Legacy physicians' frustrations spur 'no confidence' letter

An unusual 'vote of no confidence' letter directed at Legacy Health System's administrators and chief executive officer that was drafted Ñ but never sent Ñ by at least 100 Legacy doctors has exposed tensions that many blame on tough economic times for physicians and their patients.

The draft letter created enough of a stir to bring doctors, board members and Chief Executive Officer Robert Pallari together to hash out problems, said representatives of both sides.

In fact, Legacy has hired a facilitator, Eric Allenbaugh of Allenbaugh Associates in Lake Oswego, to lead focus groups and conduct town hall-style meetings to let doctors air their frustrations, said Dr. Franklin Wong, president of the medical staff at Legacy Emanuel Hospital and Health Center and Legacy Good Samaritan Hospital and Medical Center.

Combined with the staffs of two other Legacy hospitals Ñ Mount Hood Medical Center in Gresham and Meridian Park Hospital in Tualatin Ñ about 2,000 doctors are affiliated with the health system.

'We have more people showing up in the emergency room, a growing number of patients who simply have no health insurance, declining reimbursements (paid to doctors for treating low-income patients) and new technology that is costly,' Wong said.

'How do we balance this with serving the community?'

The 'no confidence' letter grew out of doctors' frustrations with these problems, Wong said. It was never given to administrators because the doctors decided instead to set up meetings Ñ some facilitated by Allenbaugh Ñ with doctors, board members and Pallari.

Wong said he did not know of any previous expressions of 'no confidence' in Legacy administrators. The doctors are responding to 'extreme times in the state of Oregon,' he said.

Pallari and other administrators have been 'very responsive' to the doctors' concerns, Wong said.

For his part, Pallari said he was 'surprised' to hear about the draft letter and agreed to open discussions. He agreed to hire Allenbaugh, he said, because 'rather than argue and debate, it's our hope to work collaboratively.'

Neither Wong nor Pallari would describe doctors' specific complaints.

'Their concerns dealt with the health and success of Emanuel in regard to its programs, its ability to attract insured patients, its ability to financially survive, its ability to attract doctors,' Pallari said.

In Oregon's down economy, he said, Legacy has experienced 'a doubling in Medicaid and Oregon Health Plan patients that totals over 50 percent of the patients in the emergency room.'

Government reimbursements for taking care of those patients, he said, 'do not even cover half of a doctor's costs. That has created a difficult, tense environment, and it's taken a toll on doctors who have worked hard to serve patients and are trying to stay in business.'

Letter wasn't sent

The 'vote of no confidence' letter was made public in the July issue of the Oregon Health Forum newsletter, sent to subscribers this week. The newsletter also described a memo written by Wong in June to doctors in his medical group.

Wong's memo summarized meetings of Legacy doctors in April and May in which doctors complained of 'a widespread feeling of the lack of communication and trust between the medical staff and Legacy administration.'

At a subsequent meeting, about 100 doctors decided to sign the letter.

However, Wong's memo said, 'A meeting was convened between key physicians who supported this letter,' Legacy board Chairman Jack Winter, Wong and two other medical staff presidents Ñ Dr. Vincent Willeford of Mount Hood Medical Center and Dr. John Braddock of Meridian Park Hospital.

Wong wrote that 'communication between the medical staff and administration is the key to maintaining (medical) services but increasing them.'

The goal is to form a 'partnership in which the medical staff participates in the decision-making process.'

Relationships between medical staff and administration will be discussed at next Thursday's meeting of Legacy's entire medical staff, Wong said.

The health forum's newsletter Ñ which has 1,300 paid subscriptions and a readership of 10,000, according to its editor, Diane Lund Ñ is sent to health care providers, purchasers and policymakers.

The newsletter also reported that Legacy will operate at a 2.5 percent operating margin, lower than the typical 4 percent to 5 percent margin.

Pallari confirmed the figures and said the lower margin would 'preserve employees' jobs and maintain the kind of support that physicians need.'

In January, he said, Legacy gave employees a 3 percent wage increase.

Pallari's compensation Ñ $1.3 million in 2001, the latest year for which figures are available from the Oregon Justice Department's Charitable Activities Section Ñ is justified even in tight economic times, said Winter, the Legacy board chairman.

Pallari's compensation is in line with what other health system chief executives make, Winter said.

'We pay market-level compensation to keep the best and brightest,' he said. Pallari 'has been a highly respected leader,' he said.

Contact Mary Bellotti at This email address is being protected from spambots. You need JavaScript enabled to view it..

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