How physician misconduct affects a hospital's bottom line: 4 thoughts from healthcare litigator Rafael Villalobos

Hospital and health system earnings are continually threatened by outside sources like rising healthcare costs and revenue cycle management issues. However, some of the greatest threats to a health system's bottom line may reside within its walls.

Physician misconduct is one of those threats, says Rafael Villalobos, healthcare litigator at Eckert Seamans. He says physician misconduct can include verbal threats to staff and patients, expressing passive aggressive behavior, slamming doors or throwing surgical utensils, to list a few examples.

Mismanaging these actions comes at a high price. Physician misconduct can negate the hard work of hospital leadership and jeopardize a hospital's reputation, Mr. Villalobos says.

Before he joined Eckert Seamans, for over a decade Mr. Villalobos acted as chief legal counsel, senior vice president and director of insurance and claims for Philadelphia-based Aria Health System. In those capacities, he managed legal affairs for the three-hospital system and garnered experience in dealing with problem physicians.

Mr. Villalobos recently spoke with Becker's Hospital Review about physician misconduct and the steps hospital and health system leaders can take to manage this issue.

1. Physician misconduct is expensive. Mr. Villalobos says physician misconduct can cause thin trust and shift provider focus from the patient. A deterioration of workplace communication can lead to high turnover rates, less productivity and increased onboarding costs.

"Hospital administrators are well informed, hard working and face daily challenges — the reality is 'problem children' can undermine efforts the hospital administration makes to improve the bottom line," Mr. Villalobos says. "They underestimate how divisive physician misconduct is, how it erodes relationships among physicians, the medical staff and the administration. They underestimate how costly it is."

2. Health systems have an obligation to protect patients and staff. Physician misconduct can stem from stressed working conditions, hard-wired behavior, substance abuse and mental illness, among other things, Mr. Villalobos says. However, not responding to inappropriate behavior in an effective manor can lead to physically and morally damaging actions, like injury, death, malpractice suits and public scrutiny, he says.

Therefore, Mr. Villalobos says, "A call to action would be a good thing for hospital executives. It's not going to be painless. But the impact is huge. It's worth the endeavor."

3. Hospital executives need to establish misconduct protocols. There are many reasons hospital executives do not take action against physician misconduct, such as lack of documentation and a history of personal and professional relationships. However, Mr. Villalobos says quick action at the first sign of misconduct is imperative.

"You have to have a zero tolerance approach and be consistent in the application," he says.

However, hospital executives can help avoid physician misconduct by establishing a protocol from the beginning, Mr. Villalobos says.

"I think right out of the gate it comes to aggressive vetting for medical staff … critical thinking, judgment, identifying red flags and aggressively pursuing them," he says. "Often you can prevent a person from getting on the medical staff for appropriate reasons."

4. The worse thing to do is nothing. Mr. Villalobos says addressing physician misconduct with courage and commitment is worth the challenge. He says the price of inaction is too large to overlook.  

"I think one of the important takeaways is if hospitals take this seriously, they'll be surprised by how much respect they will get from staff," he says. "There are some fights that are worth fighting, and it's for the better of quality, safety and the bottom line."  

More articles about integration and physician issues:
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Physician who championed against long medical trainee hours dies at 86

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