By MARY JO LAYTON
Staff Writer

St. Joseph's Regional Medical Center is in final negotiations with a company to run its emergency department, which for the first time would offer doctors pay incentives for productivity, hospital officials said Tuesday.

As part of a series of cost-saving measures, the financially struggling hospital in Paterson plans to hire PhyAmerica Physician Services Inc., a North Carolina-based company that operates 220 emergency rooms and employs 3,000 physicians nationwide.

Under the contract, expected to be in place in January, PhyAmerica would manage billing in the emergency room, patient flow, and scheduling of staff at one of the largest emergency rooms in the state. Patient satisfaction and physician productivity would be closely monitored.

"If you work hard, you will have the opportunity to make more money," said Dr. Mark Rosenberg, president of PhyAmerica.

"In private practice and in real life, whether it's a Wal-Mart or anything else, the more people you see, the more sales you make, the more money you have," said Rosenberg, who will leave the emergency department at St. Clare's Hospital in Denville to work in Paterson.

New management of the emergency department, which treats 67,000 patients annually, coincides with the departure of Dr. James Pruden, who ran the emergency room for 17 years.

Pruden, who will remain on staff, said he welcomed the chance to spend more time with patients. He said he would have more time to pursue medical ventures outside the hospital.

Pruden serves on the governor's Bioterrorism Preparedness Task Force, a group of search and rescue specialists. He also is chairman of the New Jersey Emergency Medical Services Council.

"I went to medical school to take care of patients," Pruden said. "As a chairman, the position requires a lot more attention to paperwork, process, meetings, and guidelines. My reward is seeing my patients."

St. Joseph's 26 emergency room physicians are expected to agree to a contract to work for PhyAmerica, hospital officials said. Representatives from PhyAmerica were at the hospital Friday, detailing the salary structure and other aspects of the contract.

"My sense is that most physicians will stay," Pruden said.

However, some patient advocates expressed concern over pay incentives linked to productivity.

"Certainly in the managed care area, there has been a lot of concern about doctors forced to see more patients," said Dr. Sidney Wolfe, executive director of Public Citizen Health Research Group, a patient advocacy group in Washington, D.C.

Wolfe argued that doctors may have many complicated cases in an emergency room. He wondered: Would they lose incentives if they had too many time-consuming, complicated cases?

"The whole assembly line view of medicine is a dangerous one," he said.

As more hospitals grapple with financial problems in this era of managed care, they are turning to consulting companies to take over billing and to manage other operations.

St. Joseph's, which laid off 120 employees in October and eliminated 60 unfilled positions, has hired a Nashville, Tenn.-based company to collect payments, particularly from managed care companies that delay awards. Staff cuts were necessary, officials said, to offset operating losses of up to $19 million.

"We've got a good group of physicians who are there now," said St. Joseph's CEO Patrick Wardell.

"In terms of keeping the organization focused on patient waits and turnover time and making sure physicians are following up with patients, this can only be a plus for us," he said.

In New Jersey, a handful of hospitals, including St. Clare's, have hired private companies to manage their emergency rooms.

Since hiring PhyAmerica three years ago, St. Clare's has seen patient satisfaction increase dramatically, said Clark Walker, vice president of new business and development for PhyAmerica. In surveys of patients assessing their care, 94 percent reported being satisfied, up from 64 percent three years ago, before PhyAmerica was hired, Walker said.

Officials at the Denville hospital did not return phone calls. However, Walker said the hospital is expected to renew the three-year contract in the next several weeks.

Walker said most doctors, once they adapt, find his system more lucrative. Rosenberg said doctors at St. Clare's saw salary increases of 15 percent on average over the three years of the contract.

"It eliminates doctors from the blue-collar mentality," Walker said. "They don't care if they see one patient in 10 hours. They're paid the same as everyone else. When you put doctors in the mind-set of an incentive structure, it then makes them feel like it's their own practice. Some work harder."

Concerns that doctors may be rushing patients through treatment to obtain pay bonuses are unfounded, company officials said.

The American College of Emergency Room Physicians recommends that doctors see fewer than three patients per hour. According to Rosenberg, the company's goal is for doctors to treat up to 2.3 patients per hour.

Bergen Record

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