BY JAY GREENEWhen David Ling, M.D., a hospitalist at

Baystate Medical Center, Springfield, Mass.,learned in 2003 that the 594-bed hospitalwas joining a pay-for-performance demon-stration project, he thought participatingwas the right thing to do because it couldmean delivering higher quality patient care.

Ling also believed achieving higher scoresin the five clinical areas—heart failure,pneumonia, bypass surgery, heart attackand hip and knee replacement—couldmean additional revenue for the hospital.With the bonus money, the hospital couldinvest in quality improvements and the staffcould garner indirect financial rewards.

“We get additional compensation if someor all of the quality indicators are met,” Lingsays. “These are monies—part of the com-pensation pool” that don’t come fromMedicare, he says.

Ling says he is happy with the pay-for-per-formance project because changes made

Continued on p. 2

COV E R STO RY

It’s not just hospitals: Groups alsowrestle with turnover issues Page 4

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Can you really stop them from workingfor competitors? Page 9

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David Ling, M.D., thoughtparticipating in the pay-for-performance projectwas the right thing to do.

Pay-for-performance atthe pocketbook level

to improve quality scores werebased on evidence-based medicine.

“From the very first day, thehospitalists felt we werenot doing anything illegiti-mate to decrease utiliza-tion, we were not doingan inappropriate gain-sharing, and we weren’treducing tests or proce-dures unnecessarily,”Ling says. “Somethings we do increasecosts but improve qualityfor patients.”

The three-year pay-for-performance project—thePremier Hospital QualityIncentive Demonstration—spon-sored by the CMS and coordinatedby Premier, a San Diego-basedhealthcare alliance, offers financialrewards to 268 participating hospi-tals if they are in the top 20% forthe five clinical areas.

Studies have shown there is greatroom for improvement. In a 1999study, the Institute of Medicine esti-mated as many as 98,000 peopledie unnecessarily each year frominfections at hospitals. Moreover, 2 million patients sustain hospital-acquired infections during their stays.

Based on data for the first year,released in September 2004, 123 ofthe top-performing hospitals received$8.85 million in bonus payments.

The project is in its third year, butthe CMS has only validated resultsfor the first year.

“It is not just about the money.

These hospitals all want to improve,and they are moving up as an entiregroup,” says Stephanie Alexander,Premier’s senior vice president of

healthcare informatics.“There also (are) tremen-dous levels of knowledgetransfer between hospi-tals. Some say this is acompetitive bonus pooland hospitals would notbe willing to share, butin actuality these hospi-tals are more willing tolearn from each otherand improve.”

It works like this.Hospitals in the top 10%for one of the five condi-

tions are given a 2% bonus on theirMedicare payments for that condi-tion. Hospitals in the second 10%are paid a 1% bonus. While CMSagreed not to publish the list of 145nonwinning hospitals, the averageimprovement across the five clinicalareas was 11.5 percentage points.

By the second quarter of 2005,the last year of the project, mediancomposite scores had improved to95% from 87% for heart attack, oracute myocardial infarction; 85%from 69% for community-acquiredpneumonia; and 96% from 85% forbypass, or coronary artery bypassgraft. Other scores rose to 85%from 64% for heart failure and 95%from 85% for hip and knee replace-ments. The scores grade hospitalson how often they followed qualitymeasurements for each condition.

Alexander says hospitals that

already had a quality-improvementprocess in place before the projectimproved at a faster rate than thosethat didn’t. “Hospitals need a lead-ership commitment for quality, physi-cian champions and a method forprioritizing projects,” she says.

Based on feedback, the CMS hasadjusted some measurements andis studying unintended conse-quences of others, including thegoal to give antibiotics to all patientswho present themselves to theemergency department with sus-pected pneumonia within four hoursof admission, and beta blockers topatients with heart attack symp-toms, Ling and several others tellModern Physician.

“We are concernedthere may be overtreat-ment to hit high scores,”says Mary Jo Cagle, M.D.,vice president of medicalaffairs and chief medicalofficer with Bon SecoursSt. Francis HealthSystem, Greenville, S.C.For example, “If chest X-rays are slow coming backin the emergency depart-ment you run a real temp-tation to give patientsantibiotics whether theyneed them or not to stay within thefour-hour guideline.”

Another concern, says EvanBenjamin, M.D., Baystate’s vicepresident for healthcare quality, isthat some surgeons may not con-duct hip and knee replacement sur-gery on high-risk patients because

they want to keep mortality ratesand complications low.

“We are getting some pushbackfrom the medical staff,” Benjaminsays. “In reality, the goal shouldn’tbe 100% for all measures becausesome hospitals may be too aggres-sive. It is not a large concern now,but once all hospitals start partici-pating there will be real competitionto hit those numbers.” Benjaminsays some measures should be low-ered. “If a hospital starts out at75%, moving up to 95% will improvequality but the extra 2% to 3% maybe too much,” he says.

“The decision to pay more partiallyrests with mortality rates and com-plications,” Cagle says. “This places

a huge stress on physi-cians and hospitals. TheCMS needs to carefullylook at how they risk-adjust mortality rates andpossibly make somechanges” before expand-ing the program to includeall hospitals.

Bon Secours St. Francisgot a bonus check ofabout $54,000 for scor-ing in the second 10% forthe heart attack category.In 2004, the 237-bed

hospital earned $8.95 million in net income on net revenue of$212.3 million.

By making quality improvementsthe past two years, St. Francis hasunofficially improved to the top 20%in heart attack, bypass and hip and

COV E R STO RY

Continued from p. 1

Continued on p. 3

Alexander:Hospitals learnfrom each other.

Cagle:Overtreatment isa concern.

Modern Physician | April 2006 • 2

Baystate received nearly$400,000 in bonus payments,which amounted to about 0.25%of net Medicare revenue of $190million, Benjamin says.

Overall, Baystate increased itsscores to 99% from 96% for heartattack; 98% from 95% forbypass; 86% from 76% for heart

failure; 88% from78% for pneumo-nia; and 92% from81% for hip andknee replacements.

To improve careof pneumoniapatients in theemergency depart-ment, Baystatecreated opt-outstanding orderswith its computer-

ized physician order-entry system.“Doctors have to uncheck theimmunization order if they want itstopped,” Benjamin says. “This ismore successful than opt-inbecause immunizations are usuallysecond priority.”

Baystate also hired two clinical-effectiveness nurses to work withphysicians on medical floors toensure best practices are followed,Benjamin says. “This is a very effec-tive way to remind doctors to achievequality measures,” he says. ■

knee replacements, she says. “Forus, this is about rapid improvementand trying to better ourselves andlook at processes on a weekly andmonthly basis,” Cagle says. “Weapproach quality improvement muchdifferently now.”

For example, one project was toreduce “door to bal-loon time” to 90minutes for heartattack patients. Foremergency depart-ment patients, anew process wascreated with hot-pink colored check-lists to make surethe staff communi-cates with para-medics and notifiescatheter laboratories and cardiolo-gists. “Before, it took me 60 daysto generate reports. Now, we havereport turnaround within 15 days,”Cagle says.

St. Francis’ scores improved to98% from 90% for heart attack;88% from 72% for pneumonia;100% from 93% for bypass; 99%from 92% for hip and knee replace-ments; and 88% from 73% for heartfailure, Cagle says.

Like all hospitals, Baystateformed teams made up of clinicaland administrative staff to developquality-improvement plans. Duringthe first year, Baystate scored inthe top 10% for heart attack andbypass and in the second 10% forheart failure and pneumonia.

COV E R STO RY

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Continued from p. 2

Baystate received nearly$400,000 in bonus paymentsduring the first year.

Modern Physician | April 2006 • 3

Jay Greene is a former ModernHealthcare reporter and now afreelance healthcare writer basedin Thompson, Conn. ContactGreene at jaywriter@charter.net.

BY MICHAEL ROMANOThe average annual turnover rate

for doctors in U.S. medical groupsfell to 6.4% in 2005, well below therate of about 9% the previous year,according to an annual physician-retention survey.

The survey, conducted by CejkaSearch and the AmericanMedical GroupAssociation, also foundthat about 60% of therespondents believe thatthe national turnover ratewill increase over the nexttwo years, down from 68%a year earlier, when thefirst national retention sur-vey was conducted.

Despite the nationwidedecrease in turnover andfewer people expectingturnover to increase,turnover in medical groups large andsmall continues to be a major con-cern as practices seek to recruitand retain physicians, especiallyhard-to-find specialists.

The survey indicates that more andmore medical groups are takingsteps toward improving retention,with 58% saying they have institutedprograms to keep doctors in the fold.That figure jumped by about 10 per-centage points over 2004. The mostfrequently mentioned initiativesinclude expanded mentoring and ori-entation programs, flexible hours,

deferred compensation plans andloan-repayment programs.

The nearly 3 percentage point dropin turnover from 2004 to 2005 canbe explained, at least in part, onhow the statistics were gathered,according to a Cejka spokesperson.In the first survey, medical groups

were asked to approxi-mate their turnover overthe previous year. In the2005 survey, organiza-tions used specific figures.

Based on responsesfrom 95 AMGA-affiliatedmedical groups ranging insize from fewer than 50physicians to more than500, the survey alsofound about 47% of therespondents reportedbeing highly concernedabout turnover, and more

than one-third placed turnoveramong the top three issues facingtheir group practice. The survey alsoshowed that turnover is highest dur-ing the early years with a group.About 47% of doctors left within thefirst three years, and about 60% quitwithin the first five, the survey said.

“Retention starts with recruit-ment,” says Carol Westfall, presi-dent of Cejka Search, noting that afocus on formalized retention pro-grams—as well as cultural andbehavioral issues—during recruit-ment will help lower turnover. ■

Turnover falls to 6.4%Rate of physicians leaving med groups still a concern

N E WS

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on the path to quality health care, contact us at 847/853.6060 or info@aaahc.org, or visit www.aaahc.org.

Westfall: “Reten-tion starts withrecruitment.”

Modern Physician | April 2006 • 4

Medical malpractice insurancerates, which skyrocketed aboutfive years ago and forced manyphysicians to move or limit high-risk services, have stabilized inthe last half year or so, accordingto a new study by Americans forInsurance Reform, a con-sumer lobbying groupthat opposes limits onmalpractice lawsuits.

But the insurance groupwhose figures were citedin the report accusesAmericans for InsuranceReform of manipulatingdata to support a “prede-termined conclusion.”

The Americans forInsurance Reform reportshowed that the averagemalpractice insurancepremium for the third andfourth quarters of 2005 did notincrease at all, even as the med-ical community continued its cam-paign for strict caps on noneco-nomic damages in malpracticelawsuits.

The consumer group’s study, citingfigures from the Council of InsuranceAgents & Brokers, also noted thatthe average rate hikes amounted tojust 2% in the first and second quar-ters of last year after jumping asmuch as 48% as recently as the sec-ond quarter of 2003.

But the council cautioned againstreading too much into the reportbecause the absolute levels ofmalpractice rates are still high.While its quarterly commercial mar-ket survey does indicate that aver-age medical malpractice premiums

“held steady,” the insur-ance group says, it wouldbe a “gross misrepresen-tation” to use the data tosuggest that the so-called malpractice insur-ance crisis is over.

Just last month,Washington Gov. ChristineGregoire signed a com-promise medical malprac-tice bill that resolvesmany of the long-runningsticking points betweendoctors and trial lawyers.

Gregoire, a Democrat,helped lead negotiations on the bill,which goes into effect 90 daysafter the Legislature adjourns.

The bill would require hospitalsto report serious medical mis-takes to state regulators; give thestate insurance commissionerauthority to approve malpracticeinsurance rate increases and col-lect information about closed mal-practice claims; and set up a sys-tem of voluntary arbitration formalpractice cases, with maximumawards limited to $1 million. ■

Med-mal rates flat: studyInsurers dispute findings by consumer group

N E WS

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Visit modernhealthcare.com/30to participate!

Be A Part Of The Show!Gregoire helpednegotiate theWashington bill.

Modern Physician | April 2006 • 5

BY MICHAEL ROMANO AND LAURA B. BENKO

Credentialing made easyThree big healthcare organizationsthat formed a national coalition toreduce administrative costs andcomplexity decided to focus theirefforts on three key areas, includingstandardizing physician credential-ing, officials for the group say. TheHealthcare AdministrativeSimplification Coalition, which hasmet three times, was organized bythe Medical Group ManagementAssociation, the American Academyof Family Physicians and theAmerican Health InformationManagement Association. Othermembers include the AmericanCollege of Physicians, the AmericanHospital Association and a handfulof big employers, including MicrosoftCorp. The CMS also is involved.Officials with the coalition say theywant to reduce redundancy in physi-cian credentialing, and standardizeprocesses for identifying and con-firming patient insurance coverage.

Guidance on gift-givingThe Association of AmericanMedical Colleges formed a taskforce to recommend how medicalschools can identify and manageconflicts of interest and guardagainst undue influence fromdrug and device companies. Thetask force will suggest “safe-guards to ensure that industrymarketing efforts do not under-mine the objectivity of educationalprograms or otherwise bias theevidence-based decisionmakingof physicians,” AAMC President

Jordan Cohen said in a newsrelease. Creation of the taskforce by the AAMC’s executivecouncil follows growing criticismof drug and device companies’influence, including a call fortough new standards in an articleco-authored by Cohen and pub-lished by the Journal of theAmerican Medical Association.The article contends that industrygifts to physicians and fundingare undermining clinical care andcompromising medical research.

Pilot to study doc performanceA national pilot program will examinewhich doctors provide the best careand how they do it. The program,sponsored by the Ambulatory CareQuality Alliance with funding fromthe CMS and the federal Agency forHealthcare Research and Quality, isconsidered a first step toward devel-oping payment systems that rewardphysicians who provide higher-qualitycare. It will look at data on physicianperformance across all public andprivate insurance programs, yieldinga more complete picture of qualitycare than previous studies, officialssay. Data collection for the pilot willbegin May 1. Six groups will partici-pate: California CooperativeHealthcare Reporting Initiative, SanFrancisco; Indiana HealthInformation Exchange, Indianapolis;Massachusetts Health QualityPartners, Watertown; MinnesotaCommunity Measurement, St. Paul;Phoenix Regional Healthcare Value

B R I E F LY

Continued on p. 7

May 10-12

2006San Francisco Marriott

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8th Annual NPSF Patient Safety CongressThe National Patient Safety Foundation (NPSF) recog-nizes that the field of healthcare must translate theo-retical models of culture change and accountabilityinto the everyday practice of medicine and decisionmaking by healthcare leaders and clinicians. Leadersand organizations who have led change will presentsuccessful strategies that promote patient safety acrossthe continuum of the healthcare system.

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Introductions & Overview of the DayDavid M. Lawrence, MD- Retired Chairman and CEO,Kaiser Foundation Health Plan and HospitalsWhat Patients Expect From Their Healthcare SystemJames B. Conway, MAM, CHE - Senior Fellow, IHI, SeniorConsultant, Dana-Farber Cancer InstituteVirginia Mason Case PresentationRichard Bohmer, MD, Associate Professor HarvardBusiness SchoolGary S. Kaplan, MD, FACMPE - Chairman and CEOVirginia Mason Medical CenterSarah Patterson, MHA, FACMPE - Executive VicePresident and Hospital Administrator, Virginia MasonMedical CenterLeverage Points for LeadersA panel of experts from all levels of healthcare man-agement will present levers they have used anddescribe the successes and the challenges they haveexperienced. Engaging PatientsPatricia Sodomka, FACHE - Senior Vice President,Patient and Family Centered Care MCG Health, Inc.Engaging PhysiciansJack Silversin, DMD, DrPH - President, Amicus, Inc.Integrated AccountabilityWilliam F. Jessee, MD, FACMPE - Vice Chair, Board ofDirectors Exempla Healthcare President and CEOMedical Group Management Association Randall L. Linton, MD - President and CEO, LutherMidelfort, Mayo Health SystemFor Executive Leadership and Middle ManagersExercise and joint summary of issues Creating A CAREing CultureAnn Rhoades, President, People Ink, Former ExecutiveVice President of People for JetBlue Airways, VicePresident of the People Department, Southwest Airlines

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Disclosure and Apology – Stories from Doctors and Patients

Lucian L. Leape, MD, Adjunct Professor of Health Policy,Harvard School of Public Health, DistinguishedAdvisor, NPSF Jo Shapiro, MD, Associate Director of GraduateMedical Education, Brigham and Women’s Hospitaland Massachusetts General Hospital; Chief, Division ofOtolaryngology, Brigham and Women’s Hospital;Associate Professor of Otology and Laryngology,Harvard Medical SchoolGeorges Peter, MD (patient), Professor of Pediatrics,Emeritus, Brown Medical School

Third Annual Distinguished Advisors Town Hall MeetingFeaturing: Carolyn Clancy, MD; David Lawrence, MD;Lucian Leape, MD; James Conway, MAMModerated by: Margaret O’Kane, MHA, President ofNCQA andRosemary Gibson, MSc, author of Wall of Silence

Our Time, Our Watch, Our Work; Nurse Leaders in Action

Timothy Porter O’Grady, PhD, RN, Senior Partner, TimPorter-O’Grady Associates, Inc.Kathleen M. Bartholomew, RN, RC, MN, Clinical NurseManager, Orthopedics, Swedish Medical CenterCaryl Z. Lee, RN, MSN, Program Manager, VA NationalCenter for Patient SafetyNellie Robinson, RN, MS, Vice President, PatientService, Children’s National Medical Center

Modern Physician | April 2006 • 6

Measurement Initiative; and theWisconsin Collaborative forHealthcare Quality, Madison.

AMA hops on P4P bandwagonSome physician organizations areupset about what they describe as asecret deal reached by the AmericanMedical Association with lawmakersto develop about 140 quality meas-ures to be used in a Medicare pay-for-performance program. While theeffort may be crucial in the reformof a Medicare physician-pay systemlong criticized as flawed and mayavert future cuts in Medicare ratesfor physicians, the groups say theywere not consulted when the AMAsigned the deal late last year. TopAMA leaders reached the agreementwith three lawmakers, as Congressdecided to roll back a scheduled4.4% physician pay cut. Under theagreement, the AMA says it willdevelop the measures covering34 clinical areas by year-end.

Always say you’re sorryAbout 80% of physicians sayproviders should apologize topatients for medical errors, and 61%say they believe that apologizingwould result in fewer malpracticelawsuits, according to an online sur-vey of 1,019 physicians by theAmerican College of PhysicianExecutives. In a separate ACPE tele-phone survey of about 1,000patients, 57% of the patients saythey would be less likely to sue afteran error if the doctor or hospital

involved apologized. Support for con-trition is becoming more wide-spread. About 20 states now havelaws that protect doctors and health-care organizations from having theirapologies used against them incourt. The surveys also indicate thatdoctors believe medical errors arecommon on the part of at leastsome practitioners. In fact, 77% ofthe physician respondents say therewas a doctor in their communitythat they would avoid “because theythink the doctor makes medical mis-takes,” the ACPE says.

Seeking on-call all-clearFlorida healthcare leaders are seek-ing federal antitrust clearance for aplan to allow hospitals to createregional on-call schedules for physi-cians, addressing a statewideshortage of on-call coverage.Members of the EmergencyDepartment Management Groupmet with Justice Department offi-cials recently for a briefing on theissues involved, and the consortiumnow must draft a detailed plan forthe department to review, says AlanLevine, secretary of Florida’sAgency for Health CareAdministration. The consortium alsoincludes Bethesda MemorialHospital in Boynton Beach, theHealth Care District of Palm BeachCounty, HCA, the Palm BeachCounty Medical Society and TenetHealthcare Corp. There is no time-line for a finished proposal, butLevine says he hopes the workwould be done quickly.

B R I E F LY

Continued from p. 6

Modern Physician | April 2006 • 7

O P I N I O N

Funny how quickly you can eat upcolumn inches when you’re on agood rant. That happened to me afew weeks back when I was writingan editorial about physician-ownedspecialty hospitals for the March 20issue of Modern Healthcare, our sis-ter publication. In theeditorial, I reaffirmedModern Healthcare’s(and ModernPhysician’s) support ofsuch facilities, whichwe believe unfairly havebecome the scorn ofthe healthcare industry.But, I could have usedanother few paragraphsto fully vent my frustra-tion on the matter.

As I said in that editorial, after youstrip away all the rhetoric over qualityand access, the debate is reallyabout patient referrals. The fact isthat hospitals want to stop physi-cians from referring their patients tophysicians’ facilities and insteadhave them continue to refer patientsto the hospitals’ own facilities.

Having covered the healthcareindustry for more than 20 years, Ithink the hypocrisy is obvious. WhenMedicare implemented its prospec-tive pricing system for inpatient carein 1983, it fixed payments to hospi-tals for each case.

How did hospitals respond? Theydiversified! They expanded into outpa-

tient services. They expanded intoservices like home care, hospice anddurable medical equipment. They con-trolled referral patterns by creatingnetworks with smaller hospitals andby acquiring physician practices out-right. To survive in the fixed-reim-

bursement era, hospitalsgot very entrepreneurial.

Physicians wanted to dothe same thing. Theybegan owning their ownlabs, imaging equipmentand other ancillary serv-ices. But other turf-con-scious physicians andproviders largely stoppedthem by sponsoring cus-tom research that pur-ported to prove that

physicians were unnecessarily refer-ring patients to their own services.

They pressured Congress to passthe Stark I and Stark II pieces of leg-islation, which bar physicians fromowning ancillary services if theywant to participate in the Medicareand Medicaid programs. The onlything physicians still could own wasa whole hospital. And now, generalacute-care hospitals want to stompthat out, too.

In the war over physician-ownedspecialty hospitals, general acute-care hospitals say they just want alevel playing field. If they really believethat, they should start getting out ofall the side businesses they own. ■

Leveling the fieldAcute-care hospitals can’t have it both ways in specialty battle

L E T T E R S

DAVID BURDAEditor

What do you think? Let us and your fellowModern Physician readers know. Send yourletter to the editor to moddoc@crain.com.

ASCs and transparencyPatients should be able to com-pare the quality and price for thecare they need. A lack of informa-tion, as well as restrictions oninsurance coverage, often keeppatients from knowing theiroptions and following doctor’sorders. For example, Medicarepatients needing outpatient sur-gery could choose an ambulatorysurgery center, where procedurescost an average of $320 lessthan if they were to go to a hospi-tal outpatient department.

But as your editorial under-scored, the current Medicare sys-tem makes it nearly impossiblefor patients to make even themost basic comparisons. And, forthe patient, cost is only one ofmany ASC benefits, which alsoinclude convenience, comfort andcustomer service. ASCs play acentral role in creating a modern,innovative care system by provid-ing better patient satisfaction andlower costs.

Kathy BryantPresident

Federated Ambulatory SurgeryAssociation

Alexandria, Va.

Modern Physician | April 2006 • 8

Editor’s note: The following lettersappeared in Modern Healthcare, ModernPhysician’s sister publication, but theyaddress topics routinely covered inModern Physician. We believe theopinions shared below would be ofinterest to Modern Physician readers.

IT not so simpleWe must exercise a bit of cau-tion in the way we describe thechallenges of automating health-care processes. I get concernedwhen I see statements madedescribing the implementation ofpersonal health records as“such a simple thing.” Theimplementation of electronicmedical records is anything butsimple. At best, this view isnaive and does not appear toreflect an understanding, notjust of the challenges in imple-menting technology, but also thenontechnical aspects of imple-mentation, including security,trust and funding. If we are toachieve the promise of the signifi-cant impact that information sys-tems can have in curing the ills ofour healthcare system, we needour leaders to present the reali-ties of the problems ahead andface those problems head-on.

Douglas AbelChief information officer

Anne Arundel Health SystemAnnapolis, Md.

notion that an individualpatient’s right to continued carewith a particular physiciantrumps the public interest.

Tennessee has taken an inter-esting but somewhat confusingapproach to physician noncom-petes. The TennesseeLegislature expressly permitsrestrictive covenants amongphysicians employed by a hospi-tal or medical faculty plan, butmakes no provision for other pri-vate medical practitioners.

Tennessee courts,however, haverefused to expandthe breadth of theLegislature’s procla-mation to include pri-vate medical prac-tices, and haveexplicitly held thatunless the restrictionis specifically providedby statute, therestrictive covenant is

not enforceable. The Idaho Supreme Court has

refused an outright ban on physi-cian restrictive covenants, butinstead leaves the determinationof the reasonableness andenforceability of noncompetes tothe court or jury.

In doing so, Idaho has adoptedthe views espoused by Arizonaand New Jersey, which like Illinois,Indiana and other states, contin-ues to evaluate the enforceabilityof physician noncompetes on a

enforceable depending on thestate in which the physician prac-tices. The following provides aglimpse of how some states treatphysician noncompetes.

Please see the table in the arti-cle on the Duane Morris Web siteat duanemorris.com/articles/article2115.html,which has a state-by-state analysis ofphysician noncom-pete agreements.

As physician prac-tices become moreemployer/employee-oriented, physicians,physician groups andadministrators mustunderstand the rolethat covenants-not-to-compete play in their respectivemedical fields.

Indeed, it becomes critical forphysicians who have partneredwith other physicians or enteredinto employment agreements toknow whether they are barred bysuch covenants when seeking tochange their employment statusor affiliation.

Similarly, administrators inter-ested in protecting their prac-tices need to know whether theycan enforce such provisions. Asphysicians move toward group

In nearly every industry in theUnited States, employees, salesrepresentatives and corporate exec-utives, to name a few, routinelyenter into noncompete agree-ments. A typical noncompete agree-ment prohibits the employee, salesrepresentative or executive fromleaving his or her company andworking in a given area in the sameindustry as his former employer fora certain amount of time.

Assuming restrictive covenantscontain reasonable terms, courtsgenerally enforce them, therebypotentially barring the individualfrom working at the new companyfor some specified period.

Many physicians and physiciangroups adhere to a common mis-perception that such agreementsare not enforceable. Whethercouched as physician covenants-not-to-compete, restrictivecovenants, or noncompete agree-ments, agreements purporting tolimit a physician’s right to com-pete with a former employer orpartner may or may not be

CO M M E N TA RY

All about noncompetes practices and employer-employeerelationships and away from theindividual physician paradigm,the enforceability of noncom-petes plays a significantlygreater role.

Depending on the state in whicha physician practices, the restric-tive covenant may be enforceableby law. In Illinois, for example,such agreements are enforceable,so long as they are reasonable.Contrary to the public policy inmany states, Illinois believes that

enforcing noncompetes benefitsthe health of its citizens. AnIllinois court ruled: “A restraintsuch as the present one is cer-tainly not injurious to the public atlarge. Defendant can be equallyuseful to the public interest bypracticing his medical specialty insome location other than the pro-hibited area, since the health ofindividuals living elsewhere in thisstate is just as important.”

Pennsylvania courts take asimilar tack in enforcing noncom-pete agreements, rejecting the

Agreements aren’t enforceable in every state

If you’re a physician and you’d like to tellyour business story, please contact us atmoddoc@crain.com. Submissions shouldbe no longer than 1,000 words and shouldinclude a color photo of the author.

Modern Physician | April 2006 • 9

BY FREDERICK BALL, KATHERINE BENESCH AND RICHARD DARKE

Continued on p. 11

Ball Benesch Darke

S P EC I A L R E P O RT

BY ED FINKELMany Americans rely on a trusted internist and

constellation of specialists for their healthcare;others, who lack adequate health insurance, relyon public clinics and, all too often, hospital emer-gency rooms for basic services. Then, there are

those who don’t know where the nearest clinic orhospital is, don’t have a documented medicalhistory and are unaccustomed to dealing with—or leery of—the healthcare system.

Migrant workers—whether in farming or jobs inmeatpacking and construction—face these chal-lenges and more, including diseases and injurieslittle-known to many physicians, along with lan-guage barriers and cross-cultural hurdles, sinceso many are from Mexico and other parts ofLatin America.

The Migrant Clinicians Network, a 22-year-oldmobile clinic based in Austin, Texas, works toimprove healthcare for migrants. The network han-dles training and technical assistance and pub-

Services, Traverse City, and Delmarva RuralMinistries in Dover, Del.

“They were working with a migratory populationand a health delivery system that was completelygeographically bound, and not dynamic in termsof being able to cope with any kind of movement,and not particularly able to cope with a disenfran-chised population, a population that was cultur-ally different,” says Chief Executive Officer KarenMountain, who has led the network since 1987.

The network has worked hard tobroaden information networks to facili-tate transfer of migrants’ medical his-tories, says Ed Zuroweste, M.D., med-ical director. “Our tracking systems,the first of which was for tuberculosis,have been very successful in followingpeople through a treatment regimen,”he says. “We’ve been able to trackthem and help case-manage them, notonly all over the United States but withour TB partners in other countries,through Mexico and Latin America.”

The migrant population faces particu-lar occupational hazards like muscu-

loskeletal injuries and environmental hazardssuch as pesticides, and water and sanitationissues, says Amy Liebman, occupational environ-mental health specialist and the network’s pointperson for disseminating resources and trainingunits to help clinicians deal with them.

“Agriculture, as well as the other occupationsof the mobile populations we serve are involvedin—construction, meatpacking—are very haz-ardous,” she says.

Other common conditions that Zuroweste seesare chronic illnesses such as hypertension, dia-betes and TB. McLaurin adds to the list heart dis-ease, infant mortality and the lack of preventivecare such as immunizations. “Migrant and mobilepopulations have much, much poorer outcomes,

lishes best practices information for providers, ofwhom 2,000 are members and more than 7,000received assistance in the past year. The networkalso provides direct service through a free track-ing-and-referral program for tuberculosis, diabetesand cancer patients, serving 1,400 inthe past year.

“These clinicians are seeing popula-tions that are circling nationally,” saysDeliana Garcia, director of internationalresearch and program development.“They’re confronting some of the samethings their colleagues are confronting600 (or) 1,000 miles away. ”

Through its conferences and pub-lished materials, the network has builtbridges, Garcia says. “It’s a touch-stone,” she says. “You know whereyour colleagues are in the world, youare learning from them what strategiesthey’ve employed, what works, where there areproblems. That’s the critical piece.”

“We just want this population to be noticed,”says Jennie McLaurin, a pediatrician and directorof the network’s Health Disparities Collaborative,which works to close the gap in healthcareamong racial and ethnic minorities. “So often,they’re invisible to the general population, andthat would include the general population ofphysicians. … They’re a hidden population evento people 30 minutes away.”

The seed for the Migrant Clinicians Networkwas planted at the annual Migrant HealthConference in 1984, during a chance hotel-lobbyconversation between a physician at Brownsville(Texas) Community Health Center and registerednurses from Northwest Michigan Health

A health fair in Austin, Texas, by the MigrantClinicians Network offers health information.

Zuroweste:Tracking helpstreatment.

Modern Physician | April 2006 • 10

Patients in motionNetwork meets unique challenges in treating migrant workers

Continued on p. 11

M A R K E T P L AC E Modern Physician | April 2006 • 11

case-by-case basis. Many of these state courts

refuse to enforce physician non-competes because of the traumaticeffects they could have on thepractitioner, his or her family andthe community at large.

Absent reasonable geographic,time and activity limitations,courts may not enforce arestrictive covenant. In otherstates, despite the unreason-ableness of a provision, courtsengage in “blue penciling,”which is essentially a redraftingof the unreasonable provisionto make it reasonable.

Other jurisdictions, such as theDistrict of Columbia andMassachusetts, have banned

as you might expect,” she says.The network aims “to bring them atleast up to national standards.”

Cultural barriers present anotherchallenge. “They have differentstandards on how to accesshealthcare anddifferentresources,” shesays. “They’reused to, if they’refrom Mexico, buy-ing prescriptionsover the counterin a store. They’renot used to goingto doctors unless

they’re really, really sick.”Migrants from Latin America are

used to emphasizing good nutritionrather than medical intervention andpharmaceuticals, Mountain says.

Migrants’ leeriness has noticeablyincreased in the past five years in

the post-9/11political climate,Mountain says.“As the social envi-ronment started tobecome more con-servative—notthat immigrantshave ever beenpopular—but itappears to have

interfered with the ability to accesshealthcare as liberally as they hadbeen,” she says.

But other challenges date to theorganization’s founding, he says.“The struggle is still finding ade-quate enough providers to work invery rural, poor areas of the coun-try, and both recruiting and retain-ing providers who are linguisticallyand culturally competent to takecare of a diverse group of hard-working people.” ■

Docs have to take into accountmigrants’ living conditions.

covenants-not-to-compete alto-gether. Some states, on the otherhand, have declared covenantsnot-to-compete void as a matter ofpublic policy, but have providedcertain exceptions to the rule,such as the sale of the good willof a business.

Yet others permit covenants,but legislate their terms.Interestingly, while Delaware andColorado ban covenants-not-to-compete in physician contracts,they permit a former employer tosue for monetary damages relatedto unfair competition.

As physicians’ practices evolvefrom the sole practitioner paradigmto practice groups and employer-employee relationships with hospi-tal and other medical facilities, theenforceability of noncompeteagreements becomes increasinglymore important.

This is true for both practicingphysicians who enter into suchagreements, as well as hospitaland practice-group administra-tors that seek to enforce non-compete agreements.

It is critical to all parties involvedto know the detriments and bene-fits of noncompetes before enter-ing into them. Indeed, a well-draftedcovenant may be enforceable, butone that is unreasonably broadand otherwise poorly drafted mayprove worthless. ■

Ball, Benesch and Darke areattorneys in the Chicago office ofDuane Morris.

COMMENTARY from p. 9

SPECIAL REPORT from p. 10

Ed Finkel, a freelance writer andfrequent Modern Healthcarecontributor based in Evanston, Ill., canbe reached at edfinkel@earthlink.net.

BY T H E N U M B E R S

PAY-FOR-PERFORMANCE LIFESPAN

Source: Med-Vantage, medvantageinc.com

Med-Vantage researchers surveyed pay-for-performance program sponsors in 2003 and 2004 to track the growth of the incentive-based programs. Of the surveyed programs, two-thirds have been in existence for four years or less.

Duration of pay-for-performance programby percentage of respondents

Less than a year

FOR-PROFIT GROWTH

INCENTIVE PROGRAMS BUILD MOMENTUM

Source: American Hospital Association

Investor-owned hospitals gaining market share

Pay-for-performance programsby sponsor type

04 1

51

95 6

32

60

39

84

Other CMS Medicaid Employer Health Plan(HMO/PPO)

Total

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

752

14.5 14.815.8 15.4 15.1 15.2 15.4 15.5 16.1

17

759 797 771 747 749 754 766 790835

Number of for-profit hospitals Percentage of all hospitals

Source: Med-Vantage, medvantageinc.com

June 2003 November 2004

34%

24%

16%

26%

1-2 years3-4 yearsMore than 5 years

Modern Physician | April 2006 • 12

N E WS M A K E R S

ACADEMIAAllen Spiegel, M.D., was appointeddean of the Albert Einstein Collegeof Medicine of Yeshiva University inNew York. Spiegel, 59, replacesDominick Purpura, M.D., who wasdean at Einstein for more than 20years. Spiegel most recently servedas director of the National Instituteof Diabetes & Digestive Diseases &Kidney Diseases of the NationalInstitutes of Health, Bethesda, Md.

AMBULATORY CAREAlliance Surgery, an Atlanta-based

developer andoperator of ambu-latory surgery cen-ters, namedCharles Neal aschief operatingofficer. Neal, 57,will manage anddirect Alliance’splanning, imple-mentation and

operation of ASCs, says the com-pany, which manages nine ASCs insix states. Neal formerly was presi-dent of Symbion Healthcare, wherehe managed 47 ASCs in 17 states.

ASSOCIATIONSThe new president of the American

Health Quality Association is SallieCook, M.D., chief medical officer ofthe Virginia Health Quality Center.Cook, 55, will serve as president ofthe association, which representsMedicare-contracting quality-improve-ment organizations, until February2007. … Fred Graham, a longtimeemployee of the Medical GroupManagementAssociation whorose to senior vicepresident and COObefore his retire-ment in 1996, diedFeb. 1 after a 10-month battle withcancer. He was 61.

GOVERNMENTKathleen Annette, M.D., wasinducted into the NorthwestMinnesota Women’s Hall of Fame.Annette, 50, is the director of theBemidji (Minn.) Area Indian HealthService and a member of the WhiteEarth Band of Chippewa Indians.Annette works with34 federally recog-nized NativeAmerican tribesand five UrbanIndian programsthat provide health-care to more than95,000 beneficiar-ies in five states.

GROUPSSteven Nissen, M.D., a pioneer inthe development of intravascularultrasound and president-elect of

the American College of Cardiology,was named interim chairman of theCleveland Clinic’sdepartment of car-diovascular medi-cine. Nissen, 57,replaced EricTopol, M.D., a car-diologist who leftfor a position atCase WesternReserve University.

HOSPITALS, SYSTEMSAtlantic Health System, FlorhamPark, N.J., named Donald Casey Jr.,M.D., 53, to the new position ofvice president of quality andchief medical officer. He hadbeen CMO of Catholic HealthcarePartners in Cincinnati. … AkramBoutros, M.D., 43, executive vicepresident and chief medical offi-cer at South NassauCommunities Hospital,Oceanside, N.Y., was given theadded responsibility of COO.

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SUPPLIERS, VENDORSRobert Crocker, M.D., was namedto the newly created post of chiefmedical officer forAmerican SpecialtyHealth, a SanDiego specialtybenefits organiza-tion. Crocker, 52,most recentlyserved as nationalmedical directorand senior vicepresident forWellPoint. ... Larry Brilliant, M.D.,an epidemiologist with an extensivebackground in global public-healthissues, was named executive direc-tor of Google.org, the high-tech com-pany’s philanthropic arm. Brilliant,61, whose counterculture creden-tials include serving as physician tomembers of the Grateful Dead, willwork with Google’s co-founders toestablish the mission of a giantphilanthropy, created when thecompany went public in 2004.

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Modern Physician | April 2006 • 13

Graham

Neal

Annette

NissenCrocker