John D. Lantos M.D. Children’s Mercy Bioethics Center Kansas City, MO

1. Where the Rubber Meets the Road:Ethical Dilemmas for Middle Managers in Academic Medical Centers John D. Lantos M.D. Children’s Mercy Bioethics Center Kansas City, MO Seventh Annual Pediatric Bioethics Conference July 22-23, 2011 Treuman Katz Center for Pediatric Bioethics

2. Section Chief, General Pediatrics • Took over in 1999 • Goals: • New models of inpatient and outpatient care • New paradigms for education in an era of work-hour restrictions. • Social determinants of child health. • Build multiple primary care sites. • Create a Center for Pediatric Advocacy.

3. Business Plans “Cost and revenue estimates are central to any business plan but costs are often underestimated and revenues overestimated resulting in later cost overruns, revenue shortfalls, and possibly non-viability.” • Wikipedia, “Business plans”

4. Our Business Plan • Assume revenue growth of 5%/year • Each person would have to become more productive. • Productivity gains would come from more “efficiency” – more dollars/doctor/day

5. We Imagined Only Good Things • Increase in the number of babies born • Stable malpractice insurance rates • Steadily rising stock market • No terrorist attacks on Wall Street • Steady state and federal taxes

6. And Projected Shrinking Deficits • Year 1 -- ($724,996) • Year 2 -- ($409,418) • Year 3 -- ($274,351) • Year 4 -- ($139,748) • Year 5 -- $20,862

7. One of the First Memos “There has been a recent and unprecedented decrease in reimbursement for medical services. Other hospitals are cutting salaries, laying off faculty. I know everyone is working hard. Our billings are increased. Unfortunately, our cash for professional services continues to decrease. The total Departmental deficit for this fiscal year is projected to be $4.5 million.”

8. Relative Value Units (RVUs) • Each medical service gets a relative value score based on the five domains: 1) the time that it took to provide particular services and procedures (S/P), 2) pre-S/P and post-S/P times, 3) the intensity of the S/Ps, 4) practice costs, including malpractice premiums 5) the cost of specialty training. - Hsiao WC et al, The Resource-Based Relative Value Scale. JAMA. 1987

9. Solution • A productivity-based incentive plan. • Based on RVUs. • 20% of salary “at risk.”

10. Some Quirkiness • Shaving 2 cm of facial hair in <1min (11313) earns 3 times as much as 15mins evaluating a complex problem. (99213). • Reading a chest film in <2min (71020) earns the same as compiling 12 glucose levels over 3 days and adjusting insulin. • Beckett PR, Kirkland JL. RVUs. Pediatrics, 1999

11. My Job • Not to critique the system but to “game” it. • Increased RVUs = increase pay. • How can we (legally) increase RVUs?

12. Key Discovery: Earwax! • Cleaning earwax generated nearly as many RVUs (0.61) as seeing a sick patient of intermediate complexity (0.67). • Even better would have been the removal of a nasal foreign body (1.04). • If we cleaned the ears of 10% of our patients, we could get 20% pay raises.

13. How to Think About This • Deception? • Fraud? • Cleverness? • Excellence? • Absurdity?

14. a) health care for all children; b) no out of pocket payments by parents; c) financed on a fee-for-service basis; d) with cost-control. Market discipline without true markets. What we Want

15. Fines for Fraudulent Billing Penn $30M Univ. of Texas at San Antonio $17.2M Univ. of Pittsburgh $17M, Jefferson $12M, University of Virginia $8.6M.[i] Fishman LE. What types of hospitals form the safety net? Health Aff 1997

16. Professionalism “It is not because we have special knowledge that doctors can be trusted – instead, we are trusted only if this knowledge and technology is firmly attached to values that are explicit, understood, and (when push comes to shove) altruistic.” Innui T. A Flag in the Wind. AAMC 2001