The COPA-cabana...

Maybe the Tribune ought to go back to nagging us about speed limits. They had an editorial in the Tribune yesterday about the Certificate of Public Advantage (COPA) constraining Benefis hospital and in their editorial they informed us that it is time to free Benefis from the yoke of tyranny. (So far the bill to revoke the COPA process cleared the Senate by a 40-10 vote.)

Can these guys ever get a story right?

The COPA was put into place because the Montana Deaconess Medical Center and the Columbus Hospital proposed to merge to form a monopoly. Monopolies are generally considered to be "not good things."

The dirty little secret in all of this COPA talk is that Benefis wanted the COPA. (The fact that it is a dirty little secret stems from the Tribunes apparent lack of desire or inability to accurately report the story. Ever see a Benefis ad in the Tribune...?) You see, when one proposes a monopoly, such proposition normally gives rise to intervention by the Federal Trade Commission, which is the federal agency charged with antitrust enforcement.

One way to avoid oversight be the FTC is to assert the existence of adequate state (not federal) oversight. Hence, Benefis was more than willing to sign onto the COPA, because they did not want to deal with federal scrutiny. (Given how rigorous the COPA is, which Benefis accepted willingly, you can easily guess how harshly they expected the federal government to view the merger application.)

So, when the initial term expired, they petitioned for relief from COPA from the Montana Attorney General. Since his legal credentials are significantly more polished than those of the Editorial Board (and apparently the legislature), he recognized the need for COPA. This was, of course, after Benefis sued to stop any competition.

Faced with the 20-bed behemoth (Benefis has a total of 502 licensed beds compared to Central Montana Hospital’s 20 licensed beds) to be operated by the Great Falls Clinic, Benefis did the next best thing: it started lobbying the legislature to relieve it from the 'burdens' of the COPA. And the Tribune has decided (based on what we don't know) that this is a good thing.

Do you really believe that 20 beds in this community will impact Benefis's ability to control the market? Ask local practitioners who have seen their staff lured away by Benefis. Ask the Clinic physicians who cannot get Benefis to cause the "overworked" anesthesiologists to handle their surgeries in Benefis hospital even though the anesthesiologists have contracted with Benefis to cover surgeries in Benefis hospital. Do we really believe it is better for patient care if patients are forced to bring their own anesthesiologist when having surgery in Benefis hospital. What's next, bring your own nurse and scalpel? (Next time you have surgery, ask the anesthesiologist how much he makes and how much vacation time he gets. Ask him if his group receives any sort of subsidy from Benefis.)

The Tribune says "Benefis is the only hospital in Montana and one of only three in the nation to be subjected to state regulation." That's because it is one of only three monopoly hospitals not subject to regulation by the FTC.

The Tribune says: "After all, the state "certificate of public advantage" process adds about $800,000 a year to the hospital's administrative costs." Benefis has never documented these numbers and, in fact, it seems like they jump a couple hundred thousand every time I hear about them. Has the Tribune ever seen financial statements of any kind that document a cost $800,000.00? Or do they just take Benefis' word for it? Can anyone say "spoonfed?"

Furthermore, if saving money was Benefis' goal, it would not have kicked Providence Services out of Great Falls because Providence Services allowed Benefis to obtain bond financing at good rates that it cannot get now. Benefis now asserts this is consequence of the COPA even though it never used to be a consequence of the COPA...until Providence Services was kicked out.

The Tribune goes on to say:

Under language added in committee, the bill would require that Benefis report annually to McGrath's office for the next two years regarding the quality of and access to health care; patient safety; patient satisfaction; health-care service changes, additions, and deletions; and "cost comparisons based on similarly situated health-care facilities."
Great. That and fifty cents will buy you a cup of coffee. Why? Because Benefis can report all it wants but the bill doesn't give the Attorney General jurisdiction to do anything.

The bottom line is this: I know people in this community who have been impacted by Benefis's heavy handed hiring tactics. Hard working local residents who get steamrolled. If you know anyone with any relationship to health care other than Benefis, talk to them. You'll see. And then urge that the SB323 be voted down.


Big Sky Husker said...

The hell with Benefis. I'll go somewhere else before I see them. The folks running it are a bunch of asses.

WolfPack said...


I think you are coming down a little one sided. Not every claim Benefis makes is without merit. The anesthesiologist issue for example. If I remember right, the complaint was that clinic anesthesiologist refused to sign up for hospital privileges so that they wouldn’t be in the pool for off hour on call duty. Clinic anesthesiologists were basically working banker’s hours, leaving all the crap hours for Benefis anesthesiologist to support. This was understandably causing a strain on the Benefis anesthesiologist staff. So clinic doctors supposedly were taking the complicated, low margin and off hour cases to Benefis. So Benefis just asked them to arrange for their own support staff instead of dumping all the undesirable burdens on Benefis’s staff. Clearly this situation left unchanged would require Benefis to pay their anesthesiologist more than the clinic in order to compensate for them difficult hours or they would defect to the clinic or elsewhere where the work load is less demanding. Who’s taking advantage of who here? Is Benefis really demonstrating a complete monopoly advantage? I think the clinics control of doctors is just as problematic as Benefis’s control of hospital beds.

GeeGuy said...

But what if Benefis were paying "its" anesthesiologists extra for the extra work? Do you know if Benefis is doing that?

And the description of the "clinics control of doctors" is a bit misleading. The Clinic doesn't control doctors, the Clinic is doctors. Explain to me how the Clinic prevents Benefis from recruiting its own doctors?

And, if the "clinic doctors supposedly were taking the complicated, low margin and off hour cases to Benefis," where were they doing the good surgeries? Oh, their hospital? So the basis for your argument is the 20 bed hospital that has been open for less than a year?

Look, I recognize there are two sides to every position. But as I read all the comments here and on the Tribune website, and from the legislators, it is absolutely amazing to me how people form their opinions without any knowledge of what is really happening.

WolfPack said...


I believe the profit center is the surgery room itself not the beds, so comparing 20 to 500 is misleading. Patents who require little or no hospitalization are the moneymakers. If you look at a loved ones bill you will see that the first few days is when all the money is billed. Once they are out of ICU and in a regular room the costs per day go down quite a bit. Since the clinic can pick and chose the type of procedures it does it can also effectively cherry pick patients that are usually better covered by insurance or pay by cash. I certainly do believe that clinic doctors/partners are instructed on how to maximize the clinics profit. This would only be good business and doesn’t necessarily directly negatively affect patient care.

I have no actual knowledge of the anesthesiologist’s compensation package but I assume it’s basically a fee for service setup. If they get called in they get paid. I just assume they are like the rest of us and would be willing to provide day time/non-weekend procedures for less compensation than night time, weekend or no notice procedures. I’ve known several people, especially with kids, make this choice in all types of industries. If you don’t have time to spend with your family an extra $20K-$30K wouldn’t be worth it. I’ve worked in industry where weekend and night time coverage was required. When you’re young and hungry the extra hours are not that big of deal but after a few years the extra money just isn’t worth it and you start to feel trapped and seeking other employment. There must be some reason clinic anesthesiologists aren’t demanding hospital privileges that would require them to share in the off hour work load.

Marcus Welby said...

What a load, wolfpack. As Geeguy said, your comments are emblematic of most 'opinion' on this subject. Short on facts.

"I have no actual knowledge of the anesthesiologist’s compensation package but I assume it’s basically a fee for service setup." How can your arguments be taken seriously when you preface them with a statement that you are essentially talking out your backside: "I have know actual knowledge..."

In fact, it's not fee for service. Benefis pays them additional money over and above their fees. Why? Oh, I don't know, maybe so they can make more and maybe so they will work odd hours.

Did you know some of these doctors have 10-12 weeks vacation per year? Did you know some of them make a million dollars a year? A million dollars a year with 12 weeks vacation is hardly overworked.

Oh, and one more thing, is it the Clinic doctors who are scheduling all of their surgeries at off hours? How is refusing care to patients of Clinic doctors going to change the need for emergencies?

Do some research before you defend the monopoly.

WolfPack said...

Dr. Welby,

Not being a doctor like yourself, you are right I did not know some of the facts that you have brought to this debate.

1. Anesthesiologists are not paid fee for service. They are however paid additional money for odd hours in addition to fees they are not paid (see first sentence?).
2. Doctors get three months vacation a year so they are not tired when they get off at 3:00am. Nor do they care if they miss their kids swim meet.
3. Benefis anesthesiologists are paid over a million a year and will work any additional hours they can to add to their already bloated income. Benefis anesthesiologists make nearly triple the national average for cardiologists.
4. Benefis anesthesiologists are bad for not wanting to work off hour support but clinic anesthesiologists are good for refusing to work off hours.

Clearly you are not a doctor and have no more first hand knowledge on this subject than I do. Why is it that only the pro-clinic side of this debate is given a pass for being loose with the facts and reason. I’m not a great fan of Benefis, my family has had some bad experiences there. I am also not a big fan of the clinic and its “doctor owned” inherent conflict of interest. I just don’t believe that Benefis is on the wrong side of every argument and that there is no merit to anything they have to say.

Anonymous said...

Benefis has the sole responsibility for providing operating room staff and equipment for patients of surgeons who have hospital privileges. This is an implied contract in exchange for a surgeon obtaining hospital privileges. Essentially all physicians who obtain these hospital privileges are then required to take call for their specialty. Staffing an OR means having nurses (RN, LPN), OR technicians, instrument technicians, front desk secretaries, etc, etc and oh yeah anesthetists or anesthesiologists on hand.

This is a supply and demand issue only. Some anesthesiologists work in hospitals full time and some work in outpatient surgery centers full time and some do both. This is America. Anesthesiologists actually make a choice about where they work. Those anesthesiologists who took the Hippocratic oath generally don't all get together and say as a large group... "We supreme beings will provide ALL anesthesia services everywhere in this town or else." These type of statements generally result from monopolies and also when there is a short supply unfortunately.

Anesthesiologists generally work hard, take a fair amount of time off, and are very well compensated. There are outside anesthesia management groups begging to come into Benefis and provide all anesthesia services for all surgeons. Why? Because there is a good profit margin. The current hospital anesthesia group controls who does and does not get anesthesia privileges. The answer to the problem is that the hospital clearly needs to either have all their anesthesiologists as hospital employees willing to assist ALL doctors with privileges or they need to have the outside management group take this over for them and do what is necessary.

Hospitals make money by having their privileged surgeons keeping their operating rooms busy. Allowing a group of anesthesiologists to cut out half of the surgical business by refusing to assist GFC surgeons and to threaten Benefis' bottom line makes no business sense and is flat out extortion in my opinion against our communities health. Benefis makes 10 million or so yearly. They supplement the current salaries of anesthesiologists, ER docs, etc. They have the capacity to solve this problem instantly.

ALL doctors provide free care and most all work late at nights at times. Its a privilege to help patients in need. The hospital doesn't have a monopoly on charity care. ALL community physicians (GFC and otherwise) provide free care. We provide this in our office, in the ER with consults, we provide it at our surgery centers and in the hospitals on the floor and in the OR. It goes along with the job description. You sometimes get paid and sometimes you don't. The whole cherry picking slant is insulting and ridiculous. Think about it.. if the patient doesn't pay the ER doc and doesn't pay the anesthesiologist, doesn't pay the hospital, do you think the GFC surgeon operating at the hospital on call in the middle of the night gets paid?

Marcus Welby said...

Wolfpack, you no read so well: "In fact, it's not fee for service. Benefis pays them additional money over and above their fees."

See, the anesthesiologists do get paid fee for service. And Benefis subsidizes them over and above that so they will make more.

And Anonymous, above, makes a great point about the economics of the situation vis a vis the hospital, its surgeries, and the bottom line. Given that, who do you think is behind the anesthesiologists' refusal to work for Clinic docs?

WolfPack said...

Dr. Welby- You’re right I don’t understand your writing very well. Fee for service is fee for service no matter if the fee schedule changes for off hours. The fact that there may be a premium for off hour procedures doesn’t make them hourly employees.

Anonymous- By using the term cherry picking I wasn’t referring to ER patients. You might find it insulting to insinuate that physicians decisions can be influenced by money but to deny this fact would be absurd. There are doctors in jail just like there are lawyers, accountants and astronauts in jail. Most professions have rules of ethical conduct that keep their professional opinions to clients somewhat separated from any kickback type compensation. By federal law doctors can’t receive a kickback for a referral to Benefis because of ethical conflicts. They can however receive a larger profit sharing check from the GF Clinic for a referral to CMSC. Why is one bad and the other unquestionable? What is the possible benefit of this directed referral to the Physician? Here’s a hypothetical setup from a government report:
( http://www.medpac.gov/publications/congressional_reports/Mar05_SpecHospitals.pdf )

“What is the order of magnitude of physicians’ financial incentives to increase utilization when they own a hospital? What follows is a hypothetical example of the marginal profit associated with a group of cardiologists each referring just one additional patient (above the current patient load) for coronary artery bypass graft (CABG) surgery. In fiscal year 2002, the base payment for CABG surgery with cardiac catheterization (DRG 107) was roughly $24,000. Our examination of Medicare cost reports and hospital financial statements suggests that variable costs equal approximately 60 percent of the DRG payment, roughly $14,400. Hence the marginal profit—payments minus variable cost—would be $9,600 per patient ($24,000– $14,400). If 10 cardiologists owned a 3 percent interest each and they all induced one additional surgery per year, each cardiologist’s income would increase by $2,880 $9,600 x 3% x 10). T h e degree to which physicians will alter their behavior when faced with financial incentives of this magnitude is not clear. Note that variable costs consist of only costs that vary with patient volume and do not include fixed costs (such as depreciation and interest costs). Hospitals will use the marginal profits on their first patients to cover the hospital’s fixed costs, which prevents the owners from having to absorb hospital losses. After the hospital’s fixed costs are covered, the remaining marginal profits of $9,600 per CABG patient would accrue to the owners of the facility.”

Assuming both facilities are adequate why wouldn’t a doctor be tempted to send patients to the clinics hospital? Besides the only one hurt by the CMSC referral is Benefis.

Anonymous said...

There is a huge benefit to this community in having competition in health care whether it is choice of pharmacies, dentists, physicians, outpatient surgery centers, or hospitals. You need look no further than what happened with surgery centers in Great Falls with increased competition. About 8 years ago the Great Falls Clinic and Harold Poulsen from Central Montana both obtained Certificate of Need licenses from the state to build surgery centers. Benefis, a recently formed monopoly, said the sky would fall and immediately sued the state over this. The GFC ultimately resolved the issue and formed a joint venture with Benefis on the surgery center and Central Mt went on their own. Benefis then built up the Benefis West outpatient facility to directly compete with its own joint venture surgery center with the Clinic. (Be very careful how you pick you partners). Anyway, my point is that due to competition alone, we went from one really shabby, slow, outdated outpatient facility at the hospital to four outstanding new very efficient leading edge facilities: Great Falls Clinic Surgery Center, Benefis West, Central Mt Hospital and the newly done Benefis East OR’s. A direct observation: when a hospital alone owns all these facilities it is run like the post office or other government facility. 'Take a number', 'I have tenure', etc. There is no innovation and no incentive to perform or improve.

I would encourage you to go over to Central Montana and take a tour. They have a Nordstrom’s service attitude. The staff at Benefis is great as well. The difference is that they are overloaded with patients. Rooms are full. Patients are stacked up. We need other options and Central Mt Hospital is one of them.

Physicians at the GFC send their patients to the facility which can best take care of their patients. We have an obligation to do this and are not motivated by the very nominal financial return you refer to regarding GFC admitting to Central MT Hospital. No offense, Wolfpack but you flat out do not understand the nature of the physician-patient relationship and your inferences are again offensive as you presume things you don’t know.

You are correct in your statement that it is illegal for Benefis to pay physicians or induce them in order to get referrals. I suspect you would be surprised to hear how Benefis attempts to skirt the law with below market tenancy rates for some docs and excessive medical director fees. Even the COPA doesn’t mean much if its not enforced. The ultimate loss of the COPA will allow Benefist to fully act like the monopoly it is. Central MT Hospital is in no way at this time a significant competition. Look out. Benefis will increase rates after the COPA is over and it will come from YOUR pocketbook through increased insurer rates.

WolfPack said...


I agree with everything you have written except the physician owned part. I am all for physicians being paid well and having decent working conditions. Unlike Welby above I don’t even care if they make a million dollars plus a year. I just don’t like professional decision compromised by a physicians undisclosed financial interests. I’m sure this would have no effect on yourself or most physicians. There are however in every profession a certain number of individuals whose judgment is significantly affected by their financial situation. Physician owned would be fine with me if there was some disclosure on how much financial benefit was returned to my physician for different treatment options. I know exactly what his direct fees are but have no idea what difference it makes to him if I have an MRI at the Clinic or at Benefis. Your accountant can’t send you to an auditor that he has a stake in. If you have an engineer design you a bridge he can’t refer you to a construction company he has a stake in. Why with the greater level of personal trust given to physicians should a patient not expect the same level of protection from conflicts of interest? I am a free market guy so all of your competitive arguments resonate with me. I don’t mean to sound anti-physician. I think physicians should have a special respect in our society but that respect is tainted as the physician/patient relationship moves towards a businessman/customer relationship. The same goes for Benefis as it moves from a philanthropic non-profit model to a profit/status driven model. You sound like you are a clinic physician. Since you are anonymous, could you give me some idea what GFC physicians receive for being partners in relationship to their practice’s net income? You are right. I am arguing with no real information about physician’s financial incentives, but since the GFC partners don’t publicly release it what option do I have? Are patients not allowed to be involved in this debate unless they have access to their physician’s financials?

Anonymous said...

To date the CMSC has lost money. There are no profit incentives for CMSC.
The clinic has had several partners leave the clinic yet stay in town the past few years. The main reason has been income; they can make more money in independent practice than they can at the clinic.
If a young woman calls the non-clinic OB docs, the receptionists are trained to ask about insurance. If there is no insurance, the standard answer is to call the clinic.
Wolfpack, can you say "inurnment"? Benefis is engaging in this activity as we speak when they offer physicians $2M to leave the clinic. You think this poses no conflict of intrest? It is in fact illegal.
Get your facts straight before you spout off.

Hawkeye said...

To Wolfpack, (from anonymous number one, I guess I needed a name, this is confusing)

I appreciate the opportunity to clarify. You wrote "I just don’t like professional decisions compromised by a physicians undisclosed financial interests."

A long story…. Individual physicians in any legal medical group can not be reimbursed based on the number of tests, MRI, lab, studies, admissions etc. the individual doctor orders.(Stark regulations) It is however very legal for physicians to own, refer patients to, and profit from labs, surgery centers and yes, hospitals. It is also legal to refer to members of your own group. None of this is a kickback. Profit made from these areas goes toward the overhead. As there are over one hundred providers in the GFC the return per one MRI is negligible. However, we unabashedly own and operate the outstanding facilities we profit from. It is not a coincidence that there is profit and there is excellence.

Note, it is illegal in a bad way for physicians who are not a legal group to refer to a hospital or other entity and receive compensation (direct or indirect) from that facility for those referrals. Examples are hospitals paying for marketing for doctors, giving low tenancy rates, paying off student loans, and overcompensating for directorships.

As far as physician ownership goes, you either believe having doctors in control of most aspects of your health care is a good thing or you don’t. Competition is good, even in health care. Compare and contrast the advances in medicine to our educational system the past 20 years. Competition breeds efficiency and excellence. It weeds out the bad and promotes the good. There is generally no tenure in medicine and this is good.

The argument from Benefis, the Tribune, and some of the blogsters is that the competition is unfair. This is ridiculous in my opinion. Benefis makes ten million per year. They merged into a monopoly and with release of their only watchdog (COPA) they will be free to charge much more. This town NEEDS the competition.

Would you rather have the Benefis administrators making your inpatient health care choices or would you rather have doctors? The GFC wants to maintain control over how our patients receive care in and out of the hospital. Is that a bad thing? We do not want to leave these important decisions to administrators. Physicians have not had adequate input into how care is given at Benefis and that is what prompted our decisions to involve ourselves to a greater degree in the facility aspect. It is naive to think that there are no vested interests in the hospital. The administrators at Benefis are paid well and when Benefis makes more, so will the administrators. The free market still rules despite the nonprofit status. In fact it has been somewhat nauseating to hear the Benefis CEO pipe off about all the charity care the hospital gives, when in fact he is about the only player who gives away nothing. For every patient the hospital admits who doesn’t pay there is a GFC or other community doctor there taking care of him or her in the wee hours and not getting paid while a Benefis administrator is at home collecting his/her salary.

The long answer to your question is that no matter what model of health care you choose there will be a potential for abuse. This potential exists in the group doctor setting with an ordering for an MRI for example and it exists in the hospital setting with physicians who collect additional income supplements indirectly benefiting from the hospitals bottom line. Patient trust is sacred to nearly all physicians. You bring up a potential for abuse but have you ever actually heard of or experienced the type of abuse you are concerned about? I can appreciate the concern but practically don’t feel it’s an issue and neither do my patients. In fact if anything, there are circumstances in which a patient chooses to go to Benefis for personal or other insurance reasons and frankly in some areas Benefis technology is lacking enough compared to GFC facilities that I have a dilemma as far as how to disclose that. I try to be as fair as possible. I immediately refer to Benefis when the opposite is true. I can guarantee you the Benefis CEO doesn’t fret about this type of decision. It is because he doesn’t have the responsibility for patient care. If you don’t keep the patient number one you won’t have a healthy practice or a clear conscience.

Since you have concerns about this referral issue I would assume others do as well. I personally feel it would be a good idea just to notify all new patients of the potential conflict of interest with a statement such as: ‘During the course of your treatment your provider may refer you to another physician, lab, hospital or other facility. As a partner in this organization your provider may indirectly profit from this referral.’ How’s that? I don’t think this will practically change any patient’s decision on where they get their health care but if it will prevent another HIPPA paper work nightmare or Sarbanes-Oxley regulation it is worth it.
Anonymous number one

dr. evil said...

Thank goodness, there is a forum where honest discussion can occur, try writing a letter to the editor of the Great Falls Tribune which supports medical competition in Great Falls and will it ever see the light of day. There is also the awarding of "no bid" construction contracts by Benefis to Sletten Construction (a Board member) no conflict of interest there (see Iraq-Haliburton). As long as a little 20 bed hospital can exist, the people of this city have a chance at quality healthcare.