JUST THE FACTS
The Emory Clinic*
Physicians . . . . . . . . . . . . . .671
Primary and multispecialty care centers:
*as of 2002
More than 50 years of making people healthy
Randolph Thrower has been a patient at the The Emory Clinic (TEC) for 50 years, for much of that time as a patient of Bruce Logue, his Emory College classmate (class of 1934). "I saw him for all my health problems, real and imagined," says Thrower.
An attorney with Sutherland Asbill & Brennan, Thrower also played a key role in the clinic's beginnings, penning the clinic's original partnership agreement. "They told me they wanted to model it after the clinic at Duke, which didn't actually have a partnership agreement at the time," says Thrower. "I know that because Duke came to me in the 1970s and asked me to write them one too. So it was sort of a transfusion back and forth."
Thrower and his firm have played a role in TEC's legal needs for the past half century, filing tax returns, setting up Clifton Casualty for self-insurance, and assisting with the clinic's incorporation in 1993. At 89, Thrower today sees clinic doctor David Roberts and remains feisty. "I sometimes carry a cane now. I don't really need it," he explains, "but it tends to make people open doors for me."
In this issueFrom the director / Letters
Burden of proof
Smallpox, big risks?
Nor did founders anticipate the political firestorm that would erupt on the birth of this clinic, with faculty dismissals, lawsuits, and public airings of dispute. Indeed, Emory officials would come to realize just how much they wanted their budding clinic to survive only when battered by attempts to keep it from ever getting off the ground.
What Emory has learned from its clinic's significant successes and sometimes tumultuous history is that whither goes the clinic, so go the medical school, the hospitals, and the university itself. And just as in those early days, the clinic's survival depends on the unified vision of those who understand its value and are willing to work on its behalf.
Today, as the clinic continues to reshape itself, it is breaking old molds and growing new wings. It is transforming its business practices to perpetuate an essential founding quality that has remained constant -- working at the leading edge of medicine to bring patients the best care they can get.
"People today don't realize what it was like to start the clinic," says former clinic director Garland Perdue, who joined the clinic in his 20s after finishing medical school and house staff training at Emory. "We wanted to build something lasting for the medical school."
The clinic's earliest beginnings date to 1937, when Coca-Cola leader and philanthropist Robert W. Woodruff gave Emory $50,000 to start the Winship Clinic for Neoplastic Diseases. It was named for Woodruff's maternal grandfather, who like his own mother, had died of cancer. ("Don't call it a 'cancer' clinic or no one will come to it," he advised, the word cancer at that time considered a death sentence.)
To direct their new clinic, Woodruff and university trustee Robert Mizell traveled to Memorial Hospital in New York and recruited a young Alabama-born physician named Elliott Scarborough.
It proved to be a good choice. Scarborough had optimism, talent, dedication, and charm that won him widespread admiration from his fellow physicians and Robert Woodruff alike. ("He could sell you the Brooklyn Bridge," Perdue remembers fondly.)
Scarborough's powers of persuasion would come in handy in years to come, when he would use them to coax Woodruff into giving money to start The Emory Clinic.
Woodruff's interest in health care only grew stronger as time passed, and he began to see untapped potential in Emory's tiny and struggling medical school.
Created somewhat instantly in 1915 as a freeze-dried amalgam of the pre-existing medical schools in Atlanta, the school was still fledgling and impoverished by the mid 1940s, with only two paid faculty members and a heavy reliance on volunteers for teaching. Its continued accreditation was in jeopardy, and Oglethorpe University, with a nascent medical school of it own, was nipping at its heels, vying for rights to training space at Grady Hospital. Without action, Emory's school was in real danger of fading to extinction, like so many medical schools before it, a specter that did not bode well for Emory University as a whole, or for the health care needs of Atlanta and the region.
Emory wanted not just to save its school but to position it for greatness and so turned to Woodruff for help. He gave the nod for Emory to recruit paid medical faculty members, as other schools around the country were doing, with the tacit understanding that he would foot the bill.
As the school began to grow, so did its deficits. Each year, university President Goodrich White requested help from the Emily and Ernest Woodruff Foundation to deal with the red ink in medicine. And each year, to everyone's relief, Woodruff covered the shortfall. By the early 1950s, the total had grown to $250,000 a year.
This trend could not continue indefinitely. But Woodruff and officials at Emory had an idea that might work. Other medical schools were having similar financial difficulties, and some were starting faculty clinics to help pay their way. Woodruff sent Scarborough and Mizell and health services administrator Boisfeuillet Jones on site visits to see if they could find a good model for Emory.
They were only too happy to go, let loose like kids in a candy store to pick their favorite flavor. They reported back on the models they saw: At one end of the spectrum, a medical school ran its clinic, dispensing its doctors a salary (Scarborough rather liked this model). At the other extreme, a clinic ran itself and paid rent to the school for facilities (Woodruff's preference). Emory's officials carefully considered the right blend for Emory. The chief concern of the moment, however, was more basic: Woodruff still had to be convinced, and he had one persistent question. Could the clinic make money?
Scarborough convinced him that it could. At an anniversary party for surgery chair Daniel Elkin, Scarborough seated his friend Alton Ochsner strategically next to Woodruff and pointedly asked him about profits at the Ochsner Clinic in New Orleans. On hearing the answer, Woodruff turned to Scarborough and said, "Go ahead and build your clinic." He would give the university $1 million for a building.
In January 1953, 17 doctors signed a for-profit partnership agreement, and the clinic was officially open for business, functioning out of offices in Emory Hospital till the new building across the street was ready for occupancy. The doctors now had a business structure to keep records of income and expenses and a tally of patients and procedures. With proceeds, the clinic would pay "fair and reasonable" rent to the university, the money to be used for the medical school. The clinic would support the medical school in its bid for national renown and put an end to the medical school's deficit. Clinic doctors would spend at least 25% of their time teaching students and residents, and they would cover their own income through the clinic. Every partner also would make an annual voluntary contribution to the medical school.
With money and plans in hand, the path seemed clear for smooth sailing ahead. But the university would soon learn that forming a business plan for the clinic and getting the money for a building had been the easy part. In 19561957, it would face an onslaught of opposition that put the clinic's future in peril.
Not since the late 1800s, when Atlanta doctors from competing medical schools came to blows over rights to the use of facilities, had the city seen such controversy as that touched off by creation of The Emory Clinic.
Emory was accused variously of practicing "socialized" and "corporate" medicine. The American Medical Association had taken a firm stand against the latter, with its Culpepper Resolution of 1954, and corporate medicine had been ruled illegal in the state of Georgia. The Medical Association of Georgia (MAG) hired attorneys and worried that Emory would exert too much control over its doctors or that Emory's clinic would give its faculty an unfair competitive advantage over non-Emory doctors. The latter also bristled at the idea of being denied future access to Emory Hospital.
As if these things weren't enough, four of Emory's own faculty members (including the chairs of medicine, surgery, and gyn-ob) felt their roles in the clinic were insufficiently powerful and publicly accused Emory of preparing to abandon Grady Hospital in favor of its Druid Hills campus. The doctors made plans to set up their own enterprise at Grady, and one gave newspaper interviews, referring to the university as a "dictator."
Medical school Dean Arthur Richardson took the courageous step of relieving these powerful faculty of their positions of authority, a move promptly questioned by the Fulton County Medical Society. University President Goodrich White took a full-page ad in the newspaper to explain Emory's position (an end-piece to a series of more than 50 articles about the medical dispute that had appeared in the paper for several months prior). White also dispatched the eloquent and persuasive Boisfeuillet Jones to explain the clinic to the local medical organizations and allay their fears and concerns. Jones managed to convinced them that Emory's clinic practice was not corporate medicine, and in 1957 MAG approved of the university-clinic relationship as conforming to legal and ethical principles.
For their part, doctors in the clinic made it clear that they had no intention of stealing their colleagues' patients and would accept patients by referral only, a practice abandoned only in the past decade. (For its first 40-odd years of practice, the clinic held religiously to the referral-only policy, says Bruce Logue, one of the 17 original clinic partners. "One time, the first lady of Georgia was brought to the clinic because she had fallen down while shopping at Rich's. We treated her, but when the governor asked for an appointment for himself, we told him he needed a referral. I never saw him after that.")
Throughout the storm, the university and its medical school held firm and steady, compelled by the conviction that they were staking their claim as the steward of 100 years of medical education in Atlanta. And the clinic would serve not just medical education but sick people throughout the region and beyond. Emory one day would be known as a mecca for healing and discovery, and this would be made possible in part through the talents and skills‹and earnings‹of the doctors of The Emory Clinic.
Once Emory had fended off the clinic's detractors, a whole new set of tensions arose as doctors tried to weigh demands of teaching and research against demands of patient care. Advocates of the different missions were in constant push and pull, vying for acknowledgment each from the other, guarding against infringements that would damage one to the detriment of all. It was a constant balancing act, and nowhere was the clash more obvious than in the clinic.
Clinic doctors, for example, had a practice to maintain, while the medical dean had his own mandate to build a teaching program second to none. Somehow, both agendas managed to get done, but from the physicians' perspective, not without a little teaching on their part of the medical dean himself."
Arthur [Richardson] asked me to take a year off from my practice to teach at Grady," says retired gyn-ob Armand Hendee. "I had to explain that if I took a year off, I wouldn't have a practice to return to."
Likewise, when clinicians wanted to recruit doctors to expand a clinical service of particular excellence, in heart care, for example, the dean sometimes stubbornly resisted, arguing that "we've already taught mitral stenosis this month." ("I told him, 'If we didn't have enough doctors to take referrals, doctors would stop referring patients to us,'" says Charles Hatcher, who himself helped plant Emory's flag in heart care and was elected unanimously as clinic director in 1976.)
But the medical dean's single-mindedness had its purpose too. Far from abandoning Grady Hospital, as critics had predicted would happen when the clinic was created, Richardson poured resources into Grady and cemented its role as a cornerstone for training. Richardson also had a nose for good teachers. To lead the all-important department of medicine, he appointed 35-year-old cardiologist Willis Hurst, who would eventually write the "bible" used to teach cardiology throughout the country. Hurst's mentor, Bruce Logue, started Emory's residency in cardiology and says he and Hurst taught people from all over. "We seeded the South and the world with our fellows. Willis trained even more people than I did."
Teaching in other specialties blossomed as well. By the end of Richardson's 23-year tenure as dean in 1979, the word had gotten out about medical teaching at Emory: Undergraduate students could get more patient experience at Grady than trainees at many other places who had completed an entire residency. Emory alums were a hot item, as reflected by the school's burgeoning flow of applications. Teaching at Emory had arrived on the national scene.
Meanwhile, Emory's clinicians were garnering attention too. The buzz about Emory's teaching was rivaled by the growing reputation of its innovative doctors. From heart and eye care to orthopaedics and cancer, they were blazing trails and attracting patients from near and far.
Clinic revenues were growing steadily too, as were clinic contributions to the medical school.
From 1956 to 1966, clinic contributions increased from $114,039 to $488,843. By 1975, the clinic had a professional staff of 211 and 230,000 patient visits a year, and its contribution to the medical school had swelled to $2.3 million.
As the contributions grew (eventually reaching some $20 million a year), there was also a growing sense of disconnect between the clinic and the school, a feeling by clinic doctors that their work was sometimes taken for granted. ("We'd make the money," says Perdue, "and the dean would give it all to the nonclinical departments.") Faculty whose time was consumed by patient care also had trouble getting recognized academically. "There were several outstanding clinicians both in the clinic and at Grady who I had a hard time getting promoted," says Hatcher. "The medical school said, 'Where are their publications?' These people were taking care of so many patients that they didn't have time to publish."
In the mid 1980s, when the medical school decided to throw its hat in the ring to make Emory a powerhouse in research, the school came calling to the clinic for yet more funds, and the clinical divide only widened.
"It was a time when the clinic mission was definitely out of step with the academic mission," says medicine chair Wayne Alexander. "There was a feeling of 'we do this and they do that.'"
The school began hiring more faculty for the clinical departments based on their research credentials. These were persons who spent less and less time in the clinic and whose market niche for patient numbers was limited. Their names swelled the clinic roster, while their clinical earnings were negligible. They might well be a shining star on the academic side, bringing in millions of dollars in grants, but from a business perspective they were a drag on the clinic's bottom line.
Those holding down the fort in patient care perceived their own light eclipsed and their future prospects diminished, and some departed Emory. "We were left in some cases to backfilling," says surgery chair William Wood.
No one was buffeted more by this polarization than department chairs, who in most cases were also section heads in the clinic. "It was like the Hatfields and McCoys," says dermatology chair Wright Caughman. "You'd fix one problem in one mission, and it created a new problem in another. People from different missions would say, 'I don't care, it's not my problem.' But they had to care. It was everybody's problem."
Administrators took steps to resolve the rifts, for one thing creating separate tracks for promotion, including a clinical track under the clinic's jurisdiction, with the medical school assuming tenure responsibility for faculty on track for teaching or research.
But as in the clinic's early days, it was adversity threatening the clinic's continued existence, this time from the health care environment, that finally focused everyone's gaze on some broad-based solution.
When the clinic was created as a for-profit partnership, Scarborough, who was director from 1956 until his death from cancer in 1966, pronounced that partners' income would be a maximum of $25,000 a year, depending on income the clinic brought in. ("Don't expect them to make a lot of money," Isabelle Scarborough told a gathering of partner wives.)
But over the decades, as medicine came into its own and doctors could set their own fees and collect most of what they charged, clinic partners came to make a great deal of money indeed.
When the health care market changed in the late 1980s and 1990s, however, and reimbursements dwindled, the clinic began having trouble meeting expenses. And predictions for health care were for conditions only to worsen.
The partnership arrangement that had served the clinic and Emory so well for so many years now seemed like a liability. One problem, according to Emory Healthcare CFO Ronnie Jowers, was that all clinic proceeds were distributed each year to partners, meaning that the clinic accumulated no reserves for things like capital improvement, investment, recruitment, and regeneration. Some drastic reorganization was needed.
In January 1994, the clinic's 40-year-old partnership was dissolved, and the clinic became a nonprofit corporation, under much the same structure as Emory's two hospitals. Its financial obligation to the medical school (the "dean's tax," also known as the academic enrichment fund) was split with the hospitals, reducing the clinic's portion by two-thirds. Also reduced dramatically were earnings by clinic doctors.
There were other changes as well. The clinic's governing board, which for years had consisted solely of sections heads, came to be seen as too insular. In 1998, it was reconfigured and expanded to include several nonphysician public members of the board that governs the entire Woodruff Health Sciences Center (WHSC). ("This was hard for the section heads," says Wright Caughman, himself a section head today, "but something that needed to be done.") In addition, under leadership of WHSC Director Michael Johns, the clinic itself, as part of Emory Healthcare, was brought in formally under the WHSC's jurisdiction, with access to the benefits of philanthropy and improved bond ratings that only the WHSC could confer. "Bringing together the many parts of our clinical system was critical to our success in an increasingly competitive marketplace," says Johns. "And it was critical to the synergy among our care, research, and teaching missions, which are what define and distinguish us."
Today, the clinic transformation continues as it traverses the changing landscape in health care. It's not easy in the rocky terrain of rising costs and falling income. ("You have to be on top of your game in both world-class medicine and business," says Emory Healthcare President and CEO John Fox.)
And there's no energy to spare on an us-versus-them mentality. "You can't do world-class care unless it's integrated with research," says Alexander, "and leadership views both as essential."
Chairs are now expected to be more ambidextrous. And mechanisms have been put in place to maintain more accountability between the clinic and medical school, to reflect how each depends on the other.
For example, Johns started a clinic section head working committee in recent years to ensure ongoing dialogue between the clinic and chairs. "When the clinic was brought into the health sciences center and the board was changed, some of the department chairs felt left behind," says committee facilitator Gil Grossman, who directs professional affairs in the clinic. "Johns and [Clinic Director Rein] Saral wanted to change that." Committee members include Alexander (medicine), William Wood (surgery), William Casarella (radiology), James Zaidan (anesthesiology), Jonathan Simons (Winship Cancer Institute), Fray Marshall (urology), Caughman (dermatology), and Doug Morris (heart center). They meet every other Monday with Saral and clinic COO Don Brunn. "The committee's activities have become increasingly important to the clinic," says Grossman. "They give good feedback to Brunn and Saral."
In addition, medical dean Thomas Lawley, a "white coat" administrator and dermatologist who sees clinic patients on Tuesday mornings, has been given a new oversight role in the clinic.
"This recognizes the fact that the medical school now has more of a direct financial stake in the clinic's financial performance," says Emory Healthcare CFO Jowers. "More than half of the clinic's contribution to the school's academic enrichment fund, about $3 million, is at risk and may have to be returned to the clinic if clinic income fails to meet defined expectations."
And what are the clinic's financial prospects?
Grossman says there is still room for improvement.
"The clinic originally was set up more for the convenience of the partners than for patients, and some of those signs still linger. It's still hard for patients to get an appointment in some sections, but we're making a huge effort to change. We're making good progress in primary care and radiology. We've cut the fat in our operations, and we're reducing our overhead." And, he adds, "If our doctors each could see one or two more patients a day, we'd be in clover."
"What we have to do now," says Fox, "is to stake a bigger claim in our own back yard, particularly in areas where we already have great strength, such as heart [ranked eighth in the nation], as well as cancer and orthopaedics." He adds, "Despite all the challenges in health care today, the clinic and the rest of Emory Healthcare must strive to excel in all areas of operational performance to advance our leadership position."
Along with others, Grossman expresses confidence in the management skills of Fox as well as Brunn and his team, who have made it easy for doctors to understand how their actions affect the clinic's bottom line. He worries about health care in general but is optimistic about Emory in particular.
So is Saral: "We can focus on our frustrations," he says, "but when you step back and look at the bigger picture, you can see that Emory is a much more powerful institution now and that we're strong in all three of our missions."
Indeed, the school that had only two faculty members (counting the dean) in the mid 1940s now has more than 1,400 in clinical and basic sciences departments and last year garnered almost $230 million in research awards.
"What really distinguishes our care is our academic and research focus. Combining these elements and playing off their synergy is critical to our success," says Don Brunn. "We're working to make this clinic known by patients and doctors as the best-run academic practice in the country. The best place to practice medicine for our physicians and the best place to work for our staff, creating an outstanding patient experience."
Fifty years out, that looks like a golden opportunity.
Copyright © Emory University, 2003. All Rights Reserved.
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Web version by Jaime Henriquez.