, the CNO begins to docu-

ment problem areas at the hospital. The list includes

a director of Nursing (DON) WHO prevaricates, espe-

cially when it comes to defining staffing needs;

abandonment of duty by some nurses in the chain of

command; a nurse who continues to make medication

administration errors; the failure of the computerized

charting system to perform as expected; and other

problems of the same importance.

When verbal reports to a superior fall on deaf ears

and generate responses such as “the DON is doing

what she can,” the CNO decides to write a detailed

memo outlining the problems and her recommenda-

tions. A copy of the CNO’s report the is given to the

CEO and all department VP’S including the CNO’s

direct superior. One would expect that hospital

administration would show appropriate concern for

the severity of the documented deficiencies and pain

for immediate corrective action. However, this is

a management-impaired hospital and following the

unspoken rule of the hospital following the unspoken

rule of “killing the messenger,” the CNO is sacrificed

for failing to adhere to another unspoken rule of the

hospital

By Geneviéve M. Clavreu!, RN, PhD.

Hospitals, like police departments and other

institutions, have their own codes of silence to protect

against human error—no malice, no ill intent, no

nefarious plan—just plain old human error.

and nursing administration, which is “bring us no

bad news.”

For many, the above example will have the ring of

truth, because this situation exists in their hospital

today, or in the past. There will be others who say

their hospital would never tolerate such a practice.

But the above does put a spotlight on what I have

come to call the “White Coat of Silence.”

Hospitals, like police departments and other insti-

tutions, have their own codes of silence. This code

was established to give a person some protection from

the consequences of what is often just human error—

no malice, no ill intent, no nefarious plan—just plain

old human error. However, as in police work, there’

are times when the white coat of silence is extended

to cover the mistakes of a person who is incompetent

or unethical. When this happens, the healthcare

community violates its trust with the public it serves

and bad outcomes follow.

The cloak of privacy offered by quality improve-

ment projects should not be confused with the white

coat of silence. The shield of privacy is invoked to

allow the hospital staff to freely and fully investigate

a medical or nursing mishap or error. This shield is

offered under the theory that privacy assurance will

allow the nurse or doctor, without fear of retribution

and accusation, to discuss the mistake that occurred.

This does not mean that the nurse or doctor responsi-

ble is free from consequence if an event is deemed

caused by negligence or poor care.

An effective quality improvement process leads to

an environment where patient rights and care are

placed at the forefront without relegating the nursing

and medical staff to second-class status. The white

coat, on the hand, places emphasis on protecting the

nursing and medical staff first and encourages an

environment where patient rights and care are not

the core focus of the healthcare team.

The white coat flourishes in an environment where

hospital administration and nursing management in

particular, is viewed as hostile towards good nursing

practice. This insidious code creeps into a hospital as

a defense against what is viewed by employees as

an administration that is unresponsive and often

retaliatory.

Through society may reward the whistle blower for

calling attention to malfeasance, safety issues, and,

in the case of nursing, poor or negligent patient care—

-the reality is that the administration, and in some

cases the nursing team itself, does net support the

nurse who is a whistle blower. It is an unfortunate

occurrence within nursing, and it doesn’t have to be

this way.

I was having lunch with a nurse whom I had

known and worked with many years ago. Catching up

on old times we chatted about the numerous experi-

ences and frustrations our many years of nursing had

brought us. She shared with me an experience she

had one night many years ago at one of Los Angeles

finest hospitals.

She and five other nurses, a tech, and two doctors

were preparing to move a patient into surgery. The

need for surgery was immediate and urgent, and as

they prepared the patient one of the doctors handed

her a pre-filled syringe and ordered that she adminis-

ter it to the patient. Since she did not draw the

medication and, therefore, did not know what was in

the syringe she asked the doctor what the syringe

contained. He refused to tell her, stating instead that

without it the patient would suffer ill effects and that

she had t administer it.

Of course she refused, and stated that the physi-

cian should administer it instead. He refused and

then ordered one of the other nurses to do it. After

much haranguing and brow beating one of the other

nurses acquiesced and administered the injection of

the mystery drug. Afterwards, she reported the oc-

currence to nursing service; each of the other five

nurses confirmed her story and supported her com-

plaint. But the tech and the mystery syringe doctor

both developed amnesia. Shortly after the complaint,

the six nurses began to find themselves pressured t

find other employment-—the white coat of silence

strikes again.

A reasonable person might have thought that the

doctor who insisted that the nurse administer an

unidentified drug would have been the one to be

made to suffer for his unprofessional and possibly

dangerous actions, but cf course, hospital manage-

ment is not always known for reasonable behavior.

What happened to my friend and the other nurses

is the byproduct of poor and weak mianagement, not

an uncommon occurrence in the hospital setting.

All too often a nurse who makes a complaint about

another nurse or doctor is made to weigh in advance

the possible repercussions to herself. Often the act of

reporting their suspicions to the charge nurse or head

nurse is enough to mark the nurse as a troublemaker

and thus, a potential victim of kill the messenger

syndrome. Poor managers often feel threatened by

the nurse who steps forward, especially if the nurse

being reported is perceived by nursing management

as a hard worker.

The weak manager often confuses the nurse who is

willing to work any and all shifts, multiple days,

fetch coffee, run errands, with being a nurse, when in

reality this nurse is usually a sycophant who is

undermining the esprit de corps. A consequence of

the sycophant’s behavior is that the manager often

rewards them for being a teacher’s pet while the very

real concern of the whistle blower is ignored and the

whistle blower is the one who is punished. It only

takes one or two negative consequences before the

nursing staff gets the message. Good nurses start

updating their resume or, worse, stop caring.

Does the white coat have no rule nursing practice

in our hospitals? Of course not! Most nurses abhor

the thought of poor nursing care being hidden, yet

feel totally helpless to do anything about it for fear of

losing their job or, worse yet, their license.

The white coat thrives in two environments: where

there is

Reporting suspicions to the charge nurse is often

enough to get marked as a troublemaker and potential

victim of the kill the messenger syndrome.

poor or weak nursing management that does not ad-

vocate for patients and nurses, and where nurses fail

to support the whistle blower.

Changing this werk environment is not impossible.

When nurses work together to define and enforce the

highest standards of nursing practice then nursing

management has little choice but to respond. They

learn that nurses demand leaders to show backbone.

Mediocre nurses quickly change their behavior or

move on when they realize that their obsequious and

sycophantic behavior is unrewarded. Floor nurses

can have a dramatic effect on who the hospital

administration appoints as the CNO, and ultimately

on who the CNO appoints as DON, who the DON

appoints a s Head Nurse, and so on.

THE WHITE COAT OF SILENCE IS NURSING’S

DIRTY LITTLE SECRET. It can only thrive in an

environment that is permissive and unresponsive. If

you know that you are working in a hospital where

the “white coat of silence” is the rule and not the

exception, there are some steps you can take to

protect your patients and yourself.

FIRST AND FOREMOST, always document. Al-

though documenting can be time consuming, it is

important to create a paper trail.

SECOND, become thoroughly familiar with your hos-

pital’s quality improvement protocol and employee

discipline process.

THIRD, when reporting unsafe nursing practices,

sentential events, possible errors, and so on, always

follow the chain of command and keep a copy of the

documentation that you submitted.

FOURTH, if the situation worsens, or you begin get-

ting the feeling that you are working around with a

“target on your back,” give serious consideration to

looking for a position in another hospital.

It may seem extreme to change jobs when confronted

with the white coat but it’s not. If you are working in

a hospital where the norm is to ignore real and valid

concerns about safe nursing practice and good patient

care you cannot personally solve a system-wide

problem. What you can do, however, is to provide the

documentation that administration was informed,

but that they chose to remain ignorant of the

problems. Why? Because when the hospital suffers an

event big enough—if it tolerates a white code of

silence, it eventually will—then it won’t be able to

hide its practices.

Then your documentation can be used to instigate

change.

Genevieve M. Clavreul is a health care manage-ment

consultant. She is an RN and has experience as a

director of nursing and as a teacher of nursing

management. She can be reached at: Solutions

Outside the Box; PO Box 867, Pasadena, CA;

gmc@solutionsoutsidethebox.net; 626-844-7812.

THIS ARTICLE IS ARCHIEVED ON LINE.

http://www.solutionsoutsidethebox.net/documents/20

The ‘White Coat’ of Silence: Working Nurse Feb 21,

2005 pages: 11-15.

APPENDIX B

FOR IMMEDIATE RELEASE CONTACT:

January 26, 2005 Mary Dondiego

(801) 724-6323

New Study Finds U.S. Hospitals Must Improve

Workplace Communication to Reduce Medical Errors,

Enhance Quality of Care

Expert Panel Issues Call-to-Action with

New National Standards and Training

Recommendations

WASHINGTON—January 26, 2005—According to

findings from a study released today in a national

briefing of healthcare stakeholders, the prevalent

culture of poor communication and collaboration

among health professionals relates significantly to

continued medical errors and staff turnover. Addi-

tionally, a lack of adequate support systems, skills

and personal accountability results in communication

gaps that can cause harm to patients.

A national study of more than 1,700 nurses, phy-

sicians, clinical-care staff and administrators found

that fewer than 10 percent address behavior by

colleagues that routinely includes trouble following

directions, poor clinical judgment or taking danger-

ous shortcuts. In all, the study pinpoints seven cate-

gories of problems that are frequently encountered,

yet rarely addressed. The study was co-sponsored by

the American Association of Critical-Care Nurses

(AACN) and VitalSmarts, a company specializing in

leadership training and organizational performance.

“This research validates what our 100,000 consti-

tuents have communicated to us as the number one

barrier hindering optimal care for patients,” said

Kathy McCauley, RN, PhD, BC, FAAN, FAHA, presi-

dent, AACN. “Too often, improving workplace com-

munication is seen as a ‘soft’ issue—the truth is we

must build environments that support and demand

greater candor among staff if we are to make a

demonstrable impact on patient safety.”

To drive the cultural transformation needed to im-

prove communication in hospitals, AACN unveiled

today a set of national standards to promote skilled

communication and collaboration among nurses and

other caregivers. The AACN standards and Vital-

Smarts recommendations emphasize the urgent need

for hospitals to implement initiatives, especially com-

munication training and education, to ensure that

healthcare professionals deliver safe, high quality

care to their patients.

AACN and VitalSmarts combined their resources to

better understand communication problems in hos-

pitals through the survey Silence Kills: The Seven

Crucial Conversations for Healthcare. Among the

study’s key findings:

84 percent of physicians and 62 percent of

nurses and other clinical-care providers have

seen coworkers taking shortcuts that could be

dangerous to patients.

88 percent of physicians and 48 percent of

nurses and other providers work with people

who show poor clinical judgment.

Fewer than 10 percent of physicians, nurses

and other clinical staff directly confront their

colleagues about their concerns, and one in five

physicians said they have seen harm come to

patients as a result.

10a

The 10 percent of healthcare workers who

raise these crucial concerns observe better pa-

tient outcomes, work harder, are more satis-

fied and are more committed to staying in their

jobs.

“People frequently see these problems, but too often

they fail to talk about them,” says Joseph Grenny,

president of VitalSmarts and co-author of Vital-

Smarts’ New York Times best-selling books Crucial

Conversations and Crucial Confrontations. “Health-

care professionals who embrace the findings of this

study and start talking candidly and safely about

these seven problems will find that outcomes can

improve dramatically.”

According to panelist Dennis S. O’Leary, MD, presi-

dent of the Joint Commission on Accreditation of

Healthcare Organizations (JCAHO), communication

is a top contributor to medical errors in healthcare

facilities. “The standards and recommendations put

forth today make an important contribution to be-

ginning to solve the identified communication prob-

lems,” said Dr. O’Leary.

Panelist Karlene Kerfoot, RN, PhD, CNAA, FAAN,

senior vice president for patient care services and

chief nurse executive at Clarian Health Partners in

Indianapolis, explained that by focusing on workplace

communication improvements, Clarian has experi-

enced greater recruitment and retention success and

improved safety overall.

“Nurses must be as proficient at handling personal

communication as they are in clinical skills,” said

Connie Barden, RN, MSN, CCNS, CCRN, executive

editor of AACN’s Standards for Establishing and

Sustaining Healthy Work Environments: A Journey to

lla

Excellence. “According to the Standards, a culture of

safety and excellence requires that individual nurses

and healthcare organizations make it a priority to

develop communication skills that are on par with

expert clinical skills.”

# # #

For copies of the Silence Kills study report and

the AACN Standards for Establishing and Sustain-

ing Healthy Work Environments, visit http://www.

rxforbettercare.org.

With 100,000 members and constituents, the Ameri-

can Association of Critical-Care Nurses is the largest

specialty nursing organization in the world. Its head-

quarters are located in Aliso Viejo, Calif. Founded in

1969, the association has more than 240 chapters in

the U.S. and abroad and is working toward a

healthcare system driven by the needs of patients and

their families, where critical care nurses make their

optimal contribution. Complete information about

AACN is available at http: / /www.aacn.org.

A world leader in leadership training and organi

zational performance, VitalSmarts. (http://www.vital

smarts.com) provides products and services to hun-

dreds of companies, including over 300 of the For-

tune 500. For over twenty-five years, and with over

20,000 participants, the company principals have re-

searched methods for bringing about systematic and

lasting change.

12a

APPENDIX C

Contact: Scott Shapiro

(720) 963-6584

sshapiro(a,healthgrades.com

[Logo] Todd VanFossen

(608) 695-3992

tvanfossen@healthgrades.com

DEATH RATE 70% LOWER AT NATION’S TOP-

RATED HOSPITALS: HEALTHGRADES 11th

ANNUAL HOSPITAL QUALITY STUDY

—The Most Comprehensive Annual Study of Hospital

Quality in America Examines 41 Million Patient

Records at 5, 000 Hospitals Over Three Years;

Mortality Rates Improve Nationally—

—City and State-Level Hospital Death Rates

Released—

—Hospital Quality Ratings Available Free to

Consumers at HealthGrades.com—

GOLDEN, Colo. (October 14, 2008)—Patients have

on average a 70 percent lower chance of dying at

the nation’s top-rated hospitals compared with the

lowest-rated hospitals across 17 procedures and

conditions analyzed in the eleventh annual Health

Grades Hospital Quality in America Study, issued

today by HealthGrades, the leading independent

healthcare ratings organization.

While overall death rates declined from 2005 to 2007,

the nation’s best-performing hospitals were able to

reduce their death rates at a much faster rate than

poorly performing hospitals, resulting in large state,

regional and hospital-to-hospital variations in the

quality of patient care, the study found.

13a

HealthGrades Hospital Quality in America Study,

also found that if all hospitals performed at the level

of five-star rated hospitals, 237,420 Medicare dealths

could potentially have been prevented over the three

years studied. More than half of those deaths were

associated with four conditions: sepsis (a life-threat-

ening illness caused by systemic response to infec-

tion), pneumonia, heart failure and_ respiratory

failure.

The HealthGrades study of patient outcomes at the

nation’s approximately 5,000 hospitals is the most

comprehensive annual study of its kind, analyzing

more than 41 million Medicare hospitalization rec-

ords from 2005 to 2007. The study examines pro-

cedures and conditions ranging from heart valve-

replacement surgery to heart attack to pneumonia.

Based on the study, HealthGrades today made avail-

able its 2009 quality ratings for all nonfederal

hospitals in the country at www.healthgrades.com, a

Web site designed to help individuals research and

compare local healthcare providers.

Full reports on death rate trends in each of the 50

states and the District of Columbia are available

in the study. And, for the first time, HealthGrades

has released hospital death rates for the nation’s 15

largest metropolitan statistical areas: New York, Los

Angeles, Chicago, Dallas, Philadelphia, Houston,

Miami, Washington D.C., Atlanta, Boston, Detroit,

San Francisco, Phoenix, Riverside-Inland Empire

(CA) and Seattle. Large variation exists between

major metropolitan areas.

“Geography should not be a major factor in patients’

outcomes. If our nation’s hospitals are to close the

quality gap and guarantee an equally high level of

l4a

medical care for every patient, no matter where he or

she lives, it will require a commitment by our nation

and its communities to demand more from quality

improvement,” said Samantha Collier, MD, Health-

Grades’ chief medical officer and a study author.

“Until then, it is imperative that anyone seeking

medical care at a hospital do their homework and

know the hospital’s quality ratings before they check

in.”

The study’s major findings are:

The nation’s inhospital risk-adjusted mortality

rate improved, on average, 14.17 percent from

2005 to 2007, but the degree of improvement

varied widely by procedure and diagnosis stud-

ied (range: 6.30% to 20.94%). Five star-rated

hospitals’ mortality rates continue to improve

at a faster rate (13.18%) than 1- or 3-star hos-

pitals (12.30% and 13.14%, respectively).

Large gaps persist between the “best” and the

“worst” hospitals across all procedures and

diagnoses studied. Five star-rated hospitals

had significantly lower risk-adjusted mortality

across all three years studied. Across all

procedures and diagnoses studied, there was

an approximate 70 percent lower chance of

dying in a 5-star rated hospital compared to a

l-star rated hospital. Across all procedures and

diagnoses studied, there was an approximate

50 percent lower chance of dying in a 5-star

rated hospital compared to the U.S. hospital

average.

if all hospitals performed at the level of a-5-

star rated hospital across the 17 procedures

‘ and diagnoses studied, 237,420 Medicare lives

15a

could have potentially been saved from 2005 to

2007.

Fifty-four percent (128,749) of the potentially

preventable deaths were associated with just

four diagnoses: Sepsis, heart failure, pneu-

monia and respiratory failure.

Variation in risk-adjusted mortality exists not

only at the national level but also at the state

and regional levels. The greatest quality dif-

ferences between states occurred in hospital

death rates for heart failure, pulmonary,

stroke and cardiac surgery.

The region with the lowest overall risk-

adjusted mortality rates was the East North

Central region (IL, IN, MI, OH, and WI), while

the East South Central region (AL, KY, MS,

and TN) had the highest mortality rates.

The East North Central region (IL, IN, MI,

OH, and WI), had the highest percentage of

best-performing hospitals at 26 percent. Less

than seven percent of hospitals within the New

England region (CT, MA, ME, NH, RI, and VT)

were top-performing hospitals.

In the study’s analysis of Hospital death rates, the

following 17 procedures and conditions were ana-

lyzed: bowel obstruction, chronic obstructive pul-

monary disease, coronary bypass surgery, coronary

interventional procedures (angioplasty/stent), dia-

betic acidosis and coma, gastrointestinal bleed, gas-

trointestinal surgeries and procedures, heart attack,

heart failure, pancreatitis, pneumonia, pulmonary

embolism, resection/replacement of the abdominal

aorta, respiratory failure, sepsis, stroke, and valve

replacement surgery. The full study, along with its

16a

methodology and state-by-state hospital-quality sta-

tistics, can be found at www.healthgrades.com.

HealthGrades’ Star Ratings of Hospitals

On its Web site, HealthGrades offers, free to con-

sumers, quality ratings of 2; procedures and treat-

ments for every nonfederal hospital in the country.

The Web site is designed so that consumers can

easily compare patient outcomes at their local hos-

pitals for procedures ranging from aortic aneurysm

repair to bypass surgery. Each hospital receives a

star rating based on its patient outcomes in terms of

mortality or complication rates for each procedure or

treatment. Hospitals with outcomes that are above

average to a statistically significant degree receive a

five-star rating. Hospitals with average outcomes

receive a three-star rating, and hospitals with out-

comes that are below average receive a one-star

rating. Because no two hospitals or their patients’

risk profiles are alike, HealthGrades employs exten-

sive risk-adjustment algorithms to ensure that it is

making fair comparisons.

About Health Grades

Health Grades, Inc. (Nasdaq: HGRD) is the leading

healthcare ratings organization, providing ratings

and profiles of hospitals, nursing homes and phy-

sicians. Millions of consumers and many of the na-

tion’s largest employers, health plans and hospitals

rely on HealthGrades’ independent ratings, advisory

services and decision-support resources to make

healthcare decisions based on the quality and cost of

care. More information on the company can be found

at www.healthgrades.com.

17a

APPENDIX D

In the Literature

FIVE YEARS AFTER TO ERR IS HUMAN:

WHAT HAVE WE LEARNED?

Five years ago, the Institute of Medicine (IOM)

issued its landmark report on medical errors, To Err

Is Human: Building a Safer Health System. The

report’s finding that as many as 98,000 people die

each year due to medical errors ignited professional

and public dialogue. Patient safety has since become

a frequent topic for journalists, health care leaders,

and consumers, but is health care any safer now?

And if not, why not?

Two authors of the IOM report, Lucian Leape, M.D.,

of the Harvard School of Public Health, and Donald

Berwick, M.D., of the Institute for Healthcare

Improvement, endeavor to answer these questions in

“Five Years After To Err Is Human: What Have We

Learned?” (Journal of the American Medical Asso-

ciation, May 18, 2005). Despite finding small im-

provements at the margins—fewer patients dying

from accidental injection of potassium chloride, re-

duced infections in hospitals due to tightened infec-

tion control procedures—it is harder to see the over-

all, national impact, Leape and Berwick say. “[T]he

groundwork for improving safety has been laid in

these past five years but progress is frustratingly

slow,” they write.

Accomplishments

While To Err Is Human has not yet succeeded in

creating comprehensive, nationwide improvements, it

has made a profound impact on attitudes and organi-

zations. First, it has changed the way health care

18a

professionais think and talk about medical errors and

injury, with few left doubting that preventable medi-

cal injuries are a serious problem. “It truly changed

the conversation,” say Leape and Berwick. A central

concept of the report—that bad systems and not bad

people lead to most errors—has since become a

mantra in health care.

The second major effect of the report was that it

helped recruit a broad array of stakeholders to

advance the cause of patient safety. In 2001,

Congress responded to the IOM recommendations by

allocating $50 million annually for patient safety

research to the Agency for Healthcare Research and

Quality (AHRQ), the lead federal agency for health

care safety. Other important players that have

emerged include the Veteran’s Health Adminis-

tration, the Joint Commission on Accreditation of

Healthcare Organizations (JCAHO), and the Centers

for Medicare and Medicaid Services (CMS), as well as

purchasers and payers. However, the most important

stakeholders, say the authors, are the physicians,

nurses, therapists, and pharmacists who have be-

come much more alert to safety hazards and who are

committed to making improvements on the front

lines.

Clearly, the report has also produced real changes in

the practice of health care. In 2003, JCAHO began

requiring hospitals to implement 11 safety practices,

including improving patient identification, commu-

nication, and “surgical site verification” (marking a

body part to ensure surgery is performed on the

correct part). More safe practices will be added in

2005. In addition, teaching hospitals initiated new

residency training hour limitations in 2003, aimed at

reducing errors due to fatigue.

19a

Challenges

With all this growing awareness and activity, why is

health care not measurably safer? The answers, the

authors say, lie in the very culture of medicine.

Creating a culture of safety requires changes that

physicians may perceive as threats to their autonomy

and authority. Fear of malpractice liability, more-

over, may create an unwillingness to discuss or even

admit to errors. Other issues include the complexity

of the health care industry, with its vast array of

specialties, subspecialties, and allied health profes-

sionals; a lack of leadership at the hospital and

health plan level; and a scarcity of measures with

which to gauge progress.

The current reimbursement system can also work

against safety improvement and, in some cases, may

actually reward less-safe care, the authors say. For

instance, some insurance companies will not pay for

new practices to reduce errors, while physicians and

hospitals can bill for additional services that are

needed when patients are injured by mistakes.

Next Steps

Despite formidable barriers, the authors expect to see

dramatic advances in the next five years in the

following areas: implementation of electronic health

records, wide diffusion of proven and safe practices,

spread of training on teamwork and safety, and full

disclosure to patients following injury. However,

while these advances will have an impact on reducing

errors, they represent only a small fraction of the

work that needs to be done. To create comprehensive,

nationwide change, pressure must be applied to the

health care industry. Public outrage, reformed reim-

bursement policies, and regulation can create some of

20a

this needed pressure. In addition, the authors sug-

gest payment incentives to accelerate widespread

adoption. It may be equally important, they say, to

create negative financial consequences for hospitals

or organizations that continue to perform unsafe

practices.

The single most important step, however, is to set

and adhere to “strict, ambitious, quantitative, and

well-tracked national goals,” say Leape and Berwick.

They urge AHRQ to bring together organizations,

including JCAHO, CMS, and the American Medical

Association, to agree to a set of patient safety goals to

be reached by 2010. The most important lesson of the

past five years, the authors argue, is that “we will not

become safe until we choose to become safe.”

2la

Clinical Effectiveness of Safe Practices

Intervention esults

Physician computer order 81% reduction of medication

entry errors””

Pharmacist rounding with 66% reduction of preventable

team adverse drug events‘

78% reduction of preventable

adverse drug events"

Rapid response teams Cardiac arrests decreased by 15%‘

Team training in labor and 50% reduction in adverse

delivery ' outcomes in preterm deliveries’

Reconciling medication 90% reduction in medication

practices upon hospital errors®

discharge

*" D. W. Bates, J. M. Teich, J. Lee et al., “The Impact of

Computerized Physician Order Entry on Medication Error

Prevention,” Journal of the American Medical Informatics

Association 6 (July/August 1999): 313-21.

’ D. W. Bates and A. A. Gawande, “Improving Safety with

Information Technology,” New England Journal of Medicine 348

(June 19, 2003): 2526-34.

“L. L. Leape, D. J. Cullen, M. D. Clapp et al, “Pharmacist

Participation on Physician Rounds and Adverse Drug Events in

the Intensive Care Unit,” Journal of the American Medical

Association 282 (July 21, 1999): 267-70.

*S. N. Kucukarslan, M. Peters, M. Mlynarek, D. A. Nafziger,

“Pharmacists on Rounding Teams Reduce Preventable Adverse

Drug Events in Hospital General Medicine Units,” Archives of

Internal Medicine 163 (September 22, 2003): 2014-18.

* L. Landro, “The Informed Patient: Hospitals Form ‘SWAT’

Teams to Avert Deaths,” Wall Street Journal, December 1, 2004.

‘ B. Sachs, Beth Israel Deaconess Medical Center, written

communication, October 2004.

* J. D. Rozich and R. K. Resar, “Medication Safety: One

Organization’s Approach to the Challenge,” Journal of Clinical

Outcomes Management 8 (October 2001): 27-34.

22a

Ventilator bundle protocol Ventilator-associated pneumonias

decreased”

* J. Whittington, written communication, March 2005.

Source: L. L. Leape and D. M. Berwick, “Five Years After To Err

Is Human: What Have We Learned?” Journal of the American

Medical Association 293 (May 18, 2005): 2384-90.

23a

APPENDIX E

Joint Commission Forms National Task Force

To Review Relevance of Standards,

Compliance Requirements

Media Contact:

Charlene Hill

Media Relations Manager

630.792.5175

E-mail: chill@jcaho.org

(Oakbrook Terrace, [1].—April 30, 2001) The Joint

Commission on Accreditation of Healthcare Organi-

zations today launched a sweeping review of its hos-

pital standards and requirements for demonstrating

compliance with standards.

An 18-member task force will pinpoint which ac-

creditation standards are most relevant to the safety

and quality of patient care, and target for elimination

or modification those standards that do not con-

tribute to good patient outcomes. In addition, the

task force will identify redundant and overly bur-

densome documentation requirements for potential

streamlining, and identify areas needing additional

focus.

The project is part of a concerted effort by the Joint

Commission to enhance the value and effectiveness of

its accreditation process. The initiative will identify

opportunities to streamline compliance activities for

the nearly 5,000 accredited hospitals, allowing the

organizations to pursue their efforts on improving

patient care. The Joint Commission plans to conduct

similar reviews for its seven other accreditation pro-

grams in the near future.

24a

“Accreditation is about performance that directly

impacts patient care and safety, not process and

paperwork,” says Charles A. Mowll, executive vice

president, Joint Commission. “We want Joint Com-

mission accreditation to continue to offer measurable

benefits to hospitals and the patients they serve. A

thorough, comprehensive assessment is crucial to

ensure that Joint Commission standards accurately

reflect the dynamic environment of health care

today.” Only a few recently established standards—

such as groundbreaking requirements regarding pain

management, patient safety and restraint and seclu-

sion—are exempt from scrutiny. These standards

have already been subject to the type of broad con-

sensus-building efforts that the Joint Commission is

now seeking for older requirements.

In addition, standards relating directly to Medicare

Conditions of Participation (CoPs) for hospitals will

receive special consideration. While the task force

will identify potential additions, deletions or modifi-

cations to this subset of standards, the Joint Com-

mission recognizes that these standards are the “law

of the land” and are required for Medicare deem-

ing. The task force’s ideas, however, may potentially

serve as the basis for Joint Commission discussions

with the Health Care Financing Administration as

changes are considered to CoPs.

Led by Ken Shull of the South Carolina Hospital

Association, the task force will include quality direc-

tors, medical records directors, nurses, physicians,

engineers, risk managers and other hospital leaders

who have first-hand experience with Joint Commis-

sion accreditation standards and surveys. Further-

more, physician groups will be enlisted to specifically

review medical staff standards.

25a

“Many hospitals are faced with limited financial

revenues, a national staffing crisis and an ever-

increasing burden of compliance demands imposed by

state and federal regulators, accreditors and man-

aged care organizations,” Shull says. “I welcome this

invitation to work with my task force colleagues and

the Joint Commission to offer constructive input on

what most directly impacts patient care.”

Specifically, the task force will consider the following

criteria in reviewing standards:

Continuing relevance in promoting patient

safety or high quality care.

Redundancy with other external quality

requirements.

Applicability of standards to hospital care.

Likelihood that compliance will be consistently

evaluated.

Extent to which compliance can actually be

measured.

Linkage to patient outcomes.

The Joint Commission also will ask the task force to

identify common misconceptions and misinformation

regarding requirements for demonstrating standards

compliance. These fallacies often result in unneces-

sary costs for hospitals in both staff time and

resources.

In addition to the comprehensive standards review,

the Joint Commission has in recent years made a

number of significant changes intended to enhance

the evaluation of critical patient safety and patient

care functions and to achieve an accreditation process

that remains consultative and centered on perform-

26a

ance improvement. A redesigned on-site survey proc-

ess now focuses more on individual-centered evalua-

tions and allows more time for observation in patient

care units. In addition, the Joint Commission is

conducting pilot testing of a proposed model to assess

staffing effectiveness and a more continuous survey

process.

http://www.jcaho.org/news/nb324. html

27a

APPENDIX F

The Joint Commission

Behaviors that Undermine a Culture of Safety

http://www.jointcommission.org/NewsRoom/PressKits

/Behaviors+that+Undermine+a+Culture+of+Safety/a

pp_stds.htm

Issue 40: July 9, 2008

Applicable Joint Commission Standards

Standard LD.03.01.01

Rationale for LD.03.01.01

Leaders create and maintain a culture of safety and

quality throughout the [organization]. Safety and

quality thrive in an environment that supports team-

work and respect for other people, regardless of their

position in the [organization]. Leaders demonstrate

their commitment to quality and set expectations for

those who work in the [organization]. Leaders eval-

uate the culture on a regular basis. Leaders encour-

age teamwork and create structures, processes, and

programs that allow this positive culture to flourish.

Disruptive behavior that intimidates others and

affects morale or staff turnover can be harmful to

[patient] care. Leaders must address disruptive be-

havior of individuals working at all levels of the

[organization], including management, clinical and

administrative staff, licensed independent practition-

ers, and governing body members.

Elements of Performance for LD.03.01.01

1. Leaders regularly evaluate the culture of

safety and quality using valid and reliable

tools.

10.

28a

Leaders prioritize and implement changes

identified by the evaluation.

Leaders provide opportunities for all individ-

uals who work in the hospital to participate in

safety and quality in‘tiatives.

The hospital has a code of conduct that de-

fines acceptable, disruptive, and inappropriate

behaviors.

Leaders create and implement a process for

managing disruptive and inappropriate be-

haviors.

Leaders provide education that focuses on

safety and quality for all individuals. (See also

LD.04.04.05, EP 6)

Leaders establish a team approach among all

staff at all levels.

All individuals who work in the _ hospital,

including staff and licensed independent prac-

titioners, are able to openly discuss issues of

safety and quality.

Literature and advisories relevant to patient

safety are available to all individuals who work

in the hospital.

Leaders define how members of the popula-

tion(s) served can help identify and manage is-

sues of safety and quality within the hospital.

Medical Staff Standard

MS.4.00

Overview

Determining the competency of practitioners to pro-

vide high quality, safe patient care is one of the most

29a

important and difficult decisions an organization

must make. The development and maintenance of a

credible process to determine competency requires

not only diligent data collection and evaluation, but

also the actions by both the governing body and

organized medical staff.

The credentialing and privileging process involves a

series of activities designed to collect, verify, and

evaluate data relevant to a practitioner’s professional

performance. These activities serve as the foundation

for objective, evidence-based decisions regarding ap-

pointment to membership on the medical staff, and

recommendations to grant or deny initial and re-

newed privileges. In the course of the credentialing

and privileging process, an overview of each and

privileging process, an overview of each applicant’s

licensure, education, training, current competence,

and physical ability to discharge patient care re-

sponsibilities is established.

Three new concepts are introduced in the revised

credentialing and privileging standards. First, the

revised credentialing and privileging standards have

been informed throughout by the six standards have

been informed throughout by the six areas of “Gen-

eral competencies” developed by the accreditation

council for graduate medical education Education

(ACGME) and the American Board of Medical Spe-

cialties (ABMS) joint initiative. The areas of general

competencies include the following:

Patient Care

Medical/Clinical Knowledge

Practice-based Learning and Improvement

Interpersonal and Communication Skills

30a

Professionalism

Systems-based Practice.

Integrating these concepts into the standards allows

the organized medical staff to expand to a standards

allows the organized medical staff to expand to a

more comprehensive evaluation of a practitioner’s

professional practice.

gla

APPENDIX G

Swinging Pendulum of Peer Review Immunity

By Charles I. Artz, Esq.

Physician’s News Digest—Pubiished November 2001

http://www.physiciansnews.com/law/1101.html

Recent appellate court decisions in Pennsylvania and

other jurisdictions raise the question whether the

immunity afforded hospitals and reviewers under

the federal Health Care Quality Improvement Act

(HCQIA) have allowed the peer review system to be

improperly utilized, or even abused in some cases.

HCQIA was enacted by Congress in 1996 to provide

immunity against civil litigation damages for phy- |

sicians and hospitals engaging in professional peer

review, and to restrict the ability of incompetent

physicians to move from state to state without dis-

closure or discovery of prior damaging or incompetent

medical performance. Immunity under HCQIA can be

established if the peer review process meets four

general standards:

It had an objective, reasonable belief that its

action furthered quality health care.

It made an objective, reasonable effort to ob-

tain the facts.

Under the totality of the circumstances, the

physician being reviewed received adequate

notice and hearing (i.e., due process) pro-

cedures.

The organization had a reasonable belief that

its actions were warranted.

Superficial review of this four-part test suggests phy-

sicians should receive due process throughout the

32a

entire peer review, and serious quality of care issues

must exist before a physician’s privileges can be

suspended, reduced or revoked. Case law and ex-

perience demonstrate the contrary.

Bias and Conflicts of Interest Immaterial

In Manzetti v. Mercy Hospital of Pittsburgh, the

Pennsylvania Supreme Court held on July 18, 2001

that the hospital and reviewers were entitled to

immunity under HCQIA. The Supreme Court dis-

regarded all evidence relating to the reviewed

physician’s competitors’ involvement in the case and

attacks against him. The Court stated that any self-

interest, bias or conflicts of interests by the reviewers

were immaterial. According to the Court, the only

time HCQIA precludes an economic competitor from

involvement in the internal peer review process is at

the hearing panel phase of the case; however, HCQIA

does not preclude economic competitors from _per-

petrating due process violations and inculcating bias

throughout the early phases of the review process.

Under most hospital bylaws, by the time the phy-

sician gets to the fair hearing panel, the burden has

shifted against the physician with the requirement

that the physician prove by clear and convincing

evidence that all prior decisions were arbitrary and

capricious or factually baseless. Practical experience

demonstrates this is a virtually impossible burden to

sustain and standard to satisfy.

The Supreme Court also held that the “reasonable

effort” prong of the four-part HCQIA immunity test

is satisfied if the review activities are “sensible,” but

they do not have to be “flawless.” Thus, the Supreme

Court has countenanced due process violations and

errors in the peer review process.

33a

Sloppy, Negligent and Wrong Peer Review Warrants

Immunity .

In Donnell v. HCA Health Services of Kansas, Inc.,

the Kansas Court of Appeals held on July 6, 2001

that physician peer reviewers are immune from

liability under HCQIA even if their investigations are

sloppy, negligent, and wrong. Physicians must prove

bad faith and malice to have a peer review decision

overturned.

This decision, like Manzetti above, allows a hospital

to make serious mistakes about the quality of a

physician’s health care. It also permits termination of

the physician’s staff privileges, and the detrimental

effect of a Data Bank entry, all with immunity from

liability and practical impunity.

One Mistake and Done: Free Ride for Abuse

In Mever v. Sunrise Hospital, the Nevada Supreme

Court held on May 15, 2001 that a hospital’s decision

to terminate a physician based upon a single

incident, regardless of the high quality of care the

physician provided throughout the remainder of his

career, was sufficient to protect the hospital under

HCQIA’s immunity provisions.

One Justice on the Supreme Court recognized the

unfairness of the statute, but was compelled to

uphold the decision. The Justice noted that HCQIA

can sometimes be used, “not to improve the quality of

medical care, but to leave a doctor who was unfairly

treated without any viable remedy.” That Justice also

stated: “basically as long as the hospitals provide

procedural due process and state some minimal basis

related to quality health care, whether legitimate or

not, they are immune from liability, which leaves the

34a

hospitals free to abuse the process for their own

purposes.”

No Constitutional Infractions

In Freilich v. Board of Directors of Upper Chesapeake

Health, Inc., a federal court in Maryland held on

May 14, 2001 that the HCQIA immunity provisions

do not violate due process or equal protection under

the U.S. Constitution.

Review Must Be 100% Wrong?

In Brader v. Allegheny General Hospital, 167 F.3d

832 (3rd Cir. 1999), it was proven that the hospital’s

outside expert report had several incorrect conclu-

sions. The Court of Appeals, however, ignored these

mistakes because it found the report to be “otherwise

thorough.” The Court implied that the expert report

must be entirely mistaken, and that the mistakes

must be obvious. Because they were not, the hos-

pital’s decision was not unreasonable, and the first

and fourth prongs of the HCQIA re test were

satisfied.

Bias and Mistakes Early and Often Mean Nothing

In Gordon v. Lewistown Hospital, 714 A.2d 539

(Pa. Cmwlth. 1998), Commonwealth Court found that

there is a presumption of validity of the hospital’s

disciplinary procedures. An outside consultant was

retained. The Hearing Officer was an attorney, who

was determined not to be in economic competition

with the physician, hut was a neutral party. Even

though some of the physician’s direct economic

competitors were involved in the decision, and there

was evidence of a history of hostility toward him,

none of those individuals participated in drafting the

outside report. The Court then looked to the totality

35a

of the process leading to the professional review

action. Under that broad test, even though some

parts of the process were critically flawed and biased,

the Court said, in totality, the physician got all the

process he was due.

These cases are the latest in a series of decisions

nationwide leaving physicians who are subjected to

peer review without any legal remedies, and without

any right to secure a fair hearing and a fair outcome.

The Dreaded Data Bank

An “adverse action” following peer review results in

the hospital reporting (through the Medical Board)

the physician to the National Practitioner Data

Bank, commonly referred to as the “Data Bank.”

Many reports conclude physicians’ care was “incom-

petent,” “unprofessional” or other professionally dis-

astrous terms. Economic experts have opined that

such a negative statement in the Data Bank directly

results in substantial economic loss to a physician.

The Pennsylvania Supreme Court in Hayes v. Mercy

Health Corp., 559 Pa. 21, 739 A.2d 114 (1999) stated

that a physician’s Data Bank entry may, if left

unchallenged, have a deleterious effect on the phy-

sician’s medical career.

Money and Vengeance

The author has represented orthopedic surgeons,

cardiologists, OB/GYNs, thoracic surgeons, anes-

thesiologists, ophthalmologists, family physicians,

internists and other specialists in hospital peer

- review cases and medical staff privileges litigation.

More often than not in the author’s experience, peer

review is initiated against a physician for one of three

reasons: (1) by economic competitors for financial

36a

reasons; (2) in retaliation against the physician for

not “playing ball” in one manner or another (eco-

nomic or otherwise); or (3) in retaliation for the

physician raising concerns about other physicians’

care and seeking to have those providers’ outcomes

reviewed. The state “whistleblower” law does not

protect these physicians. The Pennsylvania Peer

Review Protection Act, which allows physicians to

litigate tort and contract breach claims in state court

against hospitals whose peer review is effectuated by

malice or bad faith, has been “trumped” (although

not technically preempted) by the federal HCQIA

immunity standards.

_ Shifting Sands

Hospital bylaws impose difficult legal standards and

burdens on physicians. Typically, after a physician is

the subject of an adverse recommendation or an

adverse action by a medical executive committee, the

physician is given a fair hearing. Traditional notions

of fairness might lead one to believe that the hospital

would have the burden of proof by at least a pre-

ponderance of the evidence to demonstrate the

physician’s quality of care was below some recognized

and measurable standard warranting a quality of

care concern. After al 1, hospitals have a legitimate

concern about corporate liability and “negligent

credentialing” following the Supreme Court’s Nason

Hospital decision in 1991.

Absolutely every set of hospital bylaws the author

has reviewed do not contemplate a truly fair system

for the physician being reviewed. Instead of the

hospital accepting the burden of proof with a rea-

sonable standard based upon measurable guidelines

for quality infractions, the bylaws shift the burden of

proof to the physician and create a nearly impossible

37a

standard to overcome. The physician typically has

the burden to prove that the hospital’s decision was

arbitrary and capricious. Some bylaws even state

that the physician must prove that there was no

material basis for the action or there was a complete

absence of facts in the record to support the action.

An utterly biased, sloppy, negligent and mistake-

riddled report by an outside reviewer still cannot be

overcome by this enormous burden if there is just a

shred of truth in the report.

Practical Effect

As the case law outlined above illustrates, the phy-

sician’s economic competitors and antagonists can

initiate the peer review process, retain outside con-

sultants and virtually direct the outcome of the

report that will form the basis of the hospital’s

adverse action. After the antagonist’s bias, conflict of

interest, self-interest, direct economic competition

and retaliation motives are all effectuated, they are

immaterial and not reviewable by the courts, since all

of those problems purportedly can be remedied by

retaining a three-member independent panel to

conduct the hearing.

Most fair hearing panels are truly independent. But,

even if the panel calls “balls and strikes” fairly, the

burden of proof and standard of review are so high it

cannot be overcome practically. There is no legal

remedy or recourse to the physician under the

“totality of the circumstances” test. Hospitals have

figured out that all they need to do is establish an

independent fair hearing panel, give minimal due

process at that final phase of the case, and their

immunity will be intact.

38a

JCAHO Doesn’t Care

The JCAHO accreditation manual for hospitals

contains medical staff standards. One standard re-

quires “mechanisms, including a fair hearing and

appeal process, for addressing adverse decisions for

existing medical staff members and other individuals

holding clinical privileges for renewal, revocation, or

revision of clinical privileges.” When discussing the

broad HCQIA immunity and typical hospital bylaws

burden shifting and standard setting procedures that

are anything but fair and balanced, JCAHO staff

take the position that they “don’t care about detail”

even if, as applied, the physician has no chance to

overcome the standards.

Courts Don’t Care

Although courts have no hesitancy involving them-

selves in the intricacies of physician practice in the

context of medical malpractice liability, courts take a

contrary view when physicians seek redress as a

result of faulty peer review and retaliation. In Lyons

v. St. Vincent Health Center, Commonwealth Court

stated: “It is not up to the courts to second-guess

hospitals in their decisions as to the best way to

deliver services; it is up to the institution itself.”

Early Intervention Strategy

A physician subjected to peer review may have little

chance of surviving unless early and aggressive

measures are taken. Understanding the case law and

limitation on judicial remedies, it is prudent for the

physician and counsel to quickly retain the best

conceivable expert in the subject area to address the

outside reviewer report. In many cases, it becomes

very clear that the outside reviewer’s report sig-

39a

nificantly overstates quality of care infractions, is

based on no published peer reviewed medical journal

articles or positions, and is academically pedantic

without taking into consideration reasonable and

acceptable standards of care.

Successful resolution using this strategy can be

achieved with minimal disruption to the physician,

including perhaps CME and monitoring, without

causing a damaging Data Bank entry.

Statewide Independent Peer Review

The process described in this article has led many

physicians, and some organizations, to propose a

statewide peer review requirement that would utilize

independent, non-biased peer review organizations

that make judgments based upon clearly acceptable

standards, taking into consideration reasonable dif-

ferences of opinion. Like a physician being judged

for a licensure infraction, the burden of proof would

remain on the entity seeking to impose discipline (the

hospital) with at least a preponderance of the evi-

dence standard, if not a clear and convincing stan-

dard. Only this level of independence would balance

the playing field and return quality of care to the

forefront of peer review.

Charles I. Artz, Esq., is the founder of the law firm

Charles I. Artz & Associates, located in Harrisburg,

Pa.

40a

APPENDIX H

OVERTREATED

Why Too Much Medicine Is Making Us

Sicker and Poorer

Shannon Brownlee

BLOOM SBURY

Some names have been changed to protect the

Shannon Brownlee All mghts reserved. No part of

this book may be used or reproduced in any manner

whatsoever withcut written permission from the

publisher except in the case of brief quotations

embodied in critical articles or reviews. For informa-

tion address Bloomsbury USA, 175 FifthAvenue, New

York, NY 10010. Published by Bloomsbury USA, New

York All papers used by Bloomsbury USA are

natural, recyclable products made from wood grown

in well-managed forests. The manufacturing proc-

esses conform to the environmental regulations of the

country of origin. The Library Of Congress Has Cata-

loged The Hardcover Edition As Follows: Brownlee,

Shannon. Overtreated: why too much medicine is

making us sicker and poorer / Shannon Brownlee.—

Ist U.S. ed. p. cm. ISBN-13: 978-1-58234-580-2

(hardcover) ISBN-10: 1-58234-580-2 (hardcover) 1.

Medical care—United States. 2. Medical care—

Utilization--United States. I. Title. RA395.A3B785

2007 362.10973—dc22 2007021968 First published

by Bloomsbury USA in 2007 This paperback edition

published in 2008 Paperback ISBN-10: 1-58234-579-1

ISBN- 13: 978-1-58234- 579-6 13579108642

Typeset by Westchester Book Group Printed in the

United States of America by Quebecor World Fairfield

4la

The Most Dangerous Place 53

botched several sex-change operations and cut off the

wrong leg of a man who subsequently developed

gangrene and died. An orthopedic surgeon became

fixated on doing more surgeries than any other

physician in his group, sometimes working eighty

hours a week to keep up his productivity. The more

surgeries he did, the sloppier he got, until he was

routinely committing errors and getting sued for

malpractice. In one case, he put in the wrong size

screw to repair a patient’s bone and refused to correct

it when the head of the screw poked through the

patient’s skin. It’s tempting to lay all medical error at

the feet of bad doctors, but that can’t be the whole

story, as Harvard surgeon Atul Gawande points out,

for the simple reason that good doctors make mis-

takes too. Studies of specific types of medical error

suggest that it is not just a small subset of doctors

who commit them, a rotten few who are responsible

for all the problems. Rather, every physician is

destined to make at least one horrible mistake in the

course of a career—and most will carry the memory

and shame of it for the rest of their lives. It isn’t just

doctors who err. Virtually every person who has

direct responsibility for the care of sick people falls

down on the job sometimes, and the more people

involved in an individual patient’s care—and the

more procedures the patient undergoes—the more

likely it is that somebody in the medical supply chain

is going to blow it. Just think for a moment about the

sheer number of people who have a hand in whether

a patient lives or dies. There are the orderlies who

must deliver blood samples to the lab on time and the

pathologists who must correctly identify infectious

agents so doctors can prescribe the right antibiotic.

Pharmacists have to provide the right drug at the

42a

right dose to the right patient. Somebody has to scrub

down every bacteria-harboring nook of an operating

room, thoroughly sterilize equipment and _ linens,

stock supply closets, fill soap dispensers, and main-

tain heart monitors and ventilators. Every single

person must do his or her job right every single time

or risk the well-being of patients. When you think

about how many people touch a patient, either

directly or indirectly, and how many tasks they must

perform with precision in order to keep patients safe,

it’s hard not to wonder how patients ever leave at all.

THREE Your Local Hospital 72

To REACH SHASTA Regional Medical Center, just

drive north from San Francisco on Interstate 5 for

four hours, until you see Mount Shasta, floating over

Siskiyou County in its permanent cloak of snow. The

hospital sits in the middle of downtown Redding,

near a bend in the winding Sacramento River. Known

as Poverty Flats in the early nineteenth century,

Redding was first settled by miners and loggers, who

stayed until the mines were tapped out and the

redwoods and pines were all cut down. The town

revived in the mid-twentieth century. When it be-

came a mecca for fishermen, hikers, and skiers

headed for nearby Shasta and Trinity lakes, Lassen

Volcanic National Park, and snowcapped Mount

Shasta. Tourism is now one of two main businesses in

this town of ninety thousand residents. Between

them, Shasta Regional Medical Center and Mercy

Medical Center employ more than two thousand

people, and generate nearly one hundred million

dollars a year in revenue. Dr. Patrick Campbell

arrived in Redding with his wife and two children in

1993 less than two years out from his internship and

residency at the University of California, Davis.

43a

Campbell had been working in an urgent care facility

in Sacramento when he was recruited by Redding

Medical Center (which would be renamed Shasta

Regional Medical Center in 2003). Redding offered

a two-year salary guarantee, which would give

Campbell time to build a practice and payoff medical

school debts. From the hospital’s perspective, good

relations hips with primary care physicians like

Your Local Hospital 73

Campbell were a matter of branding, well worth the

recruitment costs: primary care doctors who were

loyal to Redding Medical would admit patients to the

hospital and refer them to the hospital’s specialists,

especially those in its busy cardiac program. To

Campbell, Redding seemed to offer a good life. The

crime rate was low, the schools were good and the

area was beautiful. He could have a small-town prac-

tice that would let him get to know his patients over

the years, while still having access to a modem, high-

tech hospital. Campbell’s high hopes and idealism at

the outset of his career made the events that would

unfold in Redding over the next decades the lawsuit

he would file in 2002, the evidence of malpractice and

fraud committed by several heart specialists at Red-

ding Medical that he would uncover, and the town’s

anger at him for exposing two of its most prominent

physicians seem all the more surreal. After blowing

the whistle on the hospital and its specialists, he

would lose practically everything he valued, his

medical practice, his family, and his home. The tale

of Campbell and Redding Medical Center tells a lar-

ger story about the forces that drive all hospitals to

deliver unnecessary care—and how difficult it is to

rein them in. Campbell grew up in Portland, Oregon,

the son of a secretary and a customs inspector, the

44a

first person in his family to go to college. An accom-

plished violist in high school, he entered Levis and

Clark College with a full music performance scholar-

ship. But after two years of college and a move to

California, the early dream of an orchestral music

career faded. He enrolled at the University of Califor-

nia, Santa Cruz, and switched to natural sciences.

After an undergraduate degree in chemistry and

three years as a graduate student, he finally settled

on medicine, enrolling in medical school at the

University of California, Irvine, where he met his

wife. Both Campbell and his wife went into primary

care. an idealistic decision at a time when more and

more of their classmates were choosing to enter

specialties where the money was much better. One of

the first doctors Campbell met in Redding was a car-

diologist, Chae Hyun Moon. The son of a Korean

physician, Moon was a more ambitious breed of

doctor. According to the New York Times, he gradu-

ated in 1972 from the College of Medicine at Yonsei

University in Seoul and completed an internship and

residency at Metropolitan Hospital Center in New

York.

OVERTREATED 74

His forceful personality and constant availability

allowed him to quickly build a thriving practice in

Redding. When Moon arrived in northern California

in the early 19 8 O 5, all invasive cardiac services-

cardiac catheterization, angioplasty. and open-heart

surgery—were being done in bigger cities like Sacra-

mento, two hundred miles away. Moon pushed for a

cardiac catheterization laboratory—a special room

containing the equipment needed to perform such

procedures as balloon angioplasty—and open-heart-

surgery capability in Redding. First Mercy Medical

45a

Center and then Redding Medical opened labs,

followed by an open-heart-surgery program, in 1987.

Five years later, Moon and Fidel Realyvasquez, Jr., a

Stanford-trained cardiothoracic surgeon were the

dominant figures in their respective specialties.

Together, the men built the California Heart

Institute within the once-sleepy Redding Medical

Center. Primary care physicians sent their patients

from all over northern California, from tiny towns.

like Weed and Paradise, and from as far away as

southern Oregon. Moon was always willing to

accommodate another patient. As he would later tell

the Sacramento Bee. “When these guys call me up

day or night or holidays, it doesn’t matter. I am in a

health profession to save lives.” Both heart specialists

were workhorses, but Moon especially so. He focused

his practice on catheterization, an invasive procedure

that involves snaking a thin catheter, or tube, up

through a major blood vessel in the groin into the

coronary arteries, the blood vessels that supply the

heart muscle with oxygen. Moon also performed

balloon angioplasties, threading a tiny balloon up a

wire inside the catheter. When the balloon was

inflated, it could smash a clot against the arterial

wall, allowing blood to flow freely once again. By the

1990s, cardiologists were also employing stents, tiny

mesh tubes that could prop open a blockage inside a

coronary artery. Moon sometimes performed as many

as a dozen cardiac catheterizations in a sing le day-

four to five times the number his peers in northern

California were performing. In one year, he per-

formed more than eight hundred invasive cardiac

procedures. Between June 2001 and 2002, he billed

Medicare for four million dollars. At its peak,

Redding Medical Center was Performing nearly eight

46a

hundred open-heart surgeries per year—many of

them done by Realyvasquez.

Your Local Hospital 75

With the enormous volume of procedures came high

incomes and lavish lifestyles. Moon owned a ram-

bling hilltop estate on the west side of Redding, with

a view of Mount Shasta and No Trespassing signs

posted at the bottom of the driveway. Realyvasquez

lived on the east side, at the end of a tree-lined street

behind an electronic gate. The doctors were popular

figures in town. Realyvasquez donated his collection

of fifty original Ansel Adams prints to a local mu-

seum. For eight years, Moon donated five thousand

dollars annually to a scholarship for Shasta High

School graduates interested in science or medicine. In

a letter to the editor of the Redding Record Search-

light, the local paper, a resident wrote, “How lucky

we have been that Dr. Moon chose this country to

practice in.” In the summer of 1993, a new patient,

Mary Rosburg, came to Patrick Campbell with a

multitude of physical complaints, including mild

chest pains and shortness of breath. Rosburg and her

husband spent summers living in their trailer in

Trinidad, a small resort town on the California coast,

just north of Eureka. Because she was having chest

pains, Campbell gave Rosburg, who was in her six-

ties, a stress test, which involved asking her to walk

on a treadmill while hooked up to a cardiac monitor.

The test was inconclusive, but out of an abundance of

caution, he referred his patient to Moon. Campbell

assumed that the specialist would “work up” Rosberg

that is, give her a series of mildly invasive tests,

including another kind of treadmill test, that would

help determine whether her complaints indicated

heart disease. Instead, Moon went straight to a coro-

47a

nary artery catheterization and promptly declared

that she needed immediate bypass surgery and a

heart valve replaced. Campbell was surprised both by

the speed with which Moon used catheterization and

by the diagnosis, but he assumed the cardiologist

knew best. Later that same day, however, Campbell

got another call, from a young cardiovascular surgeon

who was a newly arrived partner of Realyvasquez’s.

In that doctor’s opinion, Rosburg did not need sur-

gery. Campbell was startled, but as a primary care

physician just starting out in the community, he

didn’t feel he was in any position to quest ion Moon’s

judgment. He suggested the surgeon talk to Moon

directly. The next morning, Campbell’s patient

under-went the operation. Her recovery was

OVERTREATED 76

uneventful, hut several weeks later, while in Trinidad

with her husband, Rosburg abruptly developed severe

chest pain and shortness of breath. Flown back by

helicopter to Redding, she was found to have a large

blood clot on her new heart valve and underwent

emergency surgery that night to replace it. Rosburg

went into acute kidney failure and died within a

week. Shaken by the death of a patient who had been

essentially healthy just three months earlier, Campbell

wondered if perhaps the surgeon who had called him

had been right-that Moon’s diagnosis had been

incorrect. He concluded that he was in no position to

review the records independently, and the surgeon in

question left the area after one year. But after wit-

nessing further examples of Moon’s quickness to send

patients to the cath lab and recommend open-heart

surgery. Campbell began to worry in earnest that

Moon and his group were being far too aggressive in

their management of cardiac patients. Two years

48a

later, Campbell would have hard evidence that pa-

tients were being given unnecessary care by the

cardiologists in Moon’s practice. During a routine

office visit, Emma Jean Montgomery complained to

Campbell about chest pain. Campbell reports that he

sent her to one of Moon’s partners. The cardiologist

performed a stress test, then catheterization, and

told Campbell by phone that the patient had severe,

three-vessel coronary artery disease and needed

immediate bypass surgery. The surgery was done the

next day. When Campbell received the written report

from her catheterization, two months after her

surgery, he was shocked to see that the cardiologist

had indicated that the patient had only mild to

moderate coronary artery disease and that her chest

pain was not caused by her heart. Not knowing which

version to believe, Campbell obtained the images of

her heart that were taken during her procedure and

looked at them with Dr. Roy Ditchey, a local, board-

certified cardiologist who had just relocated to

Redding. Campbell says that Ditchey agreed: The

woman’s coronary arteries were not severely blocked,

and she had not needed surgery More than once,

Campbell and other physicians who were concerned

about the hospital’s cardiology program and _ its

doctors would complain to Redding Medical Center

administrators. At least once, a review was promised.

Your Local Hospital 77

but over the years, as far as Campbell could tell, one

was never actually undertaken. In the end, Redding

Medical Center would be forced to shut down its

cardiac program, after Campbell finally succeeded in

alerting the Federal Bureau of Investigation and the

Department of Justice. Medical records seized from

the hospital were given to several outside heart

49a

specialists, who found that in twenty-seven years

at Redding, Moon had catheterized some 35,000

patients, a huge number for just one physician

warking, in a lightly nonulated. largely rural area. In

the opinion of the outside specialists, between one

quarter and one half of the patients who underwent

catheterization or surgery at Redding Medical Center

had been operated on inappropriately. Justice

Department documents stated that at least 167

patients had died during cardiac surgery, or shortly

after, as a direct result of the Redding doctors’

aggressive treatment. Either the patients had been

too weak to withstand the surgery, or the doctors had

been negligent, or they had committed errors,

sometimes in haste to go from one patient to the next.

In May 2006, the California State Medical Board

moved to revoke Moon and Realyvasquez’s licenses.

By then Redding Medical’s parent company, Tenet

Healthcare Corporation, had agree to pay $59.5

million to the federal government to settle charges of

Medicare fraud, at the time the largest settlement

made by a health care company. A flurry of news

reports appeared across the country, tracking the

spectacular fall of Redding Medical Center. Most of

the articles interpreted the events as an exceptional

example of doctors run amok, or an isolated case of

Medicare fraud, or an especially egregious episode in

the ongoing saga of for-profit health care. But the

story of a small hospital in northern California

symbolizes a flaw in American medicine that goes far

deeper—and is shared by nearly every sing le medical

institution in the country.

No margin, no mission

The one concept that the media missed in covering

the events at Redding Medical Center was that most

50a

hospitals deliver unnecessary care. As patients, we

want to believe that places like Redding and doctors

like Moon

OVERTREATED 78

and Realyvasquez represent the rare case, and that a

for-profit hospital so busy making money that its

administrators did not want to acknowledge what

was going on in their cardiac center is the exception,

not the norm. Unfortunately, Redding Medic al and

its doctors were simply outliers at the far end of the

spectrum of useless, unnecessary and potentially

dangerous care that hospitals provide (even as they

simultaneously fail to deliver other kinds of care that

patient s need). Unnecessary care, it turns out, is

inevitable in a health care system like ours, partly

because of the way hospitals are paid. All hospitals

need to make money, and for the most part, as we’ve

seen, hospitals and the physicians who work in them

get reimbursed for how much care they deliver,

rather than how well they care for patients—let alone

how efficiently they deliver that care. When hospitals

and doctors give patients medical procedures and

tests they don’t need, or when they fail to give

patients care they do need, they are responding to the

perverse incentives built into the byzantine and

often—precarious reimbursement system that keeps

them all afloat. In the days before health insurance

and Medicare, most hospitals were run by religious

charities, which operated under the motto “No mar-

gin, no mission.” Their mission, of course, was tend-

ing to the sick, regardless of.the patient’s ability to

pay; they tried to earn a small margin on the patients

who could pay in order to cover the cost of their

mission. Today, hospitals still need to run a profit to

stay open, even nonprofits, which make up more than

5la

three quarters of the more than five thousand

hospitals in the United States—and most still turn to

paying (or insured) patients in order to do so. From

the humblest rural clinic to the most prestigious aca-

demic center, nonprofit hospitals generally earn at

most between 2 and 6 percent profit on annual reve-

nues, in part because forty-s ven million Americans

under sixty-five, or about one in six of us, have no

health insurance. At most nonprofits, about 3 to 5

percent of patients are uninsured; at public teaching

hospitals, it’s a whopping 15 to 20 percent. In 2003,

hospitals reported losing twenty-five billion dollars

providing care for which they received no compensa-

tion. (Outside researchers suggest hospitals may be

inflating their losses, which may be closer to sixteen

billion dollars.)

OVERTREATED 84

With its ideological preference for market-driven

solutions. the Reagan administration was not about

to approve price controls on hospital payments. In-

stead, the president signed a plan to impose the DRG

system, an entirely new, draconian payment plan

intended to create incentives for efficiency and reduce

the number of details over which government and

hospitals could quibble. The fee for each diagnosis

group is set to reflect the average cost of treating that

condition in an efficient hospital. If a patient is sicker

than average and requires extra care, the hospital

eats the difference. If the patient is healthier than

average, or the hospital gets him back on his feet

more quickly than average and he consequently costs

less than average, the hospital gets to keep the

change. The DRG system succeeded in providing a

market incentive for efficient hospitals to make a

small profit, while forcing inefficient hospitals to cut

52a

expenses. Many hospitals responded by shutting

down excess beds and slashing their lengths of stay,

which had stretched out during the cushy cost-plus

years. The system slowed the rate at which Medicare

spending was rising to 8.6 percent between 1983 and

1984, the smallest annual increase since the program

began. The following year the rate of increase

dropped to 5.5 percent. (The rate of increase for

hospital payments went to zero the year that Redding

Medical Center’s shenanigans came to light. with

hospitals bending over backward to avoid over-

charging Medicare.) But the DRG system also had an

unexpected side effect, one that has helped drive the

delivery of unneeded care in certain branches of

medicine. Even though DRG fees are supposed to

reflect actual costs. in reality they overpay for many

procedures, especially many surgeries. At the same

time, they underpay for other kinds of care. Take

cardiac bypass, an exceptionally profitable surgery.

in 2002, Medicare paid $24,000 per bypass surgery

with cardiac catheterization while the average cost

per case, according to a report put out by the

Medicare Payment Advisory Commission (MedPAC),

was $ 14,400, leaving $9,600 profit for every by-

passed patient. Other cardiac procedures offer even

higher margins: Replacing a heart valve, the surgery

Patrick Campbell’s patient Mary Rosburg underwent,

can yield as much as 60 percent profit. The net profit

hospitals make from these procedures drops when

Medicare patients are sicker, of course, but even so,

the

Your Local Hospital 85

most common cardiac procedures typically performed

on a heart attack patient earn about 6 to 16 percent

over costs from Medicare reimbursement and more

53a

than one hospital has made its entire margin on

invasive cardiac procedures alone. Most private

insurers don’t use the DRG system, but rather a

combination of negotiated payments and per diems

that wind up being more generous in some markets

than Medicare—and they too overpay on many

procedures. From private payers, hospitals can re-

portedly make around $ 20,000 for an angioplasty

procedure, about 40 percent of which is profit. On the

flip side of the profit equation, the DRG payment for

treating a heart attack patient with drugs alone and

no surgical intervention—which for many patients is

just as effective—produces about an 11 percent loss

for the average hospital. What all this means is that

any hospital administrator with an ounce of good

business sense is going to want to maximize the

number of patients in profitable service lines, which

they have taken to calling “centers of excellence,”

whether or not they are, in fact, excellent. Even at

academic medical centers, administrators exert

subtle pressure on the physicians working in profit-

able departments to keep up their productivity by

performing more-profitable procedures. In this sense,

a hospital is no different from any other business. In

recent years, IBM has shifted its focus from selling

hardware to servicing large database systems where

profits are higher. An even better analogy for the

hospital industry is a low margin, high-volume

business like personal computers. Dell earns only

about 5 percent profit on each computer it sells, but it

sells millions and millions of them. Similarly, hospi-

tals want as many “bed turns:” or as much

“throughput,” as possible in their profitable depart-

ments. The best way to accomplish this is to expand

the capacity of high-margin departments to increase

volume. You can think of it as the Willie Sutton

54a

strategy: Willie Sutton robbed banks because that’s

where the money is; hospitals invest in their money-

making product lines because that’s where the profit

is. Yet, when hospitals focus not on profits but

instead on providing care that helps patients, they

often wind up being punished financially Several

hospitals around the country have experimented with

integrated, supportive

Your Local Hospital 87

Investing in profit, not health. All of this goes a long

ways in explaining why, in 1998, Redding Medical

Center decided to expand its moneymaking product

line—the cardiac procedures being performed by

Realyvasquez and Moon. That year, the hospital

earned $50 million in pretax profits, most of it from

the California Heart Institute. “We were beyond full:

one former administrator would later tell the New

York Times.” We were flying. The hospital con-

structed a five-story addition, known around town as

“the Tower,” much of which was devoted to expanded

cardiac facilities. The Tower allowed Moon and

Realyvasquez to recruit other cardiologists and sur-

geons to the area-and to bring in more patients. The

cardiology specialists were not actually employed by

the hospital; they had private practices and what’s

known as “admitting privileges,” a relationship that

is beneficial to both physician and hospital. Once

known as the “doctor’s workshop,” a hospital is a

little like a hotel filled with nursing staff, technology,

and beds, where physicians are granted the privilege

of admitting and treating patients. For hospitals,

doctors are the medical equivalent of rainmakers in a

law firm, the people who bring in the paying

customers and most hospitals bend over backward to

attract and keep physicians who can bring in patients

55a

who are insured. “Hospitals need to understand who

their customer is—the doctor who admits patients,”

as one neurosurgeon aptly puts it. With so much

riding on the cardiac team, Redding admiaistrators

and the hospital’s parent company, Tenet Healthcare,

stroked and pampered Moon and Realyvasquez. The

hospital appointed Realyvasquez chairman of cardio-

thoracic surgery and made Moon chairman of the

cardiology department. Moon was also a member of

the hospital board, and was eventually made head of

the committee charged with overseeing the quality of

cardiac care. The hospital sponsored golf tourna-

ments to benefit the cardiac unit, sometimes offering

Moon the use of its emergency helicopter to fly to the

golf course. Moon’s success and prestige gave him

unusual clout for a physician; at one point, he was

instrumental in persuading Tenet to dismiss a hospi-

tal executive. “No one would ever want to take

[Moon] on,” a former Redding administrator told the

New York Times. “Moon was Redding Medical

Center, and he knew it.”

OVERTREATED 88

By ‘999, Campbell had stopped sending patients to

Moon if he could avoid it. He left his group practice

and moved to another office, preferring to send his

patients to Mercy Medical Center, the hospital across

town. Still, he felt compelled to call attention to the

situation at Redding. He strongly suspected that

Moon, Realyvasquez, and their colleagues may have

been charging Medicare and Medi-Cal, the state’s

Medicaid program for unnecessary procedures, not to

mention putting patient s at terrible risk. In March,

he approached a local Redding attorney, asking his

advice about how to get the government to investi-

gate the hospital and its cardiac team. The attorney,

56a

Jerrold Pickering, a longtime Redding resident who

was a patient of Campbell’s at the time, listened to

the doctor’s story for two hours before promising to

look into the matter. Over the next two weeks,

Pickering made several confidential inquiries to local

Medicare officials, outside physicians, and the local

district attorney’s office. The lawyer then wrote

Campbell a letter, telling him that the public authori-

ties were not interested in pursuing the case. “The

Medicare people shuffled around and around ... and

were not really interested unless someone handed

them a case fully worked up, “he wrote. The district

attorney was equally disinclined to pursue the issue,

‘ according to Pickering, even after he mentioned the

death of one of Campbell’s patients. Several of the

people Pickering contacted knew about the problems

at Redding Medical Center, wished any whistle-

blower well, but “would undoubtedly disappear when

the first shot was fired. The conclusion is inescap-

able: Do not blow any whistle! Period. Rationale for

this is: (1) you would be very alone, (2) there is too

much money involved, (3) except for the victims

and/or their families, no on e cares, and (4) you would

instantly find yourself with a bunch of new vigorous

enemies.” Several of those predictions would turn out

to be painfully accurate for Campbell, who ignored

the lawyer’s advice and continued to search for a way

to get Medicare to pay attention. Later that year, he

came across an article in the magazine Medical

Economics about a successful physician whistle-

blower and the federal False Claims Act, which is

intended to encourage employees of companies that

do business with the federal government to report

fraud and abuse. Campbell called the physician, who

referred him to

o7a

Your Local Hospital 89

a New York law firm that specialized in ~histle-

blower-cases. The firm told Campbell he needed more

cases to persuade the government that there was a

serious problem worth investigating. But Campbell

was unable to get other Redding physicians to pro-

duce any cases, even physicians who in private

complained about Moon, Realyvasquez, and Redding

Medical Center. By the summer of 2001, Campbell

was deeply discouraged. He’d exhausted every option

he could think of for alerting the authorities. His wife

was fed up with his obsession, and he still had a

busy primary care practice to tend to. A year later,

Campbell got word that an FBI agent was nosing

around town, asking questions after a few patients or

their families had complained to the agency about the

cardiac program. Throwing his lawyer’s advice to the

wind, Campbell called the agent. That was on a

Thursday afternoon in August; the next morning he

was sitting in the agent’s office in Redding. Worried

that the FBI agent would not believe him, Campbell

arrived with over sixty pages of documents. After

showing the agent his material, Campbell steered

him to a nurse and two other physicians, who would

eventually back up his claims that Redding’s cardiac

team was performing necessary cardiac procedures.

On October 30, 2002, the FBI filed a sixty-seven-page

search warrant affidavit with a judge, based largely

on Campbell’s information. That same day, more

than forty agents from the FBI and the federal

Department of Health and Human Services showed

up without notice at Redding Medical Center and the

doctors’ offices and seized thousands of patient

records and other evidence. Two weeks later, the

stock price of Tenet Healthcare had tumbled from

nearly fifty dollars a share to fifteen dollars. The

58a

Justice Department’s outside experts and a cardiolo-

gist hired by the state medical board would find a

pattern of unnecessary and sometimes negligent care

that represented “an extreme departure from stan-

dards of medicine,” according to one physician who

reviewed the records. In one case at Mercy Medical

Center in 1996, Moon left a sixty-seven-year-o ld man

who had suffered a massive stroke on the cathe-

terization table, in the care of nurses without ade-

quate instructions, and returned to his office. The

man died soon thereafter. Moon would later defend

his actions by saying he had done everything he could

by picking up the phone and calling in a

Your Local Hospital 90

neurologist and a critical care specialist. When

brought before peer review committees at Mercy to

explain his actions, Moon fought back, ultimately

filing lawsuits in state and federal courts against the

hospital. The suits were eventually dismissed. Other

patients of Moon and Realyvasquez survived but

suffered long lasting, debilitating effects from their

unnecessary surgeries. A local rancher named Stephen

Hunt was only thirty-eight years old when he walked

into the emergency room at Redding Medical Center

just before Christmas in 2001, complaining of blurry

vision in one eye. Hunt knew he had high blood

pressure, but he was shocked when Moon told him he

needed immediate bypass surgery—that he could

suffer a heart attack and die on his way back to his

car. Moon also told him there just happened to be an

opening in the hospital’s operating schedule on

Christmas Eve. Hunt went ahead with the surgery.

When the Justice Department gave Hunt’s medical

records to outside cardiologists, they found no evi-

dence that the surgery had been needed. Hunt’s

59a

blurry vision cleared up once his blood pressure was

successfully treated with drugs, but his life would

never be the same after his surgery. He suffered a

hernia at the incision site, which meant he could no

longer do the physical labor of ranching: the fencing,

bucking hay, and moving cattle. Five years later, he

lost his ranch. On August 4, 2003, Tenet Healthcare

Corporation agreed to pay $54 million to settle fraud

charges brought by the federal government. In

return, Redding Medical Center and Tenet were

granted immunity from criminal prosecution. Ulti-

mately, Tenet paid nearly $60 million to settle

federal fraud allegations. and the Department of

Health and Human Services permanently banned

Redding Medical Center from receiving Medicare.

Tricare (which insures members of the military), or

Medi-Cal payments, effectively forcing Tenet to sell

its former flagship hospital. The company eventually

agreed to pay an additional $395 million in restitu-

tion to more than 769 patient s and their families

who sued the company. In all, Tenet would pay the

federal government more than $900 million to settle

charges of unlawful billing practices at Redding and

other hospitals. Shareholder lawsuits amounted to

$ 2 15 million. In January 2003, Moon voluntarily

suspended his practice. The California State Medical

Board opened an investigation.

Your Local Hospital 91

Moon and Realyvasquee agreed to pay $ 1.4 million

each in fines to the federal government, in lieu of

criminal prosecution, while their Medicare billing

privilege s were revoked. There are many lessons to

be drawn from the story of Redding Medical Center,

beyond the obvious fact tha. physicians don’t like to

point fingers at colleagues, even when their reticence

60a

allows patients to be harmed. But perhaps the most

important lesson concerns the powerful effect that

distortions in the reimbursement system can have on

the decisions that hospital administrators make

about how to invest capital resources. These distor-

tions, coupled with policies dating back before the

beginning of Medicare that built up the number of

hospital beds until the early 1980s, have conspired to

leave some cities, or parts of cities, with a surplus of

certain kinds of beds and facilities—while simultane-

ously creating a shortage of others. In Los Angeles,

for instance, there are two and a half times more

intensive care unit beds per Medicare recipient than

there are at the renowned Mayo Clinic, in Rochester,

Minnesota, where nobody would argue that patients

get substandard care. The result of this surplus of

ICU beds in Los Angeles has meant that doctors are

more likely to put patients in the ICU, whether or not

they really need to be there. This kind of overinve-

sunent in profitable service line s can be seen in cities

and towns across the country, in New York, Miami,

and Los Angeles especially—precisely the cities

where Jack Wennberg’s group has found the highest

rates of unnecessary care. We all wind up paying

for it, as this overinvestment drives up costs for

Medicare, state Medicaid programs, and private

insurers. Meanwhile, more than a hundred emer-

gency rooms around the country have closed in the

past decade, victims in part of rising rates of unin-

sured patients appearing at their doors. At hospitals

that have kept their emergency doors open, admin-

istrators have not been eager to add the additional

ER beds that are often so desperately needed,

because that would mean caring for more uninsured

(and unprofitable) patients. Many cities now face a

shortfall of emergency services, and hospitals rou-

6la

tinely divert ambulances because their emergency

departments are completely full. In Cincinnati, for

example, diversions were so rare before 1998 that the

city didn’t even track them. By 2002, the total

amount of time the city’s hospitals were on divert

OVERTREATED 92

status had jumped to 1,970 hours annually, and the

problem just keeps getting worse. In the month of

December 2003 alone, emergency rooms were on

divert status for 1.935 hours. That’s the equivalent of

nearly eighty-two days. I caught up with Patrick

Campbell in June 2006, when he was living in

Eugene, Oregon pulling twelve-hour shifts as a hos-

pitalist overseeing the care of patients admitted to

Sacred Heart Medical Center. When I spoke with

Campbell over the phone, he recalled the events

shortly after the FBI’s 2 0 02 raid in a tone of voice

that veered between incredulity and resignation. “I

remember a day after the raid, I had to go see a pa-

tient over at [Redding Medical Center], and people

were looking at me with hatred,” he said. “Within a

week, everybody in Redding knew who had talked to

the government, even though I was identified on the

FBI affidavit only as ‘D I.’ “Stories appeared in the

Redding Record Searchlight, reporting expressions of

outrage among the local citizenry-not at Moon and

Realyvasquez’s alleged perfidy, but rather at their

persecution by the federal government. The paper

quoted Rhonda Arnold, a medical assistant in Moon’s

office, saying, “I’ve never met a man as honorable as

Dr. Moon.” Colleagues of the doctors said it was an

injustice that patients would be “cardiac cripples” if

not for Moon and Realyvasquez. On November 8,

2002, nine days after the raid, Campbell filed a qui

tom (whistleblower) suit with the u.s. district court,

62a

in Sacramento. A qui tam lawsuit is typically filed by

a private party, alleging fraud against a federal

agency. If the Justice Department investigates and

the fraud is proved, it enables the government to re-

cover up to triple damages and substantial penalties

from the defendants—while the whistle-blower can

potentially receive a portion of the government’s

recovery. By then, Campbell was pretty sure he was

going to need the money to start over in another

town. Patients had left his practice; colleagues

avoided him. The town of Redding was angry with

him. The state medical board would initiate, and

ultimately drop, disciplinary proceedings against

him, putting hi s medical license at risk, after a

patient complained that Campbell had given the

patient’s confidential Your Local Hospital 93 records

to the FBI without consent. His popularity did

not improve when the hospital began laying off

employees. At one point, a group of nurses threatened

to sue him for loss of employment. In June 2003,

eight months after the raid, Campbell was stunned to

learn that the Justice Department had moved to

dismiss his whistle-blower suit in favor of another qui

tam suit that had been filed just three days before

his. The first-to-file whistle-blower was a Catholic

priest named John Corapi, who had gone to Moon in

June 2002 for what he thought was a routine cardiac

checkup and had been told, like so many of Moon’s

patients, that he would die without immediate

surgery. Unlike many patients, Corapi got a second

opinion- in Las Vegas, where an old college buddy,

Joseph Zerga, was an accountant. The doctors there

told him that he had no significant coronary artery

disease. When Corapi and Zerga complained to the

Redding Medical Center CEO and got the brush-off

they went to the FBI. The priest’s legal standing as a

63a

whistle-blower was questionable. The Justice Depart-

ment was suing Tenet Healthcare and the doctors on

behalf of Medicare; Corapi, who was in his fifties,

wasn’t old enough to be a Medicare recipient. The

priest’s contribution tc the FBI’s investigation con-

sisted only of his own medical records; he had no

personal knowledge of any other cases, and his case

involved only an unnecessary cardiac catheterization

and a recommendation for bypass surgery. The sixty-

nine pages of documents that Campbell plunked

down on the desk of the FBI agent, by contrast,

contained case histories covering a ten-year period; a

record of Redding Medical administrators’ ignoring

multiple efforts to bring Moon and Realyvasquez’s

actions to their attention; names of physicians and a

nurse who could corroborate his story; and even a

glossary of medical terms. Even so, the Justice De-

partment took the position that Corapi and Zerga

were the sole whistle-blowers, because they beat

Campbell to the courthouse. In August, the court

granted the Justice Department’s motion to throw

out Campbell’s qui tam suit and subsequently enter

into the $54 million settlement with Tenet Health-

care. Meanwhile, Corapi and Zerga stood to receive

the entire 15 percent of the settlement owed to a

whistle-blower, worth more than $8. lmillion.

OVERTREATED 94

It would take more than two years for Campbell and

his lawyer to get the Justice Department’s decision to

remove him as a whistle-blower reversed. In the

meantime, Campbell’s practice In Redding dried up

completely. His marriage foundered—”J wasn’t the

easiest person to live with,” he said and in 2005, he

left his wife and two children In Redding and moved

to Eugene. When his lawyer filed an objection to the

64a

Justice Department’s decision, assistant U.S. attor-

ney Michael Hirst, the prosecutor in the case,

accused Campbell of being “driven more by greed

than indignation.” The prosecutor praised Corapt and

Zerga, saying publicly, “Their willingness to blow the

whistle on fraud resulted in our putting a stop to the

surgeries and recovering $54 million.” “That was a

low point,” Campbell told me. “It played out in the

local paper as a battle between competing whistle-

blowers, a doctor and a priest, ducking it out in

the courts.” In November 2005, the court reinstated

Campbell’s qui tam suit and he agreed to settle for

half of the whistleblower bounty, giving him nearly

$4.5 million, before taxes and attorney’s fees. Seven

months later, in 2006, his wife and kids were driving

up from Redding for a visit over the Fourth of July

weekend. Campbell had not decided what he would

do next. In the weeks leading up to the settlement, he

had imagined that it would bring some sort of relief,

a sense of closure, and maybe even a small measure

of vindication. But when I spoke with him, Campbell

sounded tired. Some days, he said, he thinks he will

set up a new practice in Eugene or elsewhere; on

other days, he wants to abandon medicine entirely

and embark on a new career. Neither Moon nor

Realyvasquez has ever admitted any wrongdoing.

Shortly after the raid. Moon appeared genuinely

devastated by the charges. Telling reporters his only

goal had been to keep his patients safe from heart

disease. He wept when a group of supporters

strung up a banner that said, WE SUPPORT OUR

DOCTORS! outside the courthouse. Maybe Moon and

Realyvasque2 and the hospital were deliberately

bilking Medicare, as the Justice Department’s

charges against them indicate. Or maybe, as Moon

65a

and Realyvasquez claim, they were making judgment

calls within the wide latitude Your

Local Hospital 95

permitted by the art of medicine, the uncertainty of

cardiology. If that’s the case, then the saga of

Redding Medical Center points to the desperate need

in medicine for clearer standards and better evidence

for what works and what doesn’t. The story of

Redding also highlights the need fat a new way to

pay docters and hospitals, a system that doesn’t allow

financial imperatives to propel clinical decisions.

OVERTREATED 278

Too many patients. Give them the time to practice

preventive medicine. (VHA primary care doctors are

responsible for about fifteen hundred patients, at

least five hundred fewer than the average internist or

family physician.) Use information technology to

improve coordination among doctors. Make hospitals

and doctors accountable by measuring their perform-

ance and the outcomes of their patients. And finally,

gather evidence for what works and what doesn’t.

We could call this strategy CARE, for coordination,

accountability, electronic medical records, and evi-

dence. While the tasks are clear, implementing

CARE around the country won’t be “imple. In order

to do it, we have to rethink the way we pay doctors

and hospitals. The first step is jor Medicare to

address the way it overpays for certain procedures,

like radiology and bypass surgery, and underpays for

less-intensive care. The current system encourages

hospitals to invest in expensive doctors and beds and

technology that aren’t necessary-ly what patients

need. But there are other ways the payment system

makes it hard for doctors to coordinate their care and

66a

leads to unnecessary hospitalizations. Take the ex-

ample of-caring for diabetics. More than thirty

million Americans have diabetes, the product of our

ever-increasing girth and sedentary lifestyle. Over 60

percent of Medicare spending goes toward patients

with chronic conditions like diabetes and heart

disease, and the majority of the money is spent on

hospitalizations for complications that could have

been prevented with proper care. But keeping diabet-

ics out of the hospital requires constant monitoring.

Diabetics who fail to control their blood sugar are

more likely to go blind, suffer heart attacks, or have a

leg amputated because of a wound that won’t heal.

Preventing these complications isn’t rocket science; it

just takes constant work. Patients need to learn to

eat better and exercise. They need to monitor their

blood sugar and take their insulin or other drugs.

They need to see an ophthalmologist regularly to

check for damage to the retina and a podiatrist to

ensure they are caring for their feet. And their

doctors need to check their hemoglobin on a routine

basis to make sure they are controlling their blood

sugar at home. How often does all of this coordinated

care actually happen? Outside of a few systems, like

the VHA, Group Health, and Kaiser, rarely at best.

Let’s

Less Is More 279

look at just one piece of this puzzle, monitoring

hemoglobin. If you have diabetes, your chances are

about one in four that a doctor will actually perform

that test, let alone teach you to check your own blood

sugar level on a regular basis. According to a recent

RAND Corporation study, failing to get their blood

sugar checked leads an estimated twenty-six hundred

diabetics to go blind every year and another twenty-

67a

nine thousand to experience kidney failure. Doctors

and hospitals don’t neglect to treat diabetics properly

because they are lazy or incompetent or don’t care

about their patients. They fail to do it in part because

the payment system punishes them financially when

they do. About seven years ago, a group of idealistic

doctors in Bellingham, Washington, a bucolic coastal

town about an hour north of Seattle, created Pur-

suing Perfection, a program to help participating

medical practitioners prevent diabetes and chronic

heart failure and to better care for patients who

already have the conditions. The program centers on

multidisciplinary teams employing the best practices

for counseling patients, helping them to navigate the

health care system and control their diseases. It also

calls for preventive measures, providing access to

nutritionists and nurses to help patients learn to eat

better and exercise more in order to avoid getting the

conditions in the first place. The doctors have

implemented information technology to allow every-

one involved in a patient’s care to share medical

records and support disease management. Pursuing

Perfection has already improved the health of many

patients. Rebecca Bryson suffers from both diabetes

and congestive heart failure. Before enrolling in the

program she was seeing fourteen different doctors

and taking forty-two medications. When her lungs

would fill with fluid from her congestive heart failure,

she would call a doctor’s office and tell the nurse

what was happening. Sometimes she would get a call

back in an hour, sometimes not for a day. She landed

in the emergency room routinely. Under the new

plan, she has access to a nurse, called a clinical

specialist, who knews her case intimately, helps her

adjust her medic actions, and gets her in to see the

doctor when she needs it. Bryson also has access to

68a

her own electronic medical record, where she can

note reactions to a new medication. With the help of

her clinical specialist, Bryson has learned how to

avoid

OVERTREATED 280

going to the doctor by doing things like checking on

the salt in her diet if her blocd pressure goes up.

These simple steps have had measurable results for

patients across the board, reducing blood sugar levels

in diabetics and preventing crises in heart failure

patients. Pursuing Perfection has not only improved

the lives of patients like Rebecca Bryson, it is saving

both Medicare and private insurers thousands of

dollars per patient and could cut deaths from diabe-

tes by half. But Pursuing Perfection is killing the

local hospital. Between 200 I and 2008, the initiative

will have cost Peace Health’s St. Joseph Hospital, in

Bellingham, $7.7 million in lost revenue because

patients aren’t being admitted as often. The county’s

specialists stand to lose $ 1.6 million from iost pro-

cedures and office visits, and from having to spend

time with patients without being compensated.

Insurers won’ (pay for a nutritionist to teach

diabetics how to eat properly. They pay podiatrists

well to perform procedures, but noi to help a diabetic

learn to inspect his own feet. One group of sixty

doctors, at the Madrona Medical Group, who took

part in planning the initiative, have withdrawn from

the program because participating will cost them too

much money. This is the sorry state of American

health care. Doing what’s best for patients is bad for

business. The problem here is not that there’s no

money; it’s that the money flows through the system

in the wrong way. Hospitals are paid for each episode

of care, each hospitalization, and doctors are paid for

69a

each office visit, each procedure. They aren’t paid to

coordinate the care of diabetics or heart failure

patients, to hire nurses to track a patient ‘s weight or

make sure his lungs aren’t filling up with fluid, or a

nutritionist to help a diabetic understand what

she can and cannot eat. In order for programs like

Pursuing Perfection to succeed, hospitals must work

with all local doctors, not just those who are willing

to lose money in order to help their patients. The way

to do that is to pay them as if they were a single,

integrated group, hospitals and doctors working

together. But that’s not how we do it. Instead, our

insurers pay the hospital one fee and the individual

contractors who work in it—the doctors-another.

Medicare officials are well aware that their own

payment system is working against the health of

patients, and they have proposed a solution to the

Less Is More 281

problem of poor quality called “pay for performance,”

or “P4P.” In phase one, hospitals receive a small

bonus for monitoring their own performance on

seventeen measures of quality. Most hospitals are

now checking such things as what percentage of

diabetics receive an eye exam once a year and how

often heart attack patients are given instructions to

take aspirin or a prescription for beta-blockers. More

performance measures will be added to the list as the

plan progresses. In phase two, hospitals will be paid

another small bonus for actually improving their

scores on each measure. Hospitals that are below

average will eventually be fined. Medicare is also

test-driving a similar plan to measure the perform-

ance of Individual physicians. Doctors fear that they

will be measured on things they can’t always control.

Say a physician has a group of diabetics, for instance,

70a

and she’s taking great care of them, monitoring their

blood sugar regularly and helping them stay out of

the hospital. But one of her patients simply won’t do

what’s necessary to keep himself healthy. He refuses

to measure his blood sugar. He doesn’t take his

insulin. And he eats anything he wants, no matter

how his doctor exhorts him to change his ways. When

Medicare then measures that doctor’s performance,

she may look bad because of one recalcitrant patient.

It’s also difficult to measure an individual doctor’s

performance because patients move between doctors

so often, and they see multiple specialists, making it

difficult to assign responsibility for an individual

patient to a single primary care physician. But the

larger reason we shouldn’t be measuring individual

doctors is that it doesn’t foster cooperation among

them. Medicare’sP4P plan for hospitals won’t either,

because it focuses too narrowly on individual aspects

of a web of events that must happen in order for a

hospital to care properly for a patient. Focusing on a

few discrete measures is like saying you are going to

make a building earthquake-proof by bolting the

furniture to the floor, or reform Social Security by

switching to a cheaper brand of ink for writing the

checks. The question is, how can we move the five

thousand hospitals and eight hundred thousand

physicians in this country to organize themselves into

cooperative groups? One way to do it would be to

allow the VHA to take over failing hospitals. My

colleague Phillip Longman, in his book Best Care.

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.