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Wednesday Jan 25, 2017

Holy Toledo! As Bad Ideas Go, Closing Residency Is a Whopper

Last week, an iconic staple of our American ethos, the Ringling Bros. and Barnum & Bailey Circus, announced its impending demise after 146 years of hosting "the greatest show on earth." The circus had quickly learned that after one of its main attractions -- the elephant act -- was retired, crowds dwindled, along with profitability.  

In the shadow of that announcement, ProMedica -- a locally owned, nonprofit health care organization serving more than two dozen counties in northwest Ohio and southeast Michigan -- announced it would be "phasing out" its W.W. Knight Family Medicine Residency Program at Toledo Hospital. The unanticipated announcement of the closure of yet another legacy family medicine residency program (established in 1974) sent shockwaves throughout the region.

Ripple effects from the news spread to other Ohio residency training programs that, like W.W. Knight, serve impoverished communities. As fiscal loss leaders, such programs are the "low-hanging" fruit for mega health care organizations, which often are not based in the communities they serve.

The announcement unleashed a flurry of outrage, as chronicled in The Toledo Blade(www.toledoblade.com) and other local media outlets. The decision was also sharply criticized by the Ohio AFP(www.ohioafp.org), the Ohio State Medical Association and others.  

Sadly, I have seen this show before. In the late 1990s, another major nonprofit health care organization in Ohio announced it would phase out the St. Elizabeth Family Practice Residency Program in Dayton. That organization provided talking points eerily similar to those now being echoed by ProMedica. The decision set off a sequence of economic misadventures that resulted in the eventual closure of St. Elizabeth Hospital in 2000 after more than 100 years of service to the region.

What St. Elizabeth executives failed to realize was that they had gotten rid of their star attraction: the family medicine residency program. The decision has cost the community an estimated $17 million dollars per year(coastalresearch.org) ever since.  

Now the already disenfranchised community served by the W.W. Knight Family Medicine Residency will be further marginalized by corporate decisions that strategically shuffle residency program slots around the service area like pieces on a chess board. It has been reported that ProMedica will add new residency positions in Monroe, Mich., (roughly 25 miles north of the W.W. Knight facility) but that change would be of no value to the 5,000 patients already in need of more access to health care in Toledo.

Another local hospital, the University of Toledo Medical Center, has announced it plans to absorb an unspecified number of residency positions when W.W. Knight closes, but some of them likely will be converted to internal medicine slots. The net result will be a huge loss for family medicine in our state and the community this residency has served.

Transferring health care to any willing "provider" of care is not the solution, either. Family physicians are trained to take care of not only individual patients with a disease or chronic conditions, but entire families and the community in which they live. Mastering this component of the art of medicine takes time and relationship-building.

Those making critical decisions need to know both the "dollars and sense" of how much value these programs add to their overall bottom line.

  • Having access to a well-trained primary care physician lowers an individual's health costs by 33 percent(www.ncbi.nlm.nih.gov) through, for example, less use of emergency department facilities and decreased length of stays when hospitalized.
  • The Ohio Department of Health has designated Lucas County (where the W.W. Knight program is situated) as one of four priority health care shortage areas(www.odh.ohio.gov) in the state. Moving residency positions out of the county (and state) exacerbates the problem.
  • In a 2016 survey, national physician search and consulting firm Merritt Hawkins reported that individual family physicians provide an average annual net revenue of $1.5 million for their affiliated hospitals(www.merritthawkins.com). "Physicians typically generate considerably more in downstream revenue than they receive in the form of salaries or income guarantees," the report stated.
  • Direct and indirect graduate medical education Medicare pass-through payments generate an estimated $93,000 per resident. With 18 family medicine residents in the Toledo program, this translates to more than $1.6 million per year. Despite that figure, ProMedica claims the residency loses money each year.
  • The majority of W.W. Knight residents stay in the Toledo area after completing their training. Based on Merritt Hawkins' report, ProMedica's investment is more than recouped by adding to the number of family physicians whose patients ultimately benefit the organization's bottom line.
  • Finally, consultants cannot quantify the value of the long-term, trusted relationships patients have built with the residency's staff, faculty, residents and the community they serve.

In How the Mighty Fall, author Jim Collins outlines the five stages of decline for a corporation. The first stage is "hubris born of success." Once-great leaders often lose sight of what made them a success in the first place. When they begin reciting the rhetoric of success -- "no margin, no mission" -- this often is the first sign of danger. 

The second stage is the "undisciplined pursuit of more." In this scenario, organizations take giant leaps of chance away from the people, commitments and values that granted them their success.

The third stage is the "denial of risk and peril." For ProMedica and W.W. Knight, this is where the situation stands now. ProMedica is prepared with talking points to explain away the facts and weather a storm of community outrage, ignoring the reality that a poor strategic decision has been made.

Hopefully, this show will not end -- like Ringling Bros. -- with Collins' last two stages of decline: "grasping for salvation" and "death."   

If we passively allow top-quality family medicine residency training programs like W.W. Knight to fall prey to corporations who have not done their fiscal due diligence, others will follow. Corporations will simply convince themselves that their primary care health needs can be fulfilled by less appropriate interventions.

There is a reason patients remain loyal to family medicine residency programs and contribute generously to their affiliated hospital foundations. They know that the residents and their supporting staff are there in the community for good -- and not just when the bottom line is healthy.

Enduring care for a community will survive the inevitable threats of changing hospital administrations, fiscal shortfalls, mergers, consolidations, right-sizing, or the denial of risk and peril. We can only hope that ProMedica and similar health care organizations acknowledge the true value of a medical specialty that delivers complete physical, mental and social well-being for the entire life cycle. This show of commitment is priceless. When sustained correctly, it is among the greatest shows of service on earth.

Gary LeRoy, M.D., is a member of the AAFP Board of Directors.

Posted at 11:43AM Jan 25, 2017 by Gary LeRoy, M.D.

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