What are your options and what would you recommend?

You are the CEO of a 312-bed hospital, which is prominent in its community.

The only competition you have in your market area is a surgery center and a short-stay hospital. Both facilities are owned by physicians and highly profitable. All these physicians, mostly surgeons, are also on your medical staff and split their business between their owned facilities and your hospital.

One of the investors is an orthopedist, Dr. C., who is extremely aggressive with his surgeries. The joke about him is that you should not see him for a sore throat, as you will end up with knee surgery. He is in his late thirties, drives a very expensive car, and lives in a 20,000-square-foot house with its own ballroom. His father is also a practicing orthopedist in your community and is highly respected. The father has always been rather conservative in his clinical practice and has served in many volunteer roles in the community and at your hospital.

Recently, a few of your physicians have approached you with their concerns that the younger orthopedist has been performing unnecessary surgeries. Two of these doctors are also orthopedists, but in a competing group of surgeons. Given the concerns, your chief medical officer (CMO)

has spoken with Dr. C. He defended himself by pointing to his recent training, his excellent outcomes, and the professional jealousy that other physicians exhibit toward him. Your CMO did not feel that her conversation had any effect on Dr. C., but you noticed that Dr. C. began to do more of his surgeries in the physician-owned facilities. Those facilities, however, are not equipped to perform total joints and more complicated spinal surgeries.

In addition, Dr. C. will not take Medicaid and most Medicare cases to the physician-owned locations.