Doctors seek competitive market

by Cheryl Capage

There's money to be made in birthing babies and outpatient surgery, and St. John's Health System Inc. would like to keep it.      Competition for those dollars is the central issue in the lawsuit being brought against the health care system by eight local doctors.           The lawsuit      The hospital forbade the doctors of the Woman's Clinic to establish a birthing center or outpatient surgery until 2004 as a condition of letting them out of their St. John's employment contracts.      The doctors signed what they considered a strangling business covenant under protest about a year ago when they split the sheets with the hospital and ceased being employees of St. John's Physicians and Clinics Inc., which is owned by St. John's Health System.      Dr. David Redfern is one of eight physicians six from the Woman's Clinic where he's employed who have asked the federal court here to nullify those same contract provisions as an illegal restraint of trade.      Redfern and his group complain that they are effectively shut out of the market because they can't offer services their female patients want.      They sold their mammography suite to St. John's and wanted to repurchase it when they left, but St. John's wouldn't sell. The business covenant prevents them from developing a new mammography suite, the lawsuit states.      Mike Peters, spokesman for the health system, says that isn't so.      All the doctors are prohibited from doing is offering outpatient surgery and a birthing center. Those two particular areas are money-makers for the hospital and help to offset areas that don't make money, Peters said. That's why it was important for the health system to prevent the doctors from competing in those two areas.      But Redfern said that doesn't help patients at all.      "Experience in other communities, both in Missouri and nationwide, demonstrates that when competition occurs in the health care arena, patients often benefit as well as employers, who may have lower health care costs," he said.      The doctors believe that this restriction has "stunted the development of (competitive) facilities and has resulted in higher health care costs in Springfield," according to the complaint.      To adequately compete in the Springfield area market, doctors have to be St. John's employees, the lawsuit states.      Further, the doctors said the hurdles to leaving employment are so onerous that many doctors who want to leave, won't.      One of the complaints the doctors stated in their lawsuit is that the employment agreements forbid a doctor who leaves St. John's from practicing medicine for two years within a 25-mile air radius of the hospital's main campus at 1235 E. Cherokee.      The Woman's Clinic doctors were able to negotiate away that provision, but the suit states that provision is typical of the other employment contracts St. Johns' doctors have.           Conditions on doctors      Besides contract conditions, the suit states, the health system's board of directors passed a resolution Aug. 23, 2000, which placed these conditions on doctors who wished to leave:      Doctors had only 90 days from Oct. 1, 2000, to give notice and make other employment arrangements;      Employment terminated quickly after a doctor gave notice either on Dec. 31, 2000, or 90 days from receipt of the notice of termination, whichever was earlier;      The doctor had to vacate his office quickly by Dec. 31, 2000, unless he were given more time at a new, "market value" rental rate;      Access to information services ended on the doctor's last day at work but no later than Dec. 31, 2000;      A doctor who left had no right to stay in the St. John's provider network.      If allowed to stay, he had to sign an agreement that could be canceled on 90 days' notice by St. John's. The agreement also reduced compensation for services to health plan members to 10 percent less than the compensation to doctors who stayed as employees.      The health system would decide case by case if the doctor would get patients' records and the doctor had to pay for copies;      Doctors in a departing medical group couldn't keep their group's business name or telephone number unless the health system allowed it;      The health system not the departing doctor determined when and how to notify patients of the change, and the doctors would get a list of only those patients they had treated in the previous 12 months;      On their last day of work, the doctors had to pay in full for medical equipment and furniture they purchased under a transition agreement.      Even so, hundreds of doctors have left the area, Redfern said.      And last week, after years of silence on the issue, the Greene County Medical Society's executive council entered the fray.      It sent a letter July 12 to its 400 members supporting the stance of the doctors and de-ploring the "horrible drain" of doctors from the area. The executive council said more than 90 doctors have left the area in the past three years.      Peters said that in the last year, St. John's had only 7 percent turnover from doctors leaving the area or retiring.           Leaving St. John's      Citing choking bureaucracy and the loss of control of their offices under the hospital's thumb, the Woman's Clinic doctors bolted from St. John's in February 2000. They said the management bureaucracy didn't allow them to quickly respond to the changing needs of their patients.      Some of the other doctors who have left or are leaving the hospital did so because they felt the hospital didn't manage their offices well.      Redfern said, "We just didn't have a firm control of the day-to-day operations of our group. Before (selling to St. John's), it was a matter of getting seven people together and saying, Here, this is what I need.'"      Dr. Robert W. Scott, an internist here since 1979, is leaving in August to join an in-dependent practice, Springer Clinic, in Tulsa, Okla.      "The major reason I'm leaving is I think and I told my patients this St. John's does a good job of running the hospital, but I disagree with how they run the physicians' offices. I feel like if I have all the financial risk and responsibility of my clinic, then I want to be the owner and run my own clinic."      Scott said that while he didn't feel he was forced to sell his practice when Bill Clinton be-came president, the health care question was up for grabs. No one knew what would happen, and "it seemed to be the thing that making these alliances and joining would be a good thing to do."      But none of the things that were feared came to pass, he added.      Redfern came to Springfield on the basis of a handshake from Dr. Leo Wyrsch, who told him, "If you're honest and work hard and take good care of folks, you won't have a problem." He was right, for about five years, Redfern said, until the Woman's Clinic was sold to St. John's.           Access to patients      And now, as the final straw, the doctors say that St. John's plans to terminate them from its managed care provider network, Premier Health Plans.      St. John's denies that it plans to oust the Woman's Clinic doctors from their status as non-network providers for the hospital, Peters said. "There are no plans to sever the relationship."      He said that the contracts for non-network providers, like the doctors of the Woman's Clinic, operate on a year-to-year basis, so if contracted services are still needed, the contracts are renewed.      He added, however, that St. John's has three new obstetrical and gynecological doctors on staff and a new chairman of the department will be joining the hospital in August. Peters said that the hospital plans to have about 40 new doctors on staff by the end of the year.      In their lawsuit, the doctors of the Woman's Clinic claim to see the writing on the wall. If their contracts aren't renewed and it is up to the hospital they fear they'll lose access to their patients.      That's because they can't contract directly with the managed care organizations that deal with St. John's, or for that matter, Cox Health Systems.      The doctors' concerns are based on the allegation that the managed care provider network, Premier Health Plans, is prohibited under its exclusive contract with the hospital from making separate contracts with the doctors who filed the lawsuit, or for that matter, any other health care provider. Cox has similar provisions with its managed care organization, the suit states.      The medical society's executive council specifically decried the practice of employers being "forced to write exclusive contracts which limit their employees' right to use the doctor and hospital of their preference," which is one of the bases of the lawsuit filed May 24.      Only two physician provider networks exist in this area St. John's and Cox Health Systems, the suit states. About 200,000 to 250,000 patients belong to the St. John's plan, according to Peters.      Not many patients are self-pay, so the potential loss of health plan patients at Redfern's clinic would have a huge impact, Redfern said.      If another managed care provider could be brought in, there would be no problem, but there aren't enough independent doctors for a third provider, Redfern said.      Cox hasn't been named a party in the lawsuit, Redfern said, but the progress of the suit is being watched by other local physicians, including some associated with Cox.      An attorney in the office of Missouri Attorney General Jay Nixon is reviewing the lawsuit pleadings.      Nixon intervened in the mid-'90s to slow down St. John's purchases of physician practices, the lawsuit said, because Nixon feared what the hospital was doing was in violation of anti-trust and anti-monopoly laws.      Nixon was willing to forego seeking judicial relief if St. John's would limit for a period of time the number of physician practices it would acquire, which the hospital agreed to do.      That limitation agreement expired in 1997.      For now, the lawsuit filed May 24 is moving along, with depositions being set.      A scheduling conference is set in front of U.S. Magistrate James England in September, according to St. Louis attorney David W. Harlan, of Senniger, Powers, Leavitt and Rodel, who filed the suit.