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Fiduciary Responsibility


If our practices are not well managed, be it a solo practice or a large medical group, it not only hurts us but our ability to practice the most effective, efficient medicine for our patients. We cannot best help people if we are not confident in our ability to understand and manage all the resources available in our practices and communities.

Fiduciary responsibility is the obligation for people entrusted with financial affairs to act in their client's best interest, theoretically being both transparent in their dealings and accountable for them. Typically, this applies to CPAs, lawyers, financial advisors and the like. Would that it were also true for our legislators, but that's a story for another day. To the point, physicians do not usually think of themselves in this financial role for our patients, except perhaps as an after thought, but there is good reason to do so.

Most of us rotated in our training through some publicly funded facility, the iconic county hospital in many cases, where we were forced to deal only with the reality of patients with limited resources. Having no specific training except OJT to cope, too often patient care became either game the (dysfunctional) system, kick the can down the road to somebody else's turf or spend a lot of precious time spinning your wheels. You weren't encouraged to be concerned about anything financial but in the end had to learn somehow to scratch for scarce resources for your patient. Generally, you just did the best you could until you rotated out, hopefully to a situation with more options.

For the majority who settled into a more middle class practice, we have likewise done the best we could medically for our patients but have had the relative saving grace of private insurance and/or patients' discretionary reserves to pay for whatever medical expenses we deemed necessary. Fortunately for our practices and for ourselves, given our likewise lack of training for private practice financial management, cash flow seemed to be ample for both. That is until managed care hit; our revenues flattened while our operating costs inevitably continued their climb. And, drum roll for the punch line, we also had no training to deal with economic changes in our circumstances either in running a business or, alternatively, functioning optimally in a larger organization.

So the average doc is under personal and professional financial pressure in a recently soured economy. You'd think that health care would be relatively recession resistant because of the wide base of insurance, but recent numbers tell a different story. 10+% of the population is out of work and even the employed are fearful and are husbanding their resources. Many docs' business is down; I even saw an ad by a plastic surgeon advertising a sale on cosmetic surgery!

Aside from these practical concerns, the ethical one about the tension between fee for service and the pressure to meet our financial obligations has heightened. Because if you do more, generally you get paid more. However, the public trusts us to do what is best for them first but also to be aware of the financial implications of our decisions as a close second. Would that it were always true, docs being subject to the same human frailties that our patients are, Oaths notwithstanding.

With costs continuing to spiral and with fees flattened under the "Managed Care" moniker, we're under the gun for our patients, our practices and ourselves. And we charge everyone the same. Democracy in action. Even the time-honored financially coping practices of overcharging the rich to afford to undercharge the poor and "Professional Courtesy" have been shelved by the growth of insurance coverage and our complete dependence upon it.

Briefly put, as never before, docs owe their patients some fiduciary responsibility. Firstly, to do the best we can for our patients while keeping their financial situations in mind in their care decision making. But secondly to manage our own professional affairs as wisely as possible to keep our costs down and cash flow up so that we can better achieve number one. If our practices are not well managed, whether in a solo situation or a large medical group, it hurts not just us but our ability to practice the most effective, efficient medicine for our patients. You cannot best help people if we are not confident in our ability to know and manage all the resources available to us, not just in our practices, but in our communities. And to know that our operations are cost efficient, not just a cost driver.

Another factor in our affairs that figures in driving higher costs to patients is that docs too often do not even know what other docs know or do. The old right hand, left hand thing. So we waste time and resources in delay, repetition, and ignorance, yielding a higher cost to patients and pressure on our own finances. I once heard our hospital chief of staff speak to our department telling us how he thought we should refer out a certain kind of patient problem because "you don't have the time or interest to do it yourselves." As chairman at that time, I rose and pointed out that he had just indicated that he had no idea what most of us, in actual fact, do.

As a follow-up, I surveyed our department about what we really do individually in our professional roles and distributed the summary back the next meeting. Everyone was shocked. No one had the slightest idea what the other folks were doing and this was in our own specialty in our own hospital! Across specialty lines it's even worse, both for individual areas of interest/expertise and because the new skills and knowledge are constantly changing and it's endlessly trying to keep up with who is doing what. And if I can't keep up with what I'm supposed to be doing, how in the world can I know what X dozen docs in 20-odd other specialties are doing? A local hospital based, regularly updated directory of skills and interests would be a timely addition to its web site. Hospital administrators please note.

So, to beat the dead horse yet again, docs have an increasing, visible, ethical and practical obligation to have some fiduciary responsibility for our patients. They expect us to. And to do that, we should have (had) some formal preparation on how to run our business and organizational affairs, we have to improve our system of communications (see last week's column) and, of course, we have to do the best we can to keep up with the kaleidoscopic scientific landscape. Gee, whatever happened to just take 2 aspirin and call me in the morning?

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