Saint Thomas physician leaders question management

Physician leaders at three hospitals run by Saint Thomas Health Services in the Nashville area have cast votes of no confidence in management over concerns that an ongoing budget review may lead to deep cuts that damage patient care and alter how the hospitals' medical staffs operate.

The hospital system's top administrator, Chief Executive Officer James P. Houser, responded on Friday by putting the review process on hold for 30 days, until early March, to allow for better communication of the reasoning behind it "to all our stakeholders."

In a letter to doctors and other staff, Houser also disclosed that the health system has suffered a 30 percent loss in an investment fund from which it draws money for major capital projects.

The recent votes by the medical leadership at Saint Thomas Hospital, Baptist Hospital and Middle Tennessee Medical Center, though, called into question Houser's leadership and amount to an attempt by top doctors to influence the hospital system's board before any budget cuts are made.

"The point of it would be to pressure the administration," said Erie Chapman, a former chief executive of Baptist Hospital.

Doctors say their concerns include the possibility that medical leadership for all the local hospitals may be consolidated into a single committee, and that experienced nurses could be lost to the budget ax.

Some doctors say they also believe Houser may be stretched too thin by his dual role as a top executive here and as overseer of a Birmingham, Ala., health system also owned by Ascension Health, the St. Louis-based nonprofit that owns Saint Thomas Health Services and other hospitals around the country.

Physician leaders familiar with the no-confidence votes declined to comment on the record, citing confidentiality pledges among local doctors who took part.

The doctors' stance comes as hospitals nationwide move to trim costs amid the expectation that a weak economy will mean lower revenues this year.

Layoffs, cutbacks and freezes in capital spending for construction and equipment are among actions other hospitals have taken as more patients lose health insurance and have trouble paying their medical bills.

Reports due in March

At Saint Thomas Health Services, administrators were expecting reports shortly from 23 teams of employees from across the system searching for ways to improve financial performance. Houser's decision means those teams' findings will now be due in early March instead of early February, the CEO said.

"We do feel that changes are necessary, given the challenging economic environment," said Rebecca Climer, a spokeswoman with Saint Thomas. "We have also emphasized that this will be a prudent, team approach that first considers patient safety and quality of care."

Among cutbacks at other Ascension-owned hospital systems nationwide, the Austin, Texas-based Seton Family of Hospitals placed some technology upgrades and purchases of nonclinical equipment on hold and cut hiring projections in half for this fiscal year.

Climer said that while some hospital systems have switched to a single medical staff leadership setup, Saint Thomas Health Services would consider that only on the advice of physician leaders. She said Houser spends the bulk of his time in Nashville, even though he also is Ascension's market ministry leader for Birmingham.

Ascension's St. Vincent Health System there has its own CEO to handle daily operations, Climer added.

Saint Thomas posted a loss of $5.1 million for the fiscal year that ended June 30, 2006, according to a filing required of tax-exempt organizations. Last year, net income was $36.8 million with total revenues of $1.1 billion.

Climer said the system is on track to achieve a similar 3.4 percent margin for its current fiscal year, a performance that she considers respectable for not-for-profit hospitals in the current economy. "We've seen significant increases in the number of uninsured patients seeking care from us, patients delaying or avoiding care, and a drastic reduction in our investment income," she said.

Conflict can strengthen

No-confidence votes by a committee of leading physicians at hospitals have become more common as the facilities face pressures from lower reimbursements, increased government regulations and the economic downturn.

Medical executive committees are generally made up of a hospital's most influential doctors or department heads. The committees report to the board and have influence over medical policy and physicians' credentials. Administrators control the purse strings and business operations.

Conflicts can sometimes strengthen ties between a hospital's executive suite and its physicians, if it helps each side understand the other's views more fully. But such battles can lead to a hospital's CEO or some doctors leaving, said John Deane, CEO of Southwind Health Partners LLC, a Nashville-based consultant that helps hospitals employ doctors.

Josh Nemzoff, a consultant based in New Hope, Pa., said doctors see no-confidence votes as a way to get what they want. Nemzoff said it's rare when a hospital's owner fires a top executive over physicians' complaints, though.

At least one member of Saint Thomas Hospital's medical executive committee considers the current budget review to be routine.

"All of medicine is cost-conscious now because of the instability in the economy," said Dr. Timothy Mangrum, an internist and associate chief of medicine, "and we're trying to look at efficiency and trying to make sure we're making the best cost-conscious decisions for our patients, and provide the best care."

Brian Lapps Sr., a former senior vice president at Baptist and now an independent consultant in Nashville, said it takes a lot for doctors to consider casting a no-confidence vote in management.

"It could be a communications problem. They're not being communicated with, or it could be the doctors feel the cuts are too severe and harming patient care," Lapps said. He said Houser's decision to call for a 30-day delay was an appropriate way to say, "Let's all take a deep breath, step back and examine what's going on in view of what's best for the patient."

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