Unfortunately, there has been a decline in the importance of this core value.
I hear stories from board members, CEOs, managers and physicians all across America. They give examples, they tell me their stories. They share their concern, disappointment, even a measure of sadness that we seem, at least in some quarters, to have lost our way.
Here are some examples of the stories I have heard:
It was a snowy, blustery Saturday morning when Thomas trudged into work. This was the last place he wanted to be on his day off after a particularly challenging week, and this was the last issue in the world he wanted to deal with.
On the job less than eight months, the routine was set — one surprise after another. On Friday his Chief Financial Officer, who had been with the organization for less than six months, discovered perhaps the biggest surprise of all: a file of information concerning a potentially devastating issue. Eighteen months before, the hospital had self reported several Stark law violations involving physician recruiting and physician compensation. Although the government had not yet responded, even 24 months later, Thomas immediately recognized this was an issue that could wreck the turnaround and place the hospital on a course from which it might not be able to recover.
The interim CEO who was involved in Thomas’ recruitment knew about it. Some board members of this community owned not-for-profit were aware they had self reported a serious problem. Even the recruiter the board hired to identify candidates knew about this potential catastrophe. But no one told Thomas.
Another instance of being blindsided by non communication of material information.
In a dusty Arizona town, a CEO was preparing to begin his first day with his new hospital, an aggressive for-profit corporation known for its laser, if not brutal, focus on growth in revenue and earnings. Bill had been hired to turn around the hospital. A competing for-profit hospital management company had built a new joint venture hospital and recruited several of Bill’s star doctors, his biggest admitters, and he had been engaged to rebuild the medical staff and return the facility to its customary space as the market leader.
Bill’s decision to accept the offer had been a tough one. His wife did not want to move to a small isolated city in Arizona. Bill was very concerned that he might not be given enough time to complete the turnaround. After an offer that included a 35 percent increase in base pay and a solemn promise from his regional vice president that he would give Bill two years to complete the rebuilding job — they agreed to a flat EBITDA but he must maintain profitability — he still had reservations. Securing the commitment to the flat EBITDA was critical to making the decision and Bill asked for the assurances in writing, which he got.
His wife was still reluctant. She did not trust Bill’s prospective new boss. Moreover, she did not want to leave a home she loved and close friends who were the best support group she had ever known. The kids were happy in school and they, too, were none too thrilled to leave behind their friends. The move was made and Bill was prepared to start this important new chapter in his career.
In his first meeting with the CFO he learned that he arrived just in time for the annual business plan/budget development cycle. When he began reviewing the financial expectations from the Regional CFO, his heart sank. They expected a double digit growth in earnings, something Bill knew was impossible until new physicians arrived.
“I know you are upset,” this regional boss said when, incredulous and angry, Bill called, “but the Division President changed his mind. He said you would have to live with it.” When Bill reminded the regional VP that he had his assurances in writing, his new boss replied, “So? That doesn’t mean anything.”
A young interventional cardiologist succumbed to an unbelievable offer from the competing hospital across town. They offered her the kind of financial security she thought might take 10 years to earn. Now, in her fourth year of practice, she felt she had “arrived.” Clearly the competitors were buying market share and Michelle, a star resident and cardiology fellow from a respected Ivy League program, decided to accept the offer.
Michelle was assured, after some intense questioning on her behalf, that her new hospital was committed to quality, service, satisfaction and doing the right thing for the patient, but three months into her tenure there, she began to feel the pressure to produce more revenue — more cath lab cases, more stents.
The pressure only intensified as the months passed.
“We have to get our money back on our investment,” Michelle was told when she spoke to the service line executive who had recruited her. “How do you think this works? If you don’t produce we will have to make changes that won’t be good for you.” This was no veiled threat.
Michelle felt trapped. She could not go back to her former hospital and if this new opportunity did not work out, she would incur a significant financial setback. What was worse, she hated going to work because of the phone calls regarding his volumes.
So Michelle began to fudge here and there, scheduling patients for cauterizations and stents that she could justify in case anyone called her hand. She did not like doing this — she knew this was unnecessary care with a big unnecessary expense — but a few added procedures here and there helped ease the pressure for her employer — for a while. Besides, she concluded, it seemed the other cardiologists were doing the same thing.
All the assurances Michelle received about quality of medicine and doing the right thing for the patients appeared to go out the window once the ink was dry on her contract which had some onerous provisions including a referral-wide non-compete provision.
Michelle began making inquiries about opportunities elsewhere but her husband, an attorney, was none too pleased. He liked their home and the town. His practice was beginning to grow. He was not interested in moving. Surely things weren’t as bad as his wife suggested.
So Michelle continued. The more she was pressured, the greater the number of questionable patients she took to the cath lab for procedural work. No one said anything to her about her utilization numbers. Everyone seemed to be turning their head, or as my dad used to say, “a blind eye.”
She was making great money, saving more than she thought possible for a growing family with expensive tastes. But the more money she made, Michelle confided to me, the more unhappy she became.
These are but three examples based on numerous conversations I have had on this subject over the past several years. The issues illustrated in these stories sadly have become rampant, CMOs, governance consultants and hospital and medical practice CEOs say.
In all three of the stories, when the victims of these integrity lapses questioned their new employers about the bad behavior, the responses they received were all a little different in tone, but there was a shared underlying theme: if we told you the truth, you might not have accepted the offer.
This is a serious issue.