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Physician conflict of interest in the news

Medical Staff Leader Connection, March 18, 2004

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Dear Medical Staff Leader:

This past week brought additional examples of hospitals, medical staffs, and courts taking action regarding physicians with potential economic conflicts of interest with the hospital. HCA is reportedly considering the issue very carefully particularly in Colorado where surgical centers now compete directly with the hospital. At least two hospitals in the western states recently revoked physicians' privileges due to the conflict created when these medical staff members opened a facility adjacent to the hospital that competed directly with the hospital. A judge in Columbus, OH, recently denied a temporary restraining order to the physician investors in the New Albany Orthopedic specialty hospital who recently lost privileges at a number of Ohio Health facilities. "The Columbus Post Dispatch" reported that the physicians subsequently dropped their suit against Ohio Health. Clearly hospitals and physicians will continue to face potential conflicts of interest that may compromise the facility's ability to provide a full range of care to the community.

As a result of these and other cases that grabbed newspaper headlines this week, I'd like to review the American Medical Association's (AMA's) position on this issue as expressed in its letter to the Office of the Inspector General (OIG) on February 6, 2003. You may remember that the OIG solicited comment from interested parties concerning "new safe harbors and special fraud alerts."  I urge you to read the AMA's letter in its entirety, but I would like to point out that the AMA stated the following:

"There are some situations where an actual conflict of interest may exist for a physician. For example, if a physician, by virtue of his or her office or position on the hospital governing board or committee, has access to the hospital's non-public financial or strategic information, then the physician may be disqualified from serving on a hospitals board if she/he has a financial interest that conflicts with that of the hospital. This may also be true in regard to a physician holding board membership on two competing hospital boards. Such conflicts, can however, be remediate without denial of clinical privileges. For example, confidentiality agreements can be required executed, and enforced."

The AMA also stated that, "Hospitals should develop conflict of interest policies and enforce them consistently for all applicants and medical staff members. The policies should be clear and focus on legitimate conflicts of interest for hospital officers, rather than termination or denial of privileges for medical staff."

The AMA is correct in recommending that hospitals develop clear conflict of interest policies. Each and every hospital should heed this advice. However, each hospital must carefully consider their unique circumstances when determining the effect of such policies. In certain instances, a financial conflict of interests may be resolved by simply barring the affected physician from certain positions on the board or medical staff. In other situations, the hospital may decide that it simply can not support its direct competitor through medical staff membership or clinical privileges. As always, the healthcare needs of the community must come first.

That's all for this week.

All the best,

Hugh Greeley

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