Trauma center

A power struggle between doctors and administrators embroils Mission Hospital — one of the best — and costs its CEO his job.
By Edward Martin


He never hears the sirens or sees the black smoke billowing above the tangled metal. Five days before Christmas, Jeff Brown had been riding beside co-worker Mark Thompson in their heavy Ford construction truck with Asheville’s holiday lights sparkling in the distance. Darting down South Tunnel Road with police in pursuit, an SUV had veered the wrong way down the exit ramp onto Interstate 240. It slammed into the truck, killing both drivers instantly.

Brown lies motionless as rescuers race flames to free him. Breathing through an emergency tracheotomy, he’s rushed two miles to Mission Hospital, where trauma surgeons will remove his ruptured spleen to stem internal bleeding, ventilate his bruised lungs and close the gaping wounds of compound fractures. “They reconstructed my face from my nose to my throat,” says Brown, 37, who awakened from a coma four days later. At their home in nearby Skyland, his wife fills in the blanks in his shattered memory, rattling off surgeons’ names and their roles. “They saved his life,” she says.

His story isn’t unique. One of the state’s best hospitals, Mission admitted 44,000 patients last year. But there’s another tale here, not of miracles but the volatile mix of medicine and money, of independent-minded doctors and strong-willed administrators colliding like the vehicles that nearly took Jeff Brown’s life. A yearlong conflict, with skirmishes dating further back, has been waged in cyberspace, country-club locker rooms and amid muffled echoes in hospital hallways. It has wrecked relationships and left deep scars of distrust. Mission is searching for a replacement for its CEO, once a rising star among the nation’s hospital executives. His job and possibly his career are among the casualties.

Some of the issues are unique to Asheville, but many are universal, such as the shifting, symbiotic relationship between doctors and the places where they treat their patients. “Certainly, over the next 10 years, a very large number of physicians will become employed by health systems,” says Steve Shaber, a health-care lawyer with Poyner Spruill LLP in Raleigh and consultant to the 12,000-member North Carolina Medical Society. “Everybody — physicians, administrators, practice managers, hospital trustees — is desperately trying to get control of health-care costs that are growing at roughly three times inflation.”

But more than that fueled this fight. Simmering grudges and perceived slights, not to mention the traditional tension over the balance of power between doctors and administrators in large hospitals, played a part. “Nobody is happy with what has happened here,” says William McCann, president of the Buncombe County Medical Society. “Nobody is proud of this. We all wish it hadn’t happened. Now we’re working to see that it doesn’t again.” Though he represents about 800 members, as an allergist he has limited dealings with the hospital and was more an observer than a combatant.

But many physicians — more than 700 admit and see patients at Mission and about 90 are employees — see themselves down in the trenches with their profession in peril. “Doctors are feeling very unsettled,” a senior hospital administrator admits. “To them, the world as they have known it is totally disappearing.” Alan Baumgarten, a family practitioner who is Mission’s medical chief of staff, agrees. “Historically, 20 to 25 years ago, physicians were the No. 1 go-to for hospital administrators. They had a much larger say in the management.”

Then, most hospitals stood alone, governed by rubber-stamp boards of businessmen and run by CEOs hand in hand with local doctors whose portraits would hang in the hallways after they died. Hospitals rarely competed. Then health care grew up. Driven by market forces, hospitals merged into networks to negotiate with insurers and increase patient volume to justify expensive equipment. Mission Health System is now North Carolina’s eighth-largest. Though dwarfed by the biggest — Charlotte-based Carolinas HealthCare System, which owns 25 hospitals and employs about 40,000 — the 7,000 people on its payroll make it western North Carolina’s largest employer. Its namesake alone — flagship of the system’s four hospitals — has annual gross revenue exceeding $1 billion.

As it grew, Mission Hospital earned an enviable record for patient care. In this year’s Business North Carolina rankings, compiled by Golden, Colo.-based Health Grades Inc., it’s in the top 10 in 10 of 14 specialties, most of any hospital in the state (pages 66-67). There is no hint that care was jeopardized or even that most patients were aware a power struggle was unfolding a few paces from their beds. “That was never an issue,” says cardiologist William Hathaway, the vice chief of staff who will succeed Baumgarten next year. “We realize it could have been. We had a lot of turmoil and disruption, and it certainly was not a pleasant environment here.”

We tried to build a relationship with him, but he was never close to physicians,” says Frank Moretz, a private-practice anesthesiologist who has had privileges at the hospital for 28 years. “He was always aloof. I invited him to a number of functions, but he was always too busy to come.”

The board hired Joseph F. Damore in 2004 “to be an agent of change,” he says, to position the hospital for health-care reform or whatever else the future might bring. A round-faced, plainspoken man with a banker’s grasp of dollar signs, he had spent 14 years as CEO of the slightly smaller Sparrow Health System in Lansing, Mich. Its flagship hospital, too, was known for quality care. He had bolstered the system’s financial health by buying up — integrating, it’s called in the industry — private medical practices. “Joe came from a model where there was a lot of physician employment,” Hathaway says. “He attempted to reproduce that model here, and it didn’t work.”

Maybe that’s because medicine, molded by the region’s history, geography and traditions, is different in this mountain city of less than 80,000. A glimpse at why can be seen after a two-minute shuttle ride on the 90-acre campus down the hill from the labyrinthine red-brick hospital where surgeons put Jeff Brown back together. Here, past and present converge. Urologists use the latest da Vinci surgical robots while, on the lobby wall in bas-relief, the angel Gabriel comforts Jesus in the garden of Gethsemane. This is St. Joseph’s.

Mission Memorial Hospital dates to 1885, when a branch of the Women’s Christian Temperance Union opened a charity infirmary in a five-room cabin. Catholic St. Joseph’s began in 1900 as a tuberculosis sanitarium that grew into a full-fledged hospital operated by the Sisters of Mercy. Private nonprofits, they began merging in the 1990s, seeking efficiencies of scale as medical costs soared 15% a year nationwide. Mission was the big sister, but it wasn’t given free rein in the merger.

To assuage antitrust concerns, the combined hospital signed what is called a certificate of public advantage, pledging to restrain charges and committing to bare its financial soul to state regulators. It’s the only hospital in the state under such constraints. “Last year, we were underneath what they said we should be,” says George Renfro, an investment executive and chairman of the 20-member board of directors. Regulators determined that Mission charged 18% less than “peer hospitals” with similar demographics. “But, yes, it puts tremendous pressure on management. None of us want to go to that annual meeting in Raleigh and have to explain why our costs exceeded the limit.”

Damore took pride in bringing Mission in under the wire. In an interview with Business North Carolina last year, he outlined how he had held cost increases to less than 4% a year. “When you look at our brethren at Carolinas Medical Center in Charlotte and across the state, you’re looking at about 7%.” Net revenue increased 44% during his tenure, reaching nearly $960 million in fiscal 2009. Operating margin was about 4%. But Damore points out tight finances are squeezing hospital CEOs nationwide. Nearly one in five was forced out or quit last year — a record, says the Chicago-based American College of Healthcare Executives.

Hospital stereotypes are fodder for television situation comedies — prima donna doctors versus penurious administrators — but in real life it’s so serious the state Medical Society holds what it calls boot camps on the topic. “There’s an inherent checks-and-balances system between hospitals and medical staffs — and I’d throw in boards of trustees, too,” says Shaber, who conducts the sessions. “All want to run a good hospital that provides good patient care and, second, a good place to work. Is that tension? Yes, it can be when things aren’t working well. But when everybody realizes they’re all in the same boat with shared goals, it shouldn’t be.”

As 2008 turned into 2009, Mission’s sails tattered. In April, the hospital in nearby Clyde, struggling to right itself financially after a patient’s death cost it its Medicare certification, paired with the hospital in Sylva and affiliated with Carolinas HealthCare System. Most Asheville doctors had expected them to join Mission. “The Buncombe County population base isn’t sufficient to support all the services we have here, in terms of specialty care and tertiary care,” McCann says. “Having Carolinas HealthCare take over Haywood Regional and WestCare in Sylva left a lot of physicians concerned their referrals would go to Charlotte.”

Many blamed Damore and his team for, as one doctor says, “dropping the ball.” Adds McCann, “Haywood Regional was the drowning man, and Carolinas looked like a really sturdy lifeboat. The Mission lifeboat didn’t look as sturdy.” But there’s another side: Haywood Regional and Mission — and their doctors — had long been regional rivals. “It’s naïve and simplistic to blame the administration,” Hathaway says. But many Asheville doctors, feeling their livelihood had been threatened, did just that.

After a spring of rising anger at Damore and his top managers — four or five are frequently named by critics — dissident doctors stumbled on a way to focus their ire. It was a community-news blog called Ashvegas, an Internet site created four years ago by Jason Sandford, former multimedia editor of Mountain Xpress, an alternative newspaper. “I had an anonymous person mail me a letter about what was going on at Mission, and I posted it pretty much without comment.” Others flooded in, clearly from doctors and hospital employees. Some claim they feared retribution if they voiced their complaints to administrators. “Ashvegas became the home of the leak,” Baumgarten says. “Frankly a lot of things were intended to hurt people.”

Emboldened by anonymity, many of Damore’s detractors lashed out at his management style — one doctor repeatedly referred to him as “The Dictator.” Damore won’t discuss details of the controversy or his resignation. “I was asked to lead Mission to a higher level of performance. An organization must continually change and improve to become better in carrying out its mission of providing quality, compassionate, cost-effective health care.” One of his initiatives increasingly was singled out on the postings: Mission Medical Associates, a subsidiary launched to acquire doctor practices.

In theory, such deals free doctors from the drudgery of running a business — especially one notoriously mired in paperwork and red tape — so they can concentrate on medicine. But it’s also good business for hospitals, helping to hold down costs and assure a steady stream of referrals. The largest practice to commit was Asheville Cardiology Associates, with about 30 doctors, the state’s biggest cardiology group west of Charlotte. Hathaway, who is a member, calls it a merger, not a buyout. “Our alignment with the hospital is going to by far give us the best opportunity to practice, for strategic reasons regionally and for external economic factors over which we don’t have much control.”

But the move only deepened chasms in the medical community. “This has been a steadfastly independent medical community that for years has thrived on doctors owning their own practices and being their own masters,” Hathaway says. “The concept is threatening to them.” The Buncombe medical society polled its members last summer. McCann says, “The overwhelming tidal wave of opinion was: ‘I want my autonomy. I don’t want somebody else telling me what to do, when to do it, how to do it. I don’t want to be employed by the hospital.’ The message they felt like they were getting from the hospital was, ‘It’s my way or the highway.’”

Hathaway insists that Mission doesn’t coerce practices to join and offers alternatives to integration. A study of physician grievances, commissioned by the board at the height of the controversy, recommended that the hospital “pursue all available affiliation options with local physician groups.” Practices are free to say no, though many doctors fear they could be forced into merging with hospitals by health-care reform or be fenced out if the hospital acquires other groups to perform their specialties. “A lot felt Mission would be in direct competition with private practices,” McCann says.

”It all seemed to come down to money, Ashvegas’ Sandford says. “The doctors, especially the specialists, wanted to keep making as much as they could, but they feel challenged by the hospital going out and trying to buy up practices.” Doctors employed by hospitals typically earn less than those in private practice, according to the Englewood, Colo.-based Medical Group Management Association. Median compensation for a private-practice anesthesiologist in the Southeast, for example, was $414,000 in 2008, compared with $373,000 for those in a hospital practice.

There’s more to it than money, McCann says. “For a community our size, we’re blessed with an enormous number of well-educated, well-trained physicians. A lot are attracted because it’s a great community to be a member of. But it also attracts physicians who value their autonomy, their independence.” Mavericks. And driven by the economic forces facing most hospitals, Damore was attempting to rope them in.

In late July, he, Renfro, Hathaway, Baumgarten and Kris Hoce, CEO of Mission affiliate Pardee Hospital in Hendersonville, journeyed to Washington. At a conference on low-cost, high-quality care sponsored by the Institute for Healthcare Improvement, Damore and Mission were stars, with the hospital cited as one of the nation’s best in providing it. But back in Asheville, around the coffee pot and dishes of M&Ms in the first-floor physicians lounge and in offices of some of the city’s private practices, doctors were fuming. “I don’t think at that point, Joe recognized how serious it was,” Baumgarten says.

By the time they returned from Washington, tempers were boiling. In a letter to doctors Aug. 3, Damore and Renfro acknowledged that the “rumblings of physician concerns have become unmistakable” and apologized “for perhaps being too slow to respond.” They also pledged to scale back buyout efforts. But the effort to appease failed. On the night of Aug. 20, doctors delivered a manifesto to the board. Signed by the heads of 13 medical practices and more than 130 physicians, it contended that Damore and his executives “indicate a preference for control and domination,” claiming they had attempted to buy practices without consulting their members and bypassed doctors in making hospital decisions. They were forcing a showdown.

The breaking point was the loss of the man who indirectly might deserve credit for saving Jeff Brown’s life. Over 10 years, surgeon Michael Buechler helped transform Mission trauma care into a certified, highly trained department of its own. Last year, its emergency room saw 100,809 patients, though not all of them were trauma cases. Buechler’s department had five trauma surgeons. It needed one or two more, he argued. But they don’t come cheap — the median annual salary for a hospital-employed trauma surgeon in the Southeast was about $400,000 in 2008, according to the Medical Group Management Association.

Buechler butted heads with Damore and his administrators, which delighted the dissidents. “Sometimes you need a spark to get everyone in an uproar,” Hathaway says. “This was the perfect storm, and that was the catalyst. It was used by various people to push their agendas — some of which were valid, but some of which were not handled in the right way.” Buechler resigned in protest in October. That same month, Damore handed Renfro his resignation, effective Jan. 31.

The board chairman wasn’t surprised. “Obviously, you don’t get to that decision without a lot of conversation back and forth. It was his decision, but it involved conversations back and forth over a couple of weeks. Now the questions are: How do we move forward? What is the plan? How do we see ourselves jointly resolving this so we can deal with other issues?” Looking back, he says, it wasn’t just one thing that led to the split. “At the end of the day, there was a lot of friction with the administration — enough that we were at a point that it was time to move on and get those issues behind us.” Then he adds, “These are our neighbors and friends and the guys we play golf with.”

But as one doctor who defended Damore against calls for his dismissal on the blog last summer noted, “While we don’t always agree, he must serve as a change agent that guides the system into an ominous future, relative to reform and new competition. We don’t like change at Mission, particularly we as physicians. But the folly of firing the change agent is ludicrous. What will the board do when the new guy or gal introduces needed change? And the next? And the next?”

Buechler, who declined to be interviewed, returned to the hospital staff at the beginning of this year. On the 10th floor of the old St. Joseph’s building, sun streams into a corner lounge where families wait while loved ones undergo cancer treatment. A few blocks away, grading has begun on a $56 million cancer outpatient center, scheduled to open in 2012. It’s part of a $65 million bond issue that sold out within hours in February, reflecting the system’s credit AA rating. Despite the turmoil, Mission’s financial health is strong. A construction crane towers above the main building. Throughout the year of discontent, building — expansion — went on unabated.

With former Mayo Clinic executive Carlton Rider filling in as CEO, Renfro hopes to name a permanent one before this year ends. A Los Angeles-based search firm, teamed with a local committee that includes three doctors, is looking for what he calls a special candidate. “Hopefully,” he says, “there’s a spot where the two can come together: financial responsibility and medical excellence.” But for everyone to agree on how to do that might take a miracle like the one that saved Jeff Brown.