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Doctors group tells Excela Health board of trustees it wants to maintain independence

| Tuesday, June 25, 2013, 10:55 a.m.
Guy Wathen | Tribune-Review
Dr. Matthew D’Onofrio (center) addresses Excela Health’s board of trustees on Monday June 24, 2013, at St. Vincent College’s Fred Rogers Center after Jennings Womack (left), Westmoreland-Frick Hospital Foundation president, took the microphone from board chairman Jim Breisinger (right). Breisinger didn’t believe it was “appropriate” for D’Onofrio to speak at the meeting.
Guy Wathen | Tribune-Review
Bob Rogalski (left), Excela Health CEO, speaks during an open board of trustees meeting in Latrobe on June 24, 2013. At right is James Breisinger, chairman of the board.

Representatives of a group of more than 50 doctors who say they've rejected Excela Health's attempts to buy their practices, reiterated on Monday that they want to continue working as independent physicians, not health system employees.

The physicians' comments were made during an annual meeting of Excela's board of trustees, where health system officials said acquiring as many physician practices as possible is crucial in beating back competition from UPMC and the newly created Allegheny Health Network.

Speaking on behalf of the group, Dr. Matthew D'Onofrio said the physicians have formed the Westmoreland Multi-Specialty Group and vow to remain independent while still referring patients to Excela facilities.

The group, representing a variety of medical specialties, will share billing and other business functions, a number of the physicians said.

But D'Onofrio almost didn't get the opportunity to address the crowd of more than 90 people in St. Vincent College's Fred Rogers Center.

After asking to speak, D'Onofrio was told by board chairman Jim Breisinger, “I don't think that's appropriate,” quickly moving to adjourn the session.

But Jennings Womack, longtime president of the Westmoreland-Frick Hospital Foundation — the system's philanthropic arm — approached Breisinger and politely took the microphone from him so D'Onofrio could deliver his brief speech.

“I think it's important for everybody in this room to hear this statement,” Womack said.

D'Onofrio said physicians in the new practice “have dedicated their professional lives to Westmoreland County. Simply put, we come here today as friends of the health system. We don't see ourselves as competitors.”

He said they want Excela to treat them “as partners.”

All agree the primary hurdle is financial.

Physicians earn income from insurance reimbursements from carriers such as UPMC, Highmark and Medicare. As employees of Excela, their income would be limited to their salaries along with productivity incentives based on patient volume and admission numbers.

If the physicians become health system employees, they would be required to admit their patients to Excela facilities, a giant plus for the health care system, according to a number of the physicians.

To generate revenue, both UPMC and the Allegheny Health Network have been recruiting independent physicians outside of Allegheny County along with their patients.

Many of the doctors in D'Onofrio's group said they have been courted by both systems.

Breisinger said the state Insurance Commission “didn't do any favors” when it approved the merger between Highmark and the West Penn-Allegheny Health System (to form the Allegheny Health Network) in April.

He said admissions needed to keep that operation solvent will come at the expense of community hospitals such as Excela.

“Everybody already knows those admissions are going to come from UPMC and community hospitals like Washington, St. Clair, Heritage Valley and Excela,” he said.

Breisinger said Excela must retain its patients in order to survive, and that means obtaining as many physician practices as possible.

“This is all about competition. People in Pittsburgh want to take food off the table in Westmoreland County and put it on their plates,” Breisinger said.

Excela CEO Bob Rogalski conceded that morale is low among physicians and employees at Excela Westmoreland.

“We have a wonderful culture in most of our facilities. ... We have a little bit of work to do in Westmoreland. I think that's an area where we have the most independent physicians,” he said. “The system would like to work with our independent physicians.”

Excela officials cited other issues that have placed a drain on the system.

The health system is defending itself against 115 lawsuits filed by patients who allege they underwent unnecessary cardiac intervention procedures from two cardiologists, according to Excela counsel Tim Fedele.

The lawsuits may have contributed to a decline in the number of open-heart surgeries and heart catheterizations performed at Excela, Rogalaski said. Open-heart surgeries have declined from a 65 percent market share to 41 percent while catheterizations have declined by 30 percent, he said.

Like other community hospital across the country, Excela faces myriad financial problems, said Tim Loch, chief financial officer, and financial decisions are becoming as important as medical ones.

Among other challenges, he noted:

• Admissions are declining as more patients opt for treatment at urgent care centers, medical malls and ambulatory clinics.

• There is more competition from other health care systems.

Medicare reimbursements are down by 2 percent.

The amount of bad debt hospitals incur is increasing.

Patients are delaying elective surgeries and other treatment because of insurance considerations.

Richard Gazarik is a staff writer for Trib Total Media. He can be reached at 724-830-6292 or at rgazarik@tribweb.com.

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