Austin Business Journal
June 12, 2005
By Robin Ewing

Many in the medical community have heard the woeful tales: A doctor overtreats a patient to increase profits. A doctor bills for services not rendered or intentionally codes a procedure incorrectly so the insurance reimbursement is higher.

All of these are ethical breaches cited by medical field leaders in a recent survey by the American College of Physician Executives, the largest health care organization in the United States for doctors in leadership positions. These transgressions deal with the darker side of health care, when medical providers prioritize profits over patients.

Of the nearly 1,500 survey participants, a third said they believed a physician in their organization was involved in unethical business practices. More than half believed that a health care organization in their community was involved in unethical business practices.

“There is a huge problem in this country because of the way health care is funded by the private market, in the sense that there are many conflicts of interest,” says Gerard Magill, executive director of the Center for Health Care Ethics at Saint Louis University.

Last year, the Texas State Board of Medical Examiners received 14,487 complaints and disciplined 256 physicians. But the board’s jurisdiction only emcompasses specific infractions of the Texas Occupations Code, such as unprofessional conduct and professional incompetence.

With 20 licensed hospitals and 2,212 registered physicians, how does the Austin-area medical community ensure ethical business behavior?

“In Austin, we have a pretty good group of physicians. They police themselves very well,” says Dr. Guadalupe “Pete” Zamora, family practitioner, president of the Travis County Medical Society and a member of the Texas Medical Association board that sets ethical policies.

“Relative to the whole population, I think there is a small percentage of people who are unethical,” says Dr. Norman Chenven, founder and executive vice president of Austin Regional Clinic.

“But it’s a fearful thing, because physicians have such influence and power in such an important part of people’s lives.”

Though health care is tightly regulated at the federal and state levels, Austin health care organizations also rely on a complex network of private associations at the state and county levels to address business ethics in medicine.

“Health care is the most highly regulated industry in our country, with the possible exception of nuclear power and financial services,” says Michael Regier, vice president of legal affairs, general counsel and corporate responsibility officer at Seton Healthcare Network.

Seton has a multifaceted corporate responsibility program, Regier says. For one, it offers an anonymous hotline for employees having ethical concerns.

Moreover, Seton has a variety of ethics committees that review policies and procedures, such as caring for the poor, and that appraise interpersonal behavior among staff members and patients.

At Austin Regional Clinic, which employs 155 physicians, peer reviews and quality review committees promote ethical behavior and educate physicians on proper practices, Chenven says.

“We make sure there aren’t any incentives that could lead someone to make a clinical decision that is detrimental,” Chenven says.

For example, doctors at the clinic do not receive compensation for ordering labs or Xrays. Also, pharmaceutical representatives are only allowed to visit the clinic during lunch hours so that patient care is not interrupted. Doctors also perform monthly peer reviews to assess treatment decisions.

Dr. Russ Krienke, medical director at Austin Regional Clinic, says working with a pool of physicians has its advantages.

“An individual physician in a small practice doesn’t have that review. Nobody is ever looking at his patterns and comparing him to anybody to see if he’s in line,” he says.

Many private practitioners are members of the Texas Medical Association, which also sets ethical guidelines on a range of topics, from abortion and assisted suicide to advertising and incentive payments. All doctors are required by the Texas Board of Medical Examiners to complete 24 hours of continuing education annually, including an ethics class.

Physicians historically have been opposed to strict government regulation. A number of bills designed to regulate health care died in the Texas legislature this session.

“Health care in the United States has gotten so ungodly complicated that it starts to create inefficiencies,” Chenven says.

However, in some cases, government is the only regulating force for potential conflicts of interest. For example, the biggest ethical dilemma facing Austin health careproviders is whether a physician-owned hospital is an appropriate business model, says Charles Bailey, general counsel for the Texas Hospital Association.

Federal law prohibits physicians from owning a health care service center, such as a pharmacy or a lab, and then referring a patient to that service — also called self-referral.

This is the most common conflict of interest the Board of Councilors for the TMA deals with, Zamora says.

However, there is no law that prohibits physicians from owning hospitals and referring patients to other physicians within that hospital, Bailey says.

There are number of physician-owned hospitals in Austin, including the Heart Hospital of Austin and Austin Surgical Hospital.

“By a significant number, we lead the nation in physician-owned hospitals,” Bailey says.

Austin is a growing city with a need for more hospital beds, so the impact of physician-owned hospitals isn’t as dramatic as other areas in Texas, Bailey says.

“I don’t think that anyone is necessarily suggesting that doctors are providing unnecessary services, but certainly that is a question that comes up,” Bailey says.

“Physicians shouldn’t be doing the business of medicine,” Magill says. “We’re driving them into a corporate environment that’s not their natural terrain and, therefore by definition, we’re stretching their medical resources and possibly putting them in the line of fire of the big T-word called temptation.”