Doctors: Tenet Healthcare may end some local medical service contracts

Sierra Vista Regional Medical Center in San Luis Obispo.
Sierra Vista Regional Medical Center in San Luis Obispo. jjohnston@thetribunenews.com

Physicians at Sierra Vista Regional Medical Center have been notified that Tenet Healthcare Corp., the hospital’s owner, may contract with a national company to provide some medical services.

The plan would affect Sierra Vista in San Luis Obispo, Twin Cities Community Hospital in Templeton and an unknown number of other Tenet-owned hospitals in California.

According to several sources, Tenet is considering ending contracts with local medical groups providing anesthesiology, emergency department and hospitalist care. Tenet would contract with a single national company to provide those services at a lower rate to some or all Tenet hospitals in California, several physicians told The Tribune. 

Tenet, a for-profit company based in Dallas, owns 77 hospitals nationwide including 11 in California, according to its website.

Officials at both Sierra Vista and Twin Cities declined to comment on the plan in specifics.

Sierra Vista spokesman Ron Yukelson said the hospital, like all hospitals, is reviewing costs. 

A spokeswoman at Twin Cities referred all questions to Sierra Vista officials last week.

Tenet corporate spokeswoman Ellen Beth Levitt said Friday she didn’t know anything about the matter. 

But the executive committee of the Sierra Vista medical staff was informed of the plan Tuesday, chief of staff Dr. William Sogaard confirmed. 

In response, the committee, which represents the 400 physicians who use the hospital, held an emergency meeting and took a position opposing the plan, he said.

“It’s certainly an unprecedented occurrence in my personal experience and probably with everyone else on staff,” Sogaard said Friday. “Our stance is we are opposed to it, but beyond that I would like to talk to our attorney before making any further comment.”

Sogaard is a partner in San Luis Hospitalists, an 11-physician medical group with contracts to provide in-hospital physician services to Sierra Vista, as well as to Dignity Health-owned French Hospital Medical Center in San Luis Obispo and Arroyo Grande Community Hospital.

Dr. Christian Voge also is a partner in the hospitalist group, which is physician-owned. He was told that Sierra Vista CEO Joseph DeSchryver informed the medical executive committee of the plan Tuesday.

“We have not received anything official in writing or a date when this would start,” said Voge, who is not on the executive committee, “but I think it’s being presented by the administration as a done deal. It was announced as a sort of fait accompli. I can say that among the medical staff, I don’t know anyone who is not on board with opposing this.”

“It is my understanding,” Voge said, “that this is an initiative Tenet is taking at multiple hospitals in California — I think I heard 10 or 11 — lumping the three contracts together and giving them to a single management company to administer. That would save the hospitals money.”

If San Luis Hospitalists loses its contract with Sierra Vista, “We’d have to lay off people, and we’d have to look for other opportunities,” Voge said.

Voge said that typically, the national chains use their own physicians to fulfill the contracts and don’t subcontract to local medical practices.

“Anyone who wanted to work with them would have to resign their partnership and be employees with this management group,” he said. “We would basically have to apply for a job if we wanted to.”

Voge said that idea would be distasteful to his group.

“Our group is a local group,” he said. “We’ve been at both hospitals (French and Sierra Vista) for a number of years. Most of us have seen and a couple of our doctors have previously worked for these national chains and don’t want to do that again. We prefer local control and being able to make decisions.”

Voge voiced concerns both about the quality of physicians who are hired by a national chain and the disruption it would cause to patient care locally.

He said local physicians have a history of working together, creating a smoothly operating team that can be particularly important in emergency and surgical situations, for instance.

“It provides a work environment where everyone is comfortable and knows everyone’s level of competence,” he said.

At Coastal Anesthesiology Medical Associates, practice manager Carlyn Christianson said the 22-physician group also was notified of the Tenet plan. The medical group has a contract with Sierra Vista as well as French Hospital, Arroyo Grande hospital and three surgical centers.

“We found out about this Tuesday from Sierra Vista,” she said. “Their CEO told us directly.”

Christianson said the plan came from Tenet’s corporate office and not the local hospitals.

She also said her understanding was that Tenet had issued a request for proposals from national chains to provide anesthesia, emergency department and hospitalist services into a single contract with multiple California hospitals. 

She said she would expect to have three to six months’ notice of a change in the contract.

Christianson said her medical group had been approached in the past by national companies to become employees. They declined.

“We’re really community-based physicians, and that’s one of the reasons we formed this group,” she said. “We like living and working on the Central Coast.”

Yukelson, the Sierra Vista spokesman, said he could not comment on any Tenet corporation actions but was not aware of any current changes. 

He also said he would not comment directly on what Sierra Vista may or may not be considering but that the hospital, like all hospitals, is reviewing ways to cut costs and “physician alignment.”

“Any health care organization that says they’re not looking at alignment is being disingenuous,” he said. “It’s a different world today.”

In a related email, Yukelson noted, “In particular with the Affordable Care Act it is incumbent for every health care provider (hospitals, physicians, managed care, etc.) to seek ways to more closely align our clinical partners and drive unnecessary costs out of the system.”

Under health care reform, hospitals face a carrot-and-stick approach to improving care and controlling Medicare and Medicaid costs. The carrot can be rewards for lowering hospital readmissions, instituting electronic medical records and streamlining physician and hospital operations. The stick comes in lower per-service reimbursement rates.

Yukelson said Sierra Vista has had a long and positive relationship with local medical groups. While not confirming that any change is in the works, he said that if one were to occur, he hopes all doctors now providing services “remain in the community and we continue to work together.”

Voge said three for-profit national medical management companies could be under consideration: ApolloMed, based in Glendale;  Knoxville, Tenn.-based TeamHealth; and EmCare in Dallas. Those firms could not be reached immediately for comment.