Local and state medical associations say the exodus of doctors from California has reached epidemic proportions
Photo-Illustration by Kathy De La Torre
Code Blue
Doctors are scrambling to resuscitate the patient. The patient is the medical profession.
By Sandy Sims
Photographs by Kathy De La Torre
When Rona Layton's obstetrician left Silicon Valley, she was disappointed but took his leaving in stride. Then her eye doctor left town; her children's pediatrician retired, and when she called to make an appointment with her primary care physician, she was told he was no longer with the medical group. The entire cadre of doctors Layton's family had been with for many years up and left within a two-year period. When Layton began the search for new doctors, what she heard over and over was: I'm sorry; the doctor's not taking new patients. "I began to think I was jinxed," Layton says.
Layton isn't jinxed. What she's been experiencing is the repercussions of overwhelmed medical practice and a growing shortage of doctors in Silicon Valley. And the shortage is not the result of all the people moving in. The shortage is happening because the doctors are getting out.
California doctors are heading for small towns in such states as Texas, Alabama and North Carolina where doctors say they have considerably more control over their medical decisions, get paid a fair fee for their services and can afford to live comfortably. Of those doctors not clearing out of the area, a good number are retiring early or changing professions. Of those still practicing here, some are dropping out of the HMO system altogether, and growing numbers are joining the union, something unheard of not so long ago.
Those who've been paying attention to the movement of doctors away from the state and the profession are alarmed.
"We don't have the statistics yet," says Karen Niko, California Medical Association spokeswoman. (The California Medical Board registers newly licensed physicians but doesn't keep track of them.) "But we have plenty of anecdotal evidence that doctors are leaving the state and the profession," Niko says. Los Angeles resident Niko lost two primary care physicians of her own, one to Ohio and one to Tennessee. She says the current president of CMA, anesthesiologist Marie Kuffner, teaches at University of California at Los Angeles and finds an alarming number of students plan to leave the state after graduation.
In an October state-of-medicine-in-California speech, Kuffner reports some of the reasons for the exodus of California doctors: Physicians are being left with millions of dollars in unpaid claims; large numbers of medical groups are going bankrupt; the average California physician earns 15 percent below the national average. In fact, data collected during 1994-1997 showed California physicians' incomes had fallen by at least 12 percent, while physician incomes in the rest of the country rose, and she says Californian physicians' incomes have dropped even more since then. An article in Modern Healthcare reports California physicians are 47th in physician reimbursement in the country. The ratio of doctors to patients is 214 doctors per 100,000, and doctors are typically seeing 30 to 35 patients a day.
Santa Clara County doctors are particularly hard hit. "It's getting harder and harder to bring new doctors here," Bill Parrish, executive director and CEO of the Santa Clara County Medical Association, says. Good Samaritan Hospital has been trying to recruit a neurosurgeon into the area for four years with no luck. Silicon Valley is the highest priced place to live, he says, and doctors in Santa Clara County receive the lowest reimbursement for services than anywhere else in the country. "It's scary," Parrish says, "because the population is growing."
Neurosurgeon Donald Prolo says, "The omnipotent insurance carriers are strangulating medical care." He says reimbursement is so low that doctors are having to decide whether to pay their taxes or their student loans. Established doctors, he says, are living off money they made in better times. He says hospitals are in trouble, too, explaining that 28 emergency rooms have closed around the state because of inadequate funding for emergency physicians. "All the hospitals are like that," Bill Parrish says. Parrish says it's the whole health-care system that's in trouble. Good Samaritan has 80 nurses positions open now. "The more the public understands what's going on, the more it will realize it's at risk."
In response to what is becoming a medical emergency, SCCMA has sent out a survey to doctors asking them what their plans are for the next three years. Though the data hasn't been compiled yet, Parrish says, doctors are responding in large numbers, more than any other survey SCCMA has done before. The purpose of the survey he says is to find out what the future of Santa Clara County's health-care will look like in the next one to five years.
Parrish says SCCMA is organizing a meeting with business leaders, government officials and health care organizations to deal with what the medical association is calling a crisis.
Dr. Richard Sieve, an obstetrician/gynecologist, who has had a solo practice near Westgate for some 30 years, says "doctors are leaving because they can't stand it anymore." Sieve, who says he's not going anywhere, has patients that have been with him the whole time he's been in practice. "There have been lots of changes over the years," he says. "But things are very tough right now." He says if it weren't for the evening and weekend hours he puts in delivering babies and responding to emergencies, he would not be able to keep his office running. In other words, it's the overtime he puts in that keeps him afloat.
Sieve says the biggest hassle is the HMO system. "Insurance companies find ways to stall payment, or not pay at all," he says. "They tell us the claims we sent them never arrived." Another thing he says insurance companies do is down-code claims, which means they send the claim back with a lower code resulting in a lower fee for the doctor. "I know of no other business like that," he says. "I've got a claim for delivering a baby two years ago that still hasn't been paid."
Photograph by Kathy De La Torre
Mona Harris, sorts through billing records in the office of Dr. Richard Sieve. He has also had to hire one person 30 hours a week just to follow up with insurance companies on unpaid claims.
The system is complex, too, he says, because each patient's insurance plan may be different.
Sieve says sometimes a patient needs a procedure, and he knows the insurance won't pay enough to cover his cost. "I can't base my treatment on what the insurance pays. I know I will pay out of pocket, but I have to do what is right." Recently, he performed surgery on a patient for which the insurance paid $212 for the entire pre-op exam/surgery/post-op exam time of about three hours. "I figure my overhead is at least $150 an hour," he says.
In addition to a full-time billing person, Sieve says he's had to hire one person for 30 hours a week whose sole job is to collect on unpaid claims from insurance companies. His office manager, Dotty Rivers, is the one who has the job of getting authorization for treatment. Rivers says she often spends hours at a time on the phone trying to get permission for emergency treatment. "It's not unusual to be put on hold and be cut off several times, while trying to get authorization for a patient who is bleeding and needs to go to the hospital," Rivers says.
Obstetrician Curtis Montgomery, in a telephone interview from Huntsville, Texas, says he pulled up stakes last year after practicing 16 years in San Jose, because it was becoming more and more difficult to get paid. "It's untenable," Montgomery says. "The patients feel they are paying for expensive insurance and deductibles, and why should they have to pay additional for medical care?" He says IPAs (Independent Physicians Associations) are undercutting the HMO contracts so much that the IPAs can't make it, so they are skating along, taking longer and longer to pay, and sometimes not paying at all. That was the final straw for Montgomery. "I just couldn't get paid," he says. Huntsville is a small town with no HMOs. "HMOs thrive in big cities," he says.
"When HMOs first came out, we all thought this was medical nirvana, the answer to the out-of-control medical costs," Montgomery says. Everyone was part of the decision. Doctors accepted lower rates.
"But then," Montgomery says, "it became we'll send you more patients, and we will discount your pay." At first, he says, it wasn't bad, but the discounts got greater and greater. And getting authorization to treat his patients got tougher and tougher.
Many doctors say it's when the HMOs became for-profit organizations, that the focus shifted from taking care of patients to taking care of profits for the stockholder. Dr. J. C. Pickett, an orthopedist and the immediate past president of the CMA, says medical care is being run by Wall Street now instead of Main Street.
Photograph by Kathy De La Torre
Sole Practitioner: Dr. Richard Sieve
Eventually, government and HMOs began setting fees, completely leaving doctors out of the loop.
Montgomery says large businesses negotiated for lower employee insurance premiums and drove reimbursement rates down even more. Doctors, banding together in medical groups to survive the cost of running their practices, wound up competing with each other and drove the rates down even more.
Montgomery, who knows of 11 ob-gyn specialists who have recently left Santa Clara County, says he tried not to let this affect the quality of his medical care. But when he would call for a pre-authorization, he would have to "rant and rave," and the HMO still wouldn't give authorization to him. "And these weren't doctors I'd be talking to;" he says. "They'd be some kid out of high school." He recalls an orthopedic surgeon who wanted to get an MRI for a patient with chronic knee pain. The HMO said no and recommended anti-inflammatories.
"God forbid you see a patient without a referral," Montgomery says.
If the treatment could be done in his office, he often went ahead and performed the procedure without pay. But the out-of-office procedures didn't get done.
"It's hard to practice medicine in that system," Montgomery says, "because all you do is take care of the minutia."
"People don't realize what this is all about," San Jose cardiac surgeon Gary Silver says. "They are being jerked around by insurance companies who are screwing doctors' reimbursement down tighter and tighter while doctors' costs are going up. Somewhere," Silver says, "the curve will cross."
Photograph by Kathy De La Torre
On salary: Dr. Nina Jaki
It seems the curve has already crossed. Under the current system of reimbursement, doctors are losing money if they practice in California.
For example, in August of last year, the CMA released a study that shows pediatricians receive a capitation rate of about $24.24 per child, while the average cost--including mandatory immunizations--are about $47 per month.
Capitation rate is the per-patient amount a health maintenance organization pays a primary care physician monthly to treat the HMO's members. The rate is paid whether the doctor sees the patient or not.
The study shows the overall capitation payments have dropped 35 percent, from $45 down to $29 per patient. Santa Clara County's rates go even lower because of a complex system of competition between business groups for the lowest insurance premiums and between medical groups for the insurance dollar.
It isn't just the money, though.
Silver, who at 59 years old, is a highly esteemed heart surgeon with a 27-year practice, says doctors of his vintage are leaving. He retired last year.
"The practice of medicine is no fun now," Silver, says. He knew he wouldn't stay in medicine till late in life. But he thinks the struggle to practice medicine today helped his decision along a little sooner. "It's the hassles with insurance companies, people telling you who, when and what you can do," Silver says.
He remembers what it used to be like. Twenty years ago, if Silver needed to perform surgery on a patient, he simply called the hospital and told them when to admit his patient. Then he called the doctors he wanted to work with. "The whole thing took 10 minutes," Silver says. "We also got fee-for-service."
Fee-for-service means the patient pays the doctor directly and then sends the bill to the insurance company for reimbursement.
"There's no good guys and bad guys in this," San Jose obstetrician Margaret Mahoney, insists. Mahoney says, "We all agreed that HMOs were a good idea. But we've tried that idea, and it's not working."
Photograph by Kathy De La Torre
Chronicled a year in her life: Dr. Margaret Mahoney
Now no one is happy, Mahoney says. She adds, "Doctors no longer like practicing medicine; nurses are leaving the hospitals, and patients are no longer at the center of medical care. Even the HMOs are running into financial trouble, she says. "No one ever expected us to get to this place."
Mahoney went through a soul searching after hearing herself say to her patients too many times, "It's out of my hands." The result is her book Saving the Soul of Medicine, which chronicles her and her patients' experiences and thoughts for one year as she practiced medicine under the current system. Her book brings to light HMO practices such as utilization reviews, which is the HMO system of monitoring a doctor's use of certain medical procedures. URs are set up solely for the purpose of cost containment, with the underlying threat of dropping a physician from the HMO.
She writes about having to send specimens to inferior labs HMOs have contracted with for lower fees. She writes about patients having to go to a primary care physician (PCP) for all referrals, which means patients can wait in pain for days, or longer, before getting to see a specialist. And she tells how PCPs are burdened with patient loads that often number in the thousands. Which, Mahoney says, is why finding a new primary care doctor is so difficult.
Practicing medicine under the current system became unbearable to her.
Three years ago Mahoney took what she says was a radical step at that time. She left the medical group she'd been with for years and opened a sole practice specializing in post-menopausal care. She refuses to deal with insurance companies altogether by charging fee-for-service.
"It's wonderful," Mahoney says. She takes one hour or more with her patients. She is able to practice what she calls the most fundamental elements of good medical care--continuity, careful attention to detail, and long-term follow-up. She can order tests from labs of her own choosing and refer to the specialists she has faith in. Her practice is thriving. Mahoney has been speaking in the community to educate the public and to promote public debate about where medicine should go from here.
Three years later, more and more doctors are dropping out of the HMO system.
Established doctors can do fee-for-service, says Mathew Mingrone, an ear, nose and throat specialist in Saratoga. "But if more than 50 percent of your patients are with HMOs, it will kill your practice to leave. You can't just hang up your shingle and start practicing like in the old days," he says.
Photograph by Kathy De La Torre
Director of Stroke Program: Dr. Harmeet Sachdev
Mingrone, who spent a year in Beverly Hills training in facial plastic and reconstructive surgery, grew up in the area and has returned after 15 years of medical training. If his and his wife's family weren't living here, he doubts he would have returned. An inheritance from the death of his father enabled him to buy a home and take over an established practice.
Mingrone says he is the first ENT specialist to come into the southwest valley in five years. And he knows of four or five ENT specialists in the West Valley who will retire in the next three years. He also knows one ENT who is leaving the state to practice elsewhere.
"This area is the bottom feeders, as far as insurance reimbursement," Mingrone says. "In the past, taking over a solid practice was a gold mine," Mingrone says. Patients were loyal. Now they have no physician loyalty because of changing insurance plans. Some Medicare patients continue with Mingrone, and some longtime patients who are used to paying out-of-pocket are still coming.
Mingrone says younger doctors who are hungry need more patients to come in the door. Insurance companies know new doctors will take lower reimbursements. He didn't sign up with HMOs, but he has contracted with some of the large medical groups as a specialist.
Fresh out of residency at Santa Clara County Medical Center, Nina Jaki found a way to practice in the area. Jaki, a Willow Glen resident, also grew up here and wants to stay. After finishing a four-year residency in obstetrics and gynecology, she accepted a salaried position four months ago with a highly thought of medical group in Los Gatos. Jaki says she was actually offered $30,000 more to work in Auburn and $40,000 more for a position at Clear Lake. Though the cost of living is high here and she can't afford to buy a house, she likes her current arrangement.
Photograph by Kathy De La Torre
Dr. Richard Sieve works in his office in the Westgate area.
Some well-established doctors are staying around, but it isn't easy.
Neurologist Harmeet Sachdev, director of Good Samaritan Hospital's stroke program, is watching his colleagues leave. He knows six doctors under the age of 60 who have recently retired. Still, Sachdev struggles within the current medical system, in large part, because he is deeply committed to the successful stroke program he created in 1996. Sachdev spent many days and hours of his own time without reimbursement, while trying to get this treatment established. "Insurance companies don't cover new procedures," he says.
The stroke treatment includes the expensive medication dubbed TPA that must be administered within a three-hour period after a stroke. The medication gives a patient a 50 percent chance of complete recovery with no paralysis. "Good Samaritan has been very supportive of this program," Sachdev says. And HMOs are covering it now that they understand that it saves money in the long run.
However, the HMO system of requiring patients to get a referral from their primary care physician is a major problem. Sachdev says, "We tell the patient to call 911, but the HMO says the patient must go to his or her PCP for a referral before coming to us." He says he knows of three patients who became paralyzed in the waiting room of their PCPs six or so hours after their strokes occurred.
Many Californians have begun to suspect that the health-care system isn't healthy, but those who are on the front line--the doctors, the hospital administrators, the nurses, the technicians--say the situation is far beyond "not healthy." Those in the medical field in California--and especially in Silicon Valley--say it's nothing short of a crisis.
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