New conflicts of interest create new challenges

Dear colleague,

Roles in hospitals today are getting pretty confusing. I was recently working with a hospital in which the following situation created some unwanted challenges.

The hospital tried for several years to recruit a new orthopedist to town. After being turned down by multiple potential recruits, one orthopedist finally accepted the hospital’s offer. But when her application came before the credentials committee, a private practice orthopedist on the committee (who is the only orthopedist currently on the medical staff) identified several concerns, including multiple practice relocations over her career and a few more malpractice cases than expected. The committee determined these concerns should be addressed before making a final decision, and directed the surgery department chair to inquire further about these issues. When asked by the chair of surgery about these concerns, the applicant became very defensive and threatened to withdraw her application. The applicant complained to the hospital CEO, who in turn, told the chief medical officer (CMO) to get the orthopedist credentialed as soon as possible so they wouldn’t lose this candidate it had taken so long to recruit.

The CMO spoke directly to the chair of the credentials committee, who happened to be a hospital-employed hospitalist. The CMO inquired why his committee was giving a harder time to this applicant than others. When the chair raised the concerns identified by the orthopedist on the committee, the CMO hinted that these concerns might have been motivated more out of fear of competition than a concern for the quality of patient care. The CMO assured the credentials chair that all the candidate’s references checked out fine. He also pointed out how hard it was to get candidates interested in the position. He ended by reminding the hospitalist that his group’s contract was currently being re-negotiated, and that his group was asking for a significant raise in compensation. The CMO hinted that if they could not get this orthopedist candidate to come, the hospital would have a hard time making its budget, which in turn would create an adverse impact on the hospital’s ability to adjust the hospitalists’ compensation upward.

This scenario reflects multiple conflicts of interest at play. Some are straight forward, such as the private practice orthopedist having a conflict of interest regarding a new orthopedist coming to town who would be a direct competitor. The medical staff’s conflict of interest policy should require the orthopedist to disclose to the credentials committee his conflict and let the credentials committee determine the extent to which the orthopedist can participate in the committee’s deliberations about the applicant. This might not “solve” the problem because a reasonable determination by the committee would be to allow the orthopedist to render an opinion on the applicant, and then recuse himself from further committee deliberations and voting. The orthopedist would still have highlighted his concerns, and the committee may have felt they were substantive enough to warrant gathering further information before making a decision. But the committee would know to take these concerns with a grain of salt because they came from a competitor.

The conflicts of interest of the CEO and CMO are more challenging. They have a legitimate concern about how difficult it has been to recruit a new orthopedist to town, including the potential resistance from the orthopedist already in town. The issues identified by the credentials committee are by themselves not enough to warrant denying the applicant. If the recruiters had done a good job checking out the applicant’s references (all too commonly a big “if”), management may be appropriately concerned about a competitor obstructing recruitment of a much needed specialist. These issues should all be openly on the table for discussion by the credentials committee.

The conflicts of interest of the credentials committee chair pose the greatest concern. A frequent question of private practicing physicians is whether a hospital-employed physician will stand up to pressure, subtle or unsubtle, from hospital administration regarding a medical staff issue. In this case, the CMO has in no way threatened the hospitalist’s job. But he has linked in the hospitalist’s mind the potential success of his group’s own contract negotiations with the credentialing decision before his committee. The CMO may have been speaking the truth, since the volume of the new orthopedist may have been baked into the budget of the hospital for that and future fiscal years. One orthopedist certainly can be expected to bring in significant new revenue to the hospital, enhancing its bottom line. But linking these two issues together is a violation of not only the conflict of interest policy, but the very integrity with which the medical staff is expected to function. The hospitalist should have declared to the committee his own conflict of interest and been completely recused from the deliberation and decision-making on this applicant.

As hospitals and physicians become even more economically and clinically integrated, such potential conflicts of interest are likely to be on the rise. So should your medical staff’s sensitivity to such issues and the appropriate use of your conflict of interest policy.

All the best,

Rick Sheff, MD

Principal and Chief Medical Officer

The Greeley Company