THANKSGIVING DAY INTERVIEW [continued from December, 2007]
INTERVIEW: Dr. David Edward Marcinko; iMBA Founder and CEO: www.MedicalBusinessAdvisors.com, a private health economics and consulting firm with no debt, no investors and no plans to go public.
TOPIC: Medical Unions, Collectivism and Related Competitive Thoughts – Part II
REPORTER: Hope Hetico; RN, MHA Consulting Professor for: www.CertifiedMedicalPlanner.com and Managing Editor of our companion print guide HealthCare Organizations [Financial Management Strategies].
LOCATION: A local restaurant in Atlanta, Georgia, serving deep fried turkey, a Southern delicacy and tradition.
TRANSCRIPTION: Ann Miler, RN
EPILOGUE: Last month, in Part I, we initiated a riveting discussion on the impact of medical unions, collectivism and related competitive thoughts on the healthcare industrial complex, with Dr. David Edward Marcinko, Founder and CEO of iMBA, Inc. The topic inquiry was suggested by a reader. We now conclude that controversial interview.
Ms. Hetico: As we press on; what about public sympathy for medical unions?
Dr. Marcinko: Almost a decade ago in 1998, Fortune magazine carried the headline “When Six Figured Incomes Aren’t Enough. Now Doctors Want a Union.” Rightly or wrongly, the public has no sympathy for affluent doctors. Public support, as seen in a UPS strike about the same time, is not in favor of organizing physicians. To the man in the street, it’s just a matter of the rich getting richer. After all – MDs were not crying under the traditional fee-for-service system; it was just when managed care adversely impacted incomes that the imbroglio began. The doctors, on the other hand, want to unionize to get MCOs to return to them the power to practice medicine as they see fit, not money.
Ms. Hetico: But, isn’t perception – often reality?
Dr. Marcinko: Indeed, perception is often the reality in many cases. Moreover, the AMA discouraged unions and past president Tom Reardon, MD opined that unions can’t do any more for physicians than their county or state medical associations can.
Ms. Hetico: OK. Medicine is different as a “leaned profession”; but what about the medical unions that did organize?
Dr. Marcinko: As of a few years ago, these unions were still in existence although not flourishing and my statistics may be a bit old:
· National Doctors Alliance [affiliated with the Salaried Employees International Union (SEIU)] an umbrella group for:
· Committee of Interns and Residents
Membership: > 11,000 Growth: 1,000 Dues: 1.375% – 1.5000% of salary
· Doctors Council
Membership: > 3,500 Growth: 1,000 Dues: $ 720 / year
· United Salaried Physicians and Dentists
Membership: 1,200 Growth: 300 Dues: .85% salary with $ 650 annual ceiling
· Federation of Physicians and Dentists
Membership: 8,500 Growth: 250 Dues: $ 672 / year
· Physicians for Responsible Negotiations (MD/DO only)
Membership: N/A Growth: N/A Dues: $ 300-$720 / year
· Union of American Physicians and Dentists
Membership: 6,000 Growth: 15-17% annually Dues: $ 465 initial fee, plus $ 400/year, plus $ 100 annual IPA surcharge.
Ms. Hetico: What were some of the psychological barriers to the formation of medical unions for doctors and medical professionals?
Dr. Marcinko: I recall William F. Shea, President of the Shea Companies, who wrote in Managed Healthcare News that there are numerous psychological barriers against the formation of physicians union.
These include (1) the public perception of medical professionals as a “cut above” ordinary workers, (2) doctor’s attempts to wrap collective bargaining within the mantle patients rights will lack credibility, and (3) the highly educated physician’s ability to re-engineer and seek alternate employment opportunities rather than accept the salary scale or lack of autonomy present in restricted HMOs.
In other words, MD resignation through individual re-deployment might be the most effective “strike,” if called by one practitioner at a time.
Ms. Hetico: So, what can be done for physicians – if anything – about their medical union education and re-education?
Dr. Marcinko: “We are living in a world where what you earn is a function of what you learn”, former President Bill Clinton was fond of saying. This statement has become one of the truisms of the information age and by extension, hopefully the medical establishment. Correspondingly, it might be added that “it’s not so much what you learned in medical school yesterday, but what you will continued to learn today and tomorrow, that really counts.”
For example, in the golden age of medicine (about 1965-1985), the wage premium enjoyed by physicians, over college graduates and other laborers (union and non-union), increased by about 35-55 percent. But a new type of medical professional, the paraprofessional [LPN, nurse practitioner, CNA, PA, nurse-midwife, healthcare technician or electronic expert (i.e., Google search engine, etc.] arrived on the healthcare scene.
Using powerful computer software, massive medical databases and sophisticated treatment algorithms, these networks possessed the potential to reduce the huge economic edge of traditional educated and professionally degreed physicians, over less educated caregivers. These decision support systems (DSS) and evidence based medicine [EBM) parameters are already dramatically decreasing the amount of formal education and mental skills needed to perform many medical tasks. Combined with other medical educational software, makers of online and interactive computer based internet testing (CBIT) material could significantly increase the pool of nonprofessionals qualified to compete for healthcare jobs (www.HealthDictionarySeries.com)
In the process, wage premiums would shrink not only for practitioners, but for tenured teaching physicians with years of accumulated experience, as well.
Ms. Hetico: Do say! What a diatribe?
Dr. Marcinko: Here is the bottom line: the days of wanting “experienced grey hair” in medicine may soon be over. Patients may chant instead, give me the young “spike-haired” technologist doctor. Of course, no decision support system can replace judgment, experience and wisdom, but they can reduce the considerable monetary premium many doctors earn by knowing medical facts and processes that – while simple – might often be difficult or time consuming for students, residents or interns to find out about and learn.
It all goes back to the 80/20 rule, again. Because we are a nation that champions the weak – with a collective ennui that favors the underdog – the healthcare systems tends to deal much better with the vital 20% few, than the trivial 80% many. We love John Wayne, Rocky Balboa, organ transplants, and other medical heroics, etc.
Ms. Hetico: But, you seem to be saying that doctors aren’t special, anymore?
Dr. Marcinko: No, docs are very special. But, “among professional people, such as accountants, attorneys and especially physicians, there is a misconception that whatever they do is so uniquely creative and important that it can’t possibly be reproduced or put into a computer, where it can be easily and cheaply accessed by mere mortals.” When, in fact, it increasingly can.
Obviously, this is bad news for doctors and medical students who spent a lot of money, time and energy to acquire medical degrees with the expectation of high salaries.
Ms. Hetico: Is there a parallel somewhere in another industry that we can learn form?
Dr. Marcinko: Of course; just look at the off-shore hiring experience and visa problem of the IT pros [information technology]. Like us, they just can’t get used to the idea that they aren’t replaceable in the workplace anymore?
Ms. Hetico: Please elaborate?
Dr. Marcinko: We doctors got used to being overpaid when Medicare began because we had the government and private payers over a knowledge-based barrel. Now, rather than face the reality that our economic glory days are behind us – it is a new era – and be satisfied with a reasonable wage base; we tend to delude ourselves into thinking that we are getting ripped off.
Ms. Hetico: So, doctors aren’t used to mere mortal status after so many years of being pampered?
Dr. Marcinko: Yes! And, as Frank Levy, PhD of the Massachusetts Institute of Technology noted, the educational premium has not only remained flat in recent years, it has actually shrunk among medical professionals. In 1995-96, for the first time in a generation, blue collared technical, not labor, employment and real wages have begun to rise without a reason to believe that the gap between labor and technical skills won’t expand indefinitely. DITTO with medicine, I think.
Ms. Hetico: In other words, wages like trees, don’t grow into the sky forever?
Dr. Marcinko: Exactly, throughout most of the 19th century, quasi (blue collared) professionals, such as engineers, teachers, carpenters, and mechanics enjoyed a pay advantage over laborers, even as the relative wages of many other traditional (white collared) professionals began to substantially decline … so
Ms. Hetico: How does the retail 2 wholesale payment shift impact unions?
Dr. Marcinko: Although the term paradigm shift was seldom used buzzword in contemporary medicine, it is a popular term in corporate America, which is entirely comfortable with the profound changes which constantly occur in its competitive climate. The term merely denotes a fundamental change in the way business was done from a previous methodology. Such core changes prompt hiring and firings, deployments and re-employments, education and re-education, on an almost daily basis. It’s just that to U.S. physicians – toppling from intellectual and economic grace is particularly hard to swallow after so many decades – and from such a seemingly arrogant and self important breed of worker.
Nevertheless, according to Harvard economist Claudia Goldin PhD – “the lesson of the past is that we have to remain sanguine about income inequality.” The current competitive crisis is not intrinsic to medicine and will surely pass, ingratiating those courageous and risk tolerant enough to change, while steam rolling over those who are too weak or risk adverse accommodate to new ideas.
Of course, just how sanguine and optimistic you should be depends on how you practiced medicine today, or how you hope to practice in 2010 and beyond. History does seem to suggest however, that it is clearly possible for the wage premiums enjoyed by today’s cognitive “physician elite” to shrink, and that labor unions to the contrary, will have no impact one way or the other, on physician economic survival in the future.
Ms. Hetico: What then is the vision of medicine, if collectivism and unionization is not in the future of the profession?
Dr. Marcinko: Many business experts believe the answer lies in consolidation into larger groups, Independent Practice Associations (IPAs) or major provider networks. Others believe in the new corporate medical business models known as 6th generation professional practice management corporations (PPMCs), despite the economic debacles on Wall Street, circa 2000 – or – perhaps even electronically connected medical and patient networks; with each serving as a collaborative compilation of all stakeholders through an open technology platform.
Ms. Hetico: Any concrete examples or just theoretical at this point?
Dr. Marcinko: One www.Sermo.com represented by founder and CEO Daniel Palestrant is for licensed physicians. The other, www.OrganizedWisdom.com represented by Co-Founder and President Unity Stoakes, is for patients. Both are getting at something that was never really made accessible before; information. Its goal is collecting, rating, codifying, ranking and making available the informal but very important experiences, wisdoms and discoveries of doctors and patients; again really interesting stuff.
Ms. Hetico: You led a small regional PPMC in the late 90’s correct?
Dr. Marcinko: Yes I did, and it was very hard, but we consolidated about a 95 single specialty practices before the implosion on Wall Street. But, our business model was based on debt, not equity. So, no one ever cashed out rich, or lost their money or livelihood, either.
Ms. Hetico: How were you e-connected way back then?
Dr. Marcinko: ISDNs; ugh!
Ms. Hetico: Wasn’t it a private union of sorts? How did it work?
Dr. Marcinko: Not really. Our PPMC was a corporate entity that provided administrative and management services to medical practices such as financial, marketing, human resources, contract negotiations, and information technology solutions. The goal was to achieve the economies of scale and profits not otherwise attainable by solo or the independent small group practice.
The concept itself involved a vertically integrated network of practices, physical therapy centers, ambulatory surgery centers, prosthetic centers, wound care centers, clinical trials and outcomes centers, nursing and medical specialists; joint ventured together as a single corporate entity to provide comprehensive patient needs. Information from each location was to be electronically shared, integrated and compiled into a repository, allowing each diagnosis and treatment service to be tracked within the entire continuum of care. The practitioner was thus freed from the management, financial, purchasing, business and administrative burdens of daily medical practice. He or she was freed to practice the art of medicine and surgery.
Ms. Hetico: That didn’t work out so well, then. What can be done today?
Dr. Marcinko: In our case, we were a little late to the Wall Street party, and a little early for the technology explosion. The roll-up model IPO attempt was aborted due to adverse market conditions, in 1999, and most folks only lost start-up organizational money.
Ms. Hetico: Did you survive the debacle?
Dr. Marcinko: My ego tanked; however I‘ve recovered. I am now a writer, speaker, financial and medical management consultant and journalist; among other things. I also like to think of myself as a health-economics thought-leader. Although, I do keep my license as a back-up.
Ms. Hetico: What is a health-economics thought-leader?
Dr. Marcinko: It’s someone who opines to the point where others are interested in listening to, or laughing at him; a visionary.
Ms. Hetico: You mean a know-it-all. Be careful, I remember you back in your clinical practice days.
Dr. Marcinko: Believe me, I am being very careful.
Ms. Hetico: So, what are physicians – and nurses – to do today? I was originally a nurse by training, and you originally a doctor. This discussion relates to me, too! We have both re-engineered and re-trained.
Dr. Marcinko: Today, if you are not a managerially astute practitioner, at least consider re-joining national medical organizations such as the ADA, AOA or AMA, which has been seriously under represented the last few years. The AMA now has about 190,000 members and represents about 22 percent of America’s doctors (the closet thing we have to a medical union).
Ms. Hetico: What a boring idea from such an innovative guy like yourself?
Dr. Marcinko: You are right; boring. On the other hand, is joining such organizations another form of “thinking inside the box?” You decide, but consider what have they done for you, lately? Even the AMA admitted that it has not be market responsive to its members for more than a decade, but finally made membership a top priority in 2002 going forward. Still, it hasn’t done very well, and most folks think it won’t with all the infighting, ageism, etc. It does seem to do a nice job of political lobbying and cozying-up to the past generation of politicians, however.
Ms. Hetico: Are you a member of the AMA?
Dr. Marcinko: No.
Ms. Hetico: Regardless of the future, in the ever-changing business model of medicine, unionization is not the structure of choice – is it?
Dr. Marcinko: No, I don’t think so. A more laissez-faire and highly competitive business model should be accepted.
Ms. Hetico: Yet, physicians have been slow to accept this philosophy. Much like a fad diet, new wonder drug or pop psychology guru, American doctors are trolling for a quick fix to the corporate crisis of managed care rather than adding innovation to their services through sweat equity.
Dr. Marcinko: Yep! More than most with a healthcare interest at stake, MDs/DOs have too often engaged in bashing others, railing about falling incomes, whining and assuming a posture of resistance in order to wear down perceived opponents. Joining a labor union is just too easy, and, like most worthwhile things in life, true value is only realized only through hard work, re-engineering and risk taking, not signing a union membership application with no strategic competitive advantage or operational synergy.
Ms. Hetico: What do you think about the new P4P initiatives; not very collective are they?
Dr. Marcinko: First off, I do like the idea of individuality. But yes, they are not very socialistic. And, my great fear is that they will become an excuse for doctors to abandon the sickest or most challenging patients; despite risk-adjustments, etc. Thus, the altruistic basis for the entire profession may be jeopardized. IOW: I fear a direct relationship between P4P and increased medical commercialization. I call it the medical merchant syndrome because that’s what some docs will become; “Merchants of Medicine.”
Ms. Hetico: So, it sounds as though you favor social medicine or national healthcare.
Dr. Marcinko: No, what I am saying is that there must be a balance between medical collectivism for caregivers and the common good – and – capitalism with rewards for the innovative and competitive risk takers who are the deserved … or lucky few.
Ms. Hetico: What is your answer to our domestic healthcare insurance conundrum and the uninsured crisis?
Dr. Marcinko: That’s way-off topic point, but we do have a healthcare safety-net in this country. The system is not always like Michael Moore portrayed in Sicko; but it’s just not always economically optimized either.
Ms. Hetico: Such an obtuse reply; just what does that mean?
Dr. Marcinko: Well, as an economist, just let me say that healthcare is not always delivered to the right patient, for the correct reason, at the most appropriate venue, by the right provider, or in the most efficacious route or cost effective manner. Nevertheless, the demographics are against us making our task Sisyphus-like unless there is a paradigm-shift in medicine; rather than incremental adjustments.
Ms. Hetico: So, just like the gods who had condemned Sisyphus to ceaselessly rolling a rock to the top of a mountain, where it would fall back again repeatedly of its own weight – we are doomed in healthcare?
Dr. Marcinko: Not at all – prologue is not epilogue – but the analogy seems a good temporary one.
Ms. Hetico: Who is your favorite philosopher?
Dr. Marcinko: Well, I am partial to several related healthcare ideas of Ann Rynd who postulated the existence of managed care and restrictive HMO-like entities more than half-century ago. Not only were many of her thoughts about it negative, some have come to fruition in one-way or another.
Ms. Hetico: Her broad philosophy was one of objectivism, wasn’t it?
Dr. Marcinko: That’s right; and objectivism encompasses positions on metaphysics epistemology, ethics, politics and aesthetics. As a health economist, I interpret it aggregate the morality of rational self-interest and how society – or even an industry like healthcare – can stagnate when independent productive achievers (think doctors) begin to be socialized and even punished for accomplishments, even though society is more healthy and prosperous by allowing, encouraging and rewarding such self-reliance and individual achievement.
Ms. Hetico: So, now you are an ethicist, too?
Dr. Marcinko: Hardly, but independence and personal happiness flourish to the extent that we are free; and achievement rewarded to the extent that individual ownership of ideas and innovation is respected.
Ms. Hetico: Shall I add the moniker of “philosopher-ethicist” to your credentials?
Dr. Marcinko: Not at all. Sorry, my Jesuit background from Loyola College, and the Woodstock Theological Seminary in DC, bleeds-through sometimes. Actually, my favorite medical ethicist is John LaPuma MD, in Chicago.
Ms. Hetico: Good pun – with the “bleeds-through.”
Dr. Marcinko: It wasn’t intentional.
Ms. Hetico: Any last thoughts on medical unionization?
Dr. Marcinko: Remember, if you merely want a static job with promised security, pledged retirement benefits, limited goals and structured regulations; join a medical union [HMO, or privately accept any and all healthcare and/or governmental plans] and be mental laborer.
However, if you desire more, such as the possibility of a dynamic medical career, the unlimited security of your brainpower, defined retirement contributions, infinite potential with risks and rules you can create along the way; don’t join the union, remain a real professional and be a physician.
Ms. Hetico: Thank you Dr. Marcinko. It was the most unusual interview I have ever done.
Dr. Marcinko: And, thank you too! It’s an important topic that has not been addressed much on the blogs!
Ms. Hetico: I’m sure this discussion will change all that. I can see the avalanche of email opinions, text messages and blog reactions now; both for and against.
Dr. Marcinko: I hope so, too! BTW: Who do you interview next?
Ms. Hetico: That information is confidential.
Dr. Marcinko: OK then: What’s for dessert? Peach-cobbler, I hope.
THE END
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