Doctors allege shuttling patients among hospitals put profit ahead of safety

By J. Patrick Coolican

Wednesday, April 3, 2013 | 2 a.m.

Two former St. Rose Dominican Hospital emergency room doctors say they were forced to transfer patients from one St. Rose hospital to another so its owners and their boss could profit — at the expense of patient safety.

The doctors allege in similar lawsuits that the frequent patient transfers among the three St. Rose hospital campuses — Rose de Lima and Siena in Henderson and San Martin in the southwest valley — put profit ahead of patient care. When they resisted, they say they were retaliated against and eventually fired.

The 3-year-old ambulance company that was used to shuttle patients was partly owned by both the hospital company and the director of the emergency department at the Siena campus at the time, Dr. Richard Henderson. According to their lawsuits, Henderson pushed hard in emails to ER doctors to promote patient shuttling and authorized bonuses to doctors who transferred the most patients to other St. Rose facilities.

Henderson stopped working at St. Rose last July, the hospital said.

Since then, the pressure to transfer patients via Community Ambulance has dramatically diminished, said a hospital source with knowledge of the situation.

Among the defendants named in the lawsuits, filed last year in District Court by Dr. David Watson and Dr. M. Mark Ferdowsian, are St. Rose’s parent company Dignity Health; the company contracted to provide ER services, Emergency Medicine Physicians, and its former medical director, Henderson.

According to the lawsuits and interviews with Watson and Ferdowsian, Henderson and the hospital company frequently requested patient transports by Community Ambulance not out of medical necessity but as a business strategy — detailed in various staff emails from Henderson — from which they would profit.

According to Watson and Ferdowsian, the idea was to move patients from the more crowded Siena campus in Henderson — which would allow for more open beds for lucrative surgeries there — to the less-full San Martin campus.

Henderson would profit from the patient transports because of his status as a co-owner of the ambulance company, while Dignity Health, the parent company of St. Rose and also a co-owner of the ambulance company, would also benefit by shifting patients from the busier hospital where it needed open beds for elective surgeries, to the less-busy hospital.

Kate Grey, a spokeswoman for St. Rose, said she could not comment on the ongoing litigation, but said the Siena campus, located at the busy intersection of Eastern Avenue and St. Rose Parkway, was consistently on “code purple,” meaning it had an overloaded emergency department.

The hospital is expanding to meet the demand with a new tower and has also instituted a sophisticated, computerized patient management system to deal with the overcrowding. These steps offer evidence, Grey said, of Siena’s crowded conditions, which necessitate the high volume of patient transfers.

She said patients are explained the benefits of transferring and given the option of doing so. She also said that patients are only billed if the transfer is due to medical reasons; patients are not billed if they are transferred purely to relieve overcrowding.

Grey also noted that none of the doctors in question worked for St. Rose. They worked for Emergency Medicine Physicians, which St. Rose hires as a contractor to staff its emergency department.

Indeed, in court papers, St. Rose argues that because the hospital did not employ Watson and Ferdowsian, it is essentially a bystander that the physicians shouldn’t be able to sue for wrongful termination.

The doctors said they were suing St. Rose because the hospital is responsible for what happens on its property and in fact, as part owner of the ambulance company, knew about and was complicit in the plan to transfer patients.

An attorney for St. Rose parent company Dignity Health did not respond to phone messages. Neither did an attorney for Henderson and Emergency Medicine Physicians. In an email, Henderson said he wanted to refute what he called “empty allegations,” but ultimately declined to comment on the advice of his attorney.

The doctors’ former employer, Emergency Medicine Physicians, argue in court documents that Ferdowsian’s and Watson’s employment contracts require them to enter arbitration to settle disputes. District Court Judge Doug Smith agreed in the case of Ferdowsian, whose case was dismissed and will now be decided by an arbitrator. According to his attorney, arbitration is expected to cost Ferdowsian $50,000.

A judge has yet to rule on the Watson case.

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Watson and Ferdowsian say the ambulance was only licensed for nonemergency transport services but was transporting patients who faced medical duress.

“They weren’t nonemergency patients. Some were quite critical,” Watson said in an interview.

A source with knowledge of the situation, as well as a former member of the hospital medical staff, and who both were granted anonymity in order to speak freely, corroborated this account. The former member of the medical staff said, “It became more and more expected to transfer sicker people.”

By consenting to the transfers, the doctors say they were in danger of violating their Hippocratic Oath to do no harm.

The suit further alleges that Ferdowsian and other ER physicians were ordered by Henderson to “falsify patients’ medical records to state that the patient was stable, when in fact the patient was not stable or unconscious, to qualify the patient for nonemergency transport via Community Ambulance.” Such falsification of records is grounds for discipline by the Nevada Board of Medical Examiners, the lawsuit notes.

In his lawsuit, Watson said it was his refusal “to participate in the unethical and unlawful scheme or to accept the bonus” that led his boss to retaliate by wrongfully firing him.

“I had a 10-year career I had to either give up, or go against the oath I took on as a physician,” Ferdowsian said in an interview.

The doctors say that after Community Ambulance won a business license from the Henderson City Council in 2010, the push to transfer began in earnest.

Ferdowsian said in the interview that he knew something was wrong when he was reprimanded for treating a cardiac patient in the catheterization laboratory or “cath lab” at the Rose de Lima campus instead of transferring the patient to Siena as was preferred because the company wanted to centralize cath lab work at Siena.

“That was the beginning of where the decision was taken from the doctor,” he said.

Both lawsuits invoke the case of a gravely sick 16-day-old baby who arrived at St. Rose de Lima hospital, where a doctor determined the child needed pediatric critical care services at the Siena campus and requested a Henderson Fire Department unit for transport.

But according to the lawsuits, Henderson ordered that Community Ambulance transport the child instead. He made the request despite longer wait times for Community Ambulance compared to Henderson Fire Department’s quicker response times of 10 minutes or less, according to the lawsuits.

The court papers include email exchanges between Henderson and the other doctors in the ER group. In a November 2010 email, he discusses ways to punish doctors who do fewer patient transfers and reward those who tally more transfers:

“(T)op quarter $1,000, next quarter $500. Bottom quarter up or out talk at annual evaluation.” In other words, according to doctors who received the email, Henderson proposed that doctors would be divided into strata based on who recommended the most transfers, with the top group winning bonus money while those who performed the least would eventually be terminated.

Transferring patients was such a priority that doctors were ordered to fill out non-transfer forms, explaining a decision not to transfer patients.

In another email, Henderson expressed concern that doctors were too quick to rule out transfers: “How do you weed out the people that call a runny nose ‘unstable for transfer’? The performance we (admin) are looking for are transfers. Suggestions?”

A former member of the medical staff put it this way: “There was constant pressure to transfer transfer transfer.”

Doctors raised concerns about the aggressive transfer policy.

In an email contained in the court papers, one doctor wrote: “Do we run into any trouble on the transfer bonus if a patient deteriorates en route? I would hate for an attorney or worse yet a family member to think that their client/family member was transferred only because the doc got a financial bonus.”

In another email from that time, Watson argued against the financial incentive: “We should transfer when appropriate and with no regard to bonuses or fines.”

Some doctors expressed concern that they were violating state and federal statutes meant to prevent health care providers from profiting by referring patients to their own services. State law prohibits such conflicts of interest, and there are similar provisions in federal law.

In this case, the doctors raised concerns in emails among themselves and with Henderson that the transfers were a case of Henderson referring patients to his own ambulance company.

In the emails attached to the court documents, Henderson is open about the financial — rather than the medical — necessity of the transfers. At one point, he refers to them as “purely financial transfers.”

In another email, Henderson offered a lengthy defense of the transfer policy: “(M)any of you have angst over us transferring patients when there are beds being saved for surgery patients. I don’t....Fair or not surgery pays better than cost and Medicare pays less than cost. So as you would guess the hospitals that fill their beds from the ER struggle financially. Those that fill their beds from the OR do well. Because I have always felt that I would would rather practice in a hospital that is doing well financially than one that is struggling I have supported rather than fought against the notion of keeping the (operating room) cranking even when we are suffering in the (emergency department)....I have recognized this painful financial reality for years; long before I even thought of getting in the ambulance business. If we are part of making this happen we are heroes. If we obstruct, we are history. Your efforts in keeping this machine going are recognized by admin. While other (Emergency Medicine Physicians) sites are being looked at with a jaundiced eye by (St. Rose parent Dignity Health), our admin defends us as being part of the team, part of the solution. That, folks, is job security.”

Two other former members of the St. Rose medical staff, who were granted anonymity to speak freely, paint a nuanced picture of the situation. They say Watson and Ferdowsian raised valid concerns — which were shared by other members of the medical staff — about Henderson’s ordering doctors to transfer at-times critical patients on a non-critical ambulance he co-owned. But they also say St. Rose would have jeopardized its financial health by using beds slotted for surgery patients for the emergency department. And, in the absence of those beds, they say, the emergency department was indeed badly overcrowded. Given that overcrowding, they say the transfers were often justified. They also said they were satisfied with the level of care given by Community Ambulance.

Still, another source said, medical staff raised concerns about the aggressive transfer policy to Emergency Medicine Physicians management. They were ignored, the source said.

A source with knowledge of the emergency department said the intense atmosphere of bonuses and intimidation based on patient transfers ended immediately after Henderson left.

Watson now commutes to Miami, where he practices emergency medicine for two weeks straight every month before returning home.

Ferdowsian says his income practicing at a community health clinic is roughly one-third what it was at the St. Rose emergency rooms. He was forced to short sell his home because of the ordeal, he said.

In 2011, Ferdowsian sent an email and a signed letter via certified mail to the Nevada State Board of Medical Examiners, detailing his allegations of unethical conduct on the part of Henderson. He said the board never contacted him to investigate.

Sun researcher Rebecca Clifford-Cruz contributed to this report.