A THANKSGIVING DAY INTERVIEW 

PROLOGUE:

 There are a million stories out-there in the healthcare administration space and blog-o-sphere. They encompass all stakeholders from medical students, to physicians and patients, and to payers, governments and related sponsoring companies. 

My name is Dave Marcinko and I’ve held several professional hats in my career. I’m a physician-executive, health economist, financial evangelist, publisher, editor and above all continually strive to be an innovator. As Founder of our companion premium print-subscription guide Healthcare Organizations [Financial Management Strategies], I am always on the lookout for the next innovative, state-of-the-art vision or new-wave idea to stoke my passion for healthcare financial management on both the micro [medical practices and clinics] and macro [hospitals and healthcare organizations) economic scales [www.HealthcareFinancials.com] 

So, there I was – ending my day at the office in the typical fashion – looking for new trends, topics and thought-leaders in the world of domestic medical economics and finance, when this woman sat down at my desk.

As usual, it was a journalist, but an educated one. She was not your typical journalist either; she knew her stuff. Her name was Hope. She is a nurse and professor of healthcare administration – an author like me – and former national quality improvement medical director for a public company. Sure, she had a lovely face and a quick smile. But, she was hardcore to the bone; and not in a good way. We scheduled our interview – a week later on Thanksgiving Day 2007 – to get my personal take of the medical union situation specifically, and industry dynamics in general. It was a Thanksgiving Day I still remember. The topic was suggested to her from a reader. It was an excellent one. 

THE INTERVIEW

Ms. Hetico: Good afternoon Dr. Marcinko.

Dr. Marcinko: Pleased to see you, Ms. Hetico. 

Ms. Hetico: First off, in the interest of full disclosure, we have met before, correct? 

Dr. Marcinko: Yes. I was just trying to remember how long ago it was when we first met; way back in a different life. If I recall correctly, you were a nurse-executive at a small specialty hospital where I held privileges in the early eighties, right? 

Ms. Hetico: And, I recall you as a surgical department and residency program chairman, and later as the general medical staff VP. Tell me, are you still a runner? 

Dr. Marcinko: Sure thing; middle-distance for almost than 30 years now. I loved running in Philadelphia as a student, especially along Boathouse Row. It was not unusual for me to run daily from the Ben Franklin Bridge, to City Line Avenue. But, I don’t run in the rain or snow anymore, and I’ve slowed down somewhat.

Ms. Hetico: And, according to your self-written epilogue, it seems as though we’ve both had diverse career experiences since then; protean almost. 

Dr. Marcinko: My motto is: movement is life – life is movement.  

Ms. Hetico: Now, you have written and lectured on medical unions and related concepts for almost a decade, and yet the situation has waxed and waned over time with no real follow-through. How did you first get started studying medical unions, and why? Is the concept even still viable today?   

Dr. Marcinko: Well, there are 1.1 million or more physicians in the United States; including the allopaths, osteopaths, podiatrists, etc. Let’s be sure to include the optometrists and dentists as medical providers too, for larger numbers.  The brutal supply-demand calculus of the matter was that there were too many doctors, of all stripes, in the short term. 

In fact, it has been projected that if the physician supply pipeline ceased today, it would take until the Year 2010 for demand to reach market parity. Semantics aside, this slight oversupply is more than just bad distribution since physicians do have a choice of practice venue. It’s just that many do not care to live in rural or remote cities, with inhospitable climates or a dearth of cultural activities. Hence, many doctors congregate in large cities or near hospitals, surgery centers or medical schools, for collegial, professional or other social reasons.  

Ms. Hetico: Well, your thoughts seem to fly against conventional wisdom that there are not enough doctors. I mean haven’t the nation‘s medical schools just accepted the largest class in history to make up for a perceived dearth of supply? More than half are female and minorities. So, if you are correct – and I am not sure you are – one might reasonably wonder how this oversupply happened.   

Dr. Marcinko: Simple. The mothers and fathers of a bygone generation told their sons to become doctors in order to make a good living and have a personally satisfying life. In the seventies, with the advent of feminism, our daughters did not have to marry doctors to achieve these same results. They became empowered to become physicians themselves.  So, for a time, there were too many doctors chasing too few patients. Ergo, the start of a supply side disequilibrium driving medical fees – with assistance from managed care entities that recognized the trend early on – down, down, down; much to the fiscal detriment of medical providers.

But, perhaps to the benefit of the patients they served. Incidentally, President Nixon tried to flood the nation’s medical schools in the seventies, in a like manner to stoke the supply side and drive down fees; but failed. Managed care, and the woman’s liberation movement, succeeded.  

Ms. Hetico. How so, and what a sexist and/or biased idea? 

Dr. Marcinko: Not at all! If you don’t believe me, just ask any patient who has never had prior access to any type of medical care or insurance about what he or she thinks about the initial supply-side driven HMO’s – and be humbled by their positive reply – approximately 45 million uninsured strong.  

Now, if you never had healthcare before, managed care was great. It was a boon to the primary care guys, FPs and internists who became gatekeepers, etc. Not so great if you were a specialty provider however, or remembered the fee-for-service days.  But, it offered affordable care to those most in need …. Something pretty hard to criticize in theory! 

I tell interns, residents and graduate students today that if you want to be a saint – value altruism and have a passion for health and caring for humanity – then by all means go into medicine; especially global healthcare.

But, if you want to be a capitalist, go elsewhere. Just don’t let you decision to opt for medical school to be a knee jerk one, based on past and very much dated perceptions by your parents. 

Ms. Hetico: Or, enter the career by default?.

Dr. Marcinko: Exactly. 

Ms. Hetico: Go where, since all my research indicates that healthcare has, and continues to be, one of the great growth engines of the economy as well as driver of jobs?

 Dr. Marcinko: I don’t know; but young folks should take a look at telecommunications, business, engineering, computer sciences and molecular biology. And, sure the healthcare space grows jobs, but not necessarily the kind of low-paid or entry level positions that the best and brightest of our young people crave. The growth is bottom-up. 

Ms. Hetico: Don’t you have any examples at all, or just vague generalizations and pabulum?

Dr. Marcinko:  Gosh, you are harsh! 

Ms. Hetico: That’s my job and what our readers expect. 

Dr. Marcinko: OK, just take a look at emerging health firms and even new industries in the channel, like 23andMe [the Google financed company founded by biotechnologist Linda Avey and healthcare business executive Anne Wojcicki who is married to Sergey Brin].  They hope to soon launch a service that can access a patient’s genome [genotype] for disease risk analysis, physical traits [phenotype] and ancestral origin; in short the entire personalized human genome. 

So, we do have an amalgam of opportunities in medicine here [as just one example] for bright youngsters; from finance, to accounting, to medicine, genetics, marketing, the Internet 2.0 and business administration, etc. A mash-up of them all – if you will.

Ms. Hetico: Please do continue as you seem to be on a roll; albeit perhaps a misguided one. 

Dr. Marcinko: I don’t think so. Look, today you either have to be an esoteric clinical specialist to command high fees – or accept no insurance or third party reimbursements with a private-pay retainer practice opting out of Medicare for at least 2 years – or possess something other than a warm body and medically degreed pulse to flourish in the current Darwinian cost constrained environment. 

Ms. Hetico: Any other clinical examples? 

Dr. Marcinko: Sure, concierge medicine, consumer directed healthcare plans, retail medical shops, physician and nurse-executives 2.0; etc.  And, for those really inclined to be physicians, I think a medical degree is just the entry point with further education and mandatory deep-knowledge differentiation. I mean, why work to impact one clinical life at a time, when you might conceivable be able to positively affect entire groups of patients, en masse. 

Ms. Hetico: Except if that one life is your own.

Dr. Marcinko: Agreed … But for this, you’ll need deep expertise and another synergistic graduate degree; maybe even an MBA, PhD, JD or CPA, etc. Just as graduate school is the new college; a dual-degree practitioner is the new physician-executive / leader, etc. 

Ms. Hetico: Very Interesting, but I meant are there any similar union examples from the secular world? 

Dr. Marcinko: Unfortunately, most of them. Just look at the automobile industry. My immigrant dad was in the UAW for more than 50 years. He worked other jobs and was able to pay for my private medical school education along with private college and graduate school for my brother and sister, who is a trauma nurse stationed in Iraq. She retried as an operating room administrator and joined the army at age 45, after a fit of post 9/11/01 patriotism. The point is that medical unions, like the UAW, will not change the supply/demand equation. People don’t buy American cars just because they are union made-in-the-USA, or numerically abundant.

But, a dearth of medical school admission seats, or lack of interest in medicine as a profession by the best and brightest may induce a “brain drain”, which I think will ultimately lead to inferior RD first, but not necessarily worse care for patients, at least in the interim or short-term. I mean, do I have to reiterate the Institute of Medicine’s recent dismal quality proclamations, or the VA debacle at this so-called federalized union? All this is well known in healthcare. None is surprising. 

 Ms. Hetico: So, if your posited supply-side brain-drain won’t hurt patients, then the problem in healthcare today is on the demand-side? So, let blame the doctors, right? 

Dr. Marcinko: Well, consider Paretto’s Principle or the 80/20 law. In the short and medium terms, patient care won’t be materially impacted since most physicians do a good job,  and most patients don’t need heroic care. Yet, when they do, we spend 80% of our healthcare expenditure in the last year of life.  This was the promise of managed care, but we have bastardized the concept of managing the expensive 20% of care to that of restricting the remaining 80% of care. A few of us may need genetically engineered medicine to be sure, but the vast majority needs basic medical care to keep from becoming the vital few who require more intensive costly care.  

In the much longer term, RD will be affected although I am not sure how negatively. I mean, perhaps researchers will begin to use sparse resources more selectively and the rush to bring new drugs to market by big-pharma will slow down to true advancements; rather than incremental money-driven molecular moieties. 

IOW: Fewer but better drugs, evidence-based-medicine, coordinated care, etc; the basics. Ultimately however, it will affect care as the demand side takes over … as it will or already has. There are just too many patients in the baby-boomer funnel to pay for every heroic treatment under the sun; for them all. The demographics are just too insurmountable … Sans, a real generational delivery, or supply-chain break-thru – which could happen!

Ms. Hetico: So, what happens to provider fees? 

 Dr. Marcinko:  In the current scenario physician fees will go down from payers; as patient demand increases; absolutely.  And, the feverish doctor induced-demand we are experiencing to compensate for those fee reductions will pale by comparison. The fee decreases will be geometric compared with the provider-induced arithmetic demand increases, which won’t support the existing economic infrastructure.  Although this is not so controversial today, you have to realize that when I first began pontificating about it all more than a decade ago; I became quite the pariah, I might add.  

Ms. Hetico: Perhaps you were not so PC then, as you are now?

Dr. Marcinko: Age has mellowed me. And, there is a saying to the effect that: “One is never a prophet in his own tribe.” So, I really don’t take criticism personally, anymore. 

Ms. Hetico: But, what about the patients – what will happen to them and to us as future patients?

Dr. Marcinko: It’s very likely that there will be cutbacks in Medicare and the affluent will have to pay more. Alan Greenspan recently said that we will have a dramatic increase in Medicare co-payments, approaching more than one-hundred percent at the higher levels.

Ms. Hetico: So, what is the problem today with medical unions? 

Dr. Marcinko: Let’s historically back up a bit first. Please put away your pitchfork. I am only the messenger.

Ms. Hetico; OK; sorry to push so hard – but you do seem to ask for it?   

Dr. Marcinko: You’re right; I am a bit of a thespian. My daughter even uses the term “actor”; others have called me a “ham.” Nevertheless, I remember how Bill Gates of the Microsoft Corporation in Redmond Washington, annihilated IBM two decades ago with little more than 2,000 non-unionized “Microsofties”, versus over 400,000 lifetime “IBMers”.  In another example, recall how more ATT employees – unionized through the Communication Workers of America (CWA) – imploded the industry. Clearly, Mr. Gate’s concept of “masses of asses” was correct. You need more than a medical degree; you need innovation and a sustainable competitive edge – from synergy within or without the existing infrastructure.  Or, create a new framework. Doesn’t Bill wonder why a medical degree is even needed to treat some folks – at all?

Ms. Hetico: Do you know Bill Gates well? 

Dr. Marcinko: No, not at all. But, when I contacted him to write the Celebrity Foreword to a book I was writing at the time (circa 2000), he referred me to his then Chief of Global Healthcare Management, Ahmad Hashem MD, Ph, who did a great job for us.  Now, we are in the third edition of The Business of Medical Practice [Profit Maximizing Skills for Savvy Doctors] (available at Amazon.com, our corporate website or the Springer Publishing Company, etc). So, I was, and remain a great fan of Gates and MSFT.

Ms. Hetico: Do you own any MSFT stock? 

Dr. Marcinko: Not nearly enough I’m afrid.  And my point is the he didn’t disdain me like the bureaucrats (read “unions”) at some of the other Fortune 500 companies I contacted for help. I was an individual, not a group …. Individuals lead, groups follow.

Ms. Hetico: What does all this have to do with medical unions?

Dr. Marcinko: The U.S. economy has shifted over the last two centuries from one grounded in agricultural, to industry, then manufacturing, and now to an information-based technological macroeconomic infrastructure. Americans no longer labor with their backs, and pure union physical muscle is a concept best resigned to the historic past, rather than the proactive future. If not, medical unions will become like the UAW or CWA. So, ask yourself if you really want to be treated by a unionized doctor?   Moreover, the noted economist David Birch, PhD champions the idea that that the economy hasn’t “added one industrial job in the United States in fifty years and we’ve created 70 million jobs over the past five decades, and not one in manufacturing.” Furthermore, labor unions in the past thirty years have exerted a disproportionate influence on the civil rights movement, even has they have declined in number, often protecting the incompetent worker from dismissal even for just cause. Labor unions just seemed determined to get crushed in the next century’s economy. And, that’s a shame since that could have provided an important voice in the debate about health benefits, job safety, child care and technology training, etc.Just look at this 2008 presidential political season. Where are the unions? Even when marginally successful, unions provide a passionless, adventure-less and wholly demoralizing life, which adds little to the human condition and lacks the self esteem and self actualization potential promulgated by Abraham Maslow and others.

Ms. Hetico: You are quite the historian? 

Dr. Marcinko: Thanks. No doubt some of these greats, if alive today, would be in disbelief about how highly educated physicians are clamoring to join labor unions. After all, there are few civil rights abuses occurring in medicine and few believe that physicians, dentists and podiatrists are the exploited [healthcare] workers they had in mind.

No doctor treating tuberculosis is in danger of developing black lung disease, no overworked dentist is practicing in an oral sweatshop, and no podiatrist is working as an indentured servant against his economic will. As for the potential to contract AIDs, hepatitis, MDR-TB or other blood or air-borne communicable diseases; OSHA is alive and well. 

Therefore, the human rights issues often exposed by physician unions only serves to trivialize the real abuses which still take place in the industrial and manufacturing sector at the turn of the last century. Just ask Nike of the last decade, The Gap or other retialers about worker-abuse? 

Ms. Hetico: Atlanta is not really a union town, is it? 

Dr. Marcinko: No, it’s not. But I’m from Baltimore – a decidedly democratic and blue collared one – but I am not being parochial at all. 

Ms. Hetico: So, what about health information technology and the new medical collectivism? 

Dr. Marcinko: Analysts of the digital age claim that technology will profoundly change our culture; and the healthcare industrial complex is no exception.

Some thought-leaders and pundits like Ester Dyson, opine that technology democratizes [medical] society, so that as physicians, we are all perfect substitutes for one another – with few physicians having an edge over the other. This paradox is both a cause for depressed fees, as well as a compliment to the high quality and standardized American medical education process. Other medical ethicists fear technology may further divide medical social classes into technology, business and financial information participants. 

Ms. Hetico: Any other relevant examples? 

Dr. Marcinko: Certainty, concepts such as telemedicine, robotic surgeons, bionics and molecular biology have transitioned from the laboratory down to practical and economical production levels. Biowares, in order to blend living cells with synthetic substances to form replacement materials and organs, can be algorithmically developed.  Animal and human cloning is also within the realm of probability, rather than possibility, as recent public cloning episodes demonstrate. From monkey stem cells – to bio-tech firm Medistem Corp’s endometrial regenerative cells and Dr. Shinya Yamanaka’s skin-to-stem cell work at Kyoto University with pluri-potent human cells – all may ultimately be performed by non-physicians.

Of course, there are those medical theologians that predict technology will hasten the demise of medicine as an intensely personal process. The truth probably rests in an amalgamation of these major points of views, but almost certainly not with the reformation of labor unions. The fact remains however, that technology pushes down the skill and educational requirement of many professions, including medicine. So, if there is such a thing as an elite new-collectivism in medicine – and technically there should be – it’s more like power to the people; not the medical establishment. Today’s healthcare is about personal brains, bites and bytes, and not necessarily widespread collective union brawn.

Ms. Hetico: Yet, many docs are still technophobes, today; right? 

Dr. Marcinko: Yes, it’s a shame, and that’s why I edited the just released Dictionary of Health Information Technology and Security (Amazon.com, our corporate website, or directly at: www.HealthDictionarySeries.com)

Ms. Hetico: Was that another shameless plug for your firm, its books, or your new dictionary series on health economics, finance, managed care and health insurance? 

Dr. Marcinko: Yes it was a plug; but it wasn’t’ shameless. We were able to make dictionary lexicology exciting for the health administration space by using a digital wiki-styled contribution platform, coupled with a quasi peer-review process. Pretty unique, I am told!  

Ms. Hetico: Actually, it does seem pretty cool. 

Dr. Marcinko: Yeah, I like working with folks much smarter than I. 

Ms. Hetico: Speaking about brilliance, I understand you are a fan of Michael Porter, PhD of Harvard University. So, what about medical competitiveness, and the union experience, in 2008? 

Dr. Marcinko: I am indeed a Porter fan, and wish he would write something for this blog or our subscription premium-quarterly guide [www.HealthCareFinancials.com]; as we do have an excellent section on healthcare competition by financial futurist Bob Cimasi of Health Capital Consultants LLC, out of St. Louis, MO, from which to draw.

Mike, if you read this please contact me privately (MarcinkoAdvisors.@msn.com). Let’s talk!

Seriously, though. I used to go up to Harvard Business School from Philadelphia when I was a medical student to hear him lecture. That was several decades ago, long before he was famous. Nevertheless, old monopolies are crumbling because of tougher new competitors. For example, our newspapers have to compete with the new internet 2.0; our electric utility companies battle low-cost local start-ups, and telephone companies must begin installing fiber optic and wireless lines to fend off cable companies. The rush to more intense competition cannot be stopped. You either keep pace or get crushed. So too, are quasi-monopolistic organizations such as the medical industrial complex. 

Ms. Hetico: How so? 

Dr. Marcinko: In organizations such as PPOs, CDHCPs and concierge medicine, patients exercise greater control over physician selection, have quicker access to specialists, and encounter fewer restrictions on their care. As these market forces grow and compete against highly structured – staff model – managed care companies; some industry analysts believe that membership in such HMOs will decline and negatively impact the medical union experience that was primarily an emotional reaction to these restrictive HMOs (and their corresponding fee depressions) more than a decade ago. Although inefficiencies in any business often opens up in the short term – and can be greatly exploited by creative and visionary entrepreneurs – sane market forces usually prevail in the long run. Furthermore, unions deter rather than augment competitiveness, according to most business and economic authorities.

Ms. Hetico: Can you explain any further, with an illustration? 

Dr. Marcinko: Competitive businesses and corporations are becoming more flexible in their healthcare care requirements, while unions keep trying to regulate the workplace with union contracts to control entire industries. Yet, in the new healthcare economy of MCOs and HMOs, doctors are headed toward more internal competition and less external control over patients.  It will be interesting to see how the new UAW control of its own VEBA healthcare plan works out.  

Meanwhile, some medical union advocates want to retreat to a more regulated age. Unions function best when they soften the harshest edge of capitalism, not try to change its nature. Healthcare providers of all sorts must choose between staying flexible to ride out tough times, or adopt a hard, brittle line that might crack under the pressure of competition. 

Ms. Hetico: What about flexibility and virtual reality in the current healthcare industry? 

Dr. Marcinko: We must remain fluid and market-responsive. In most large corporations and many top-down business models, unions are not market responsive entities and the ability for rapid change is not inherent in their structure. These traditional organizations represent a rigid or “used-to-be” mentality, not a flexible or “want-to-be” mindset.   The AMA learned this lesson the hard way. Virtual medical corporations often possess a market nimbleness that cannot be recreated in a union environment.

Going forward, it is not difficult to imagine the following new rules for the new virtual medical economic climate. 

Ms. Hetico: What are your new rules of healthcare market competition?

Dr. Marcinko: Well, they are not all mine of course, but here goes:

[A] Rule No. 1 Forget about large office suites, surgery centers, fancy equipment and the bricks and mortar that comprised traditional medical practices. One doctor with a great idea, good bedside manner or competitive advantage, can outfox a slew of non-physician MBAs, while still serving the public and making money. It’s a unit-of-one healthcare economy where “Me Inc.”, is the standard and physicians must maneuver for advantages that boost their standing and credibility among patients and payers. Examples include patient satisfaction surveys, outcomes research analysis and economic credentialing. However, you should realize the power of networking, vertical integration and the establishment of virtual medical practices – which come together to treat a patient – and then disband when a successful outcome achieved. Job security in this structure is achieved with continuing successful end results, not only a degree or union card. Medical futurists even presume the establishment of virtual medical schools and hospitals, where students and doctors learn and practice their art on cyber-entities that look and feel like real patients, but are generated electronically through the wonders of virtual reality units. 

[B] Rule No. 2 Challenge conventional wisdom, think outside the traditional box, recapture your dreams and ambitions, disregard conventional gurus and work harder than you have ever worked before. Remember the old saying, “if everyone is thinking alike, then nobody is thinking”. Do union members think rationally or react irrationally?  

[C] Rule No 3 Differentiate yourself among your peers. Do or learn something new and unknown by your competitors. Market your accomplishments and let the world know. Be a non-conformist. The conformity of labor unions is an operational standard and a straitjacket on creativity. Doctors should create and innovate, not blindly follow union leaders into oblivion. 

[D] Rule No 4 Realize that the present situation is not necessarily the future. Attempt to see the future and discern your place in it. Master the art of the quick change and fast but informed decision making. Do what you love, disregard what you don’t, and let the fates have their way with you. Then, decide for yourself if unions adhere to any of the above rules? 

Ms. Hetico: I see … but what about medical union or workplace strikes, walk-outs, protests, etc? Do they have a place in the scheme of things, and are they effective? 

Dr. Marcinko: Dismiss the potential of using a walkout or strike against patients as a weapon against MCOs, insurance companies or the Federal Government. Used at the onset of an organized union effort, we saw a few years back how they rendered the nescient unions impotent and ineffectual. And, to say it was a PR disaster is an understatement.

Ms. Hetico: Why was that? 

Dr. Marcinko: For more than 175 years the strike-weapon represented the ultimate power of the unions. But, for doctors there is un-willingness with medical labor unions to withhold care (strike). While self-noble in intent, it is just plain silly in business jargon – and affords little leverage in the negotiation process.  The inability to perform collective bargaining, because of federal and/or state anti-trusts issues, is similarly disadvantageous for unions. Just, look at the recent writer’s strike in Hollywood. If the likes of Dave Letterman and Jay Leno can’t write their own jokes; maybe they don’t deserve the monikers “comedian.” See what I mean? The same with our fellow docs! 

Ms. Hetico: Off-mark, again? 

Dr. Marcinko: Maybe, maybe not. Look at the Federation of Physicians and Dentists (FPD), an 8,000 member Tallahassee, Florida-based affiliate of the AFL-CIO, as few years ago. It represented fee-for-service physicians as a third party negotiator, but laws prohibited independent contractors from collective bargaining on their behalf.  In a similar example of federal strength, the National Labor Relations Board, in Philadelphia several years ago, rejected a labor union’s (Local # 56-United Food and Commercial Workers, Pennsauken, NJ) request to represent a group of 400 plus New Jersey physicians in negotiation with a Ameri-Health, a Mt. Laurel, New Jersey based HMO. Those physicians would have been the first private-practice independent practitioners to gain that right, which is limited to salaried doctors at large HMOs and public hospitals.

Yet, without such power, many experts felt that medical unions had virtually no negotiating leverage at all; and that demise was certain. 

THE END (to be continued in January, 2008)

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