Olympic Medical Center agreed to a contract with Sound Physicians on June 17, despite criticism from many emergency department doctors and staff.

Earlier, the hospital had said that it would not renew the contract with Peninsula Emergency Services, Inc. (PESI), which expires at the end of the month, and instead would hire Sound Physicians to provide emergency department physicians as of July 1.

OMC CEO Darryl Wolfe said in a meeting the contract provision allows the hospital to leave the contract six months after the first year if it finds a better partnership.

“The high-level point of the agreement [with Sound Physicians] is that it starts out as a three-year term. However, there is a six-month out after the first year,” Wolfe said.

“I also wanted to reiterate to the crowd that our goal is not to ‘get married’ today, but our goal is to look at this as a bridge to find a long-term partner.

“That could be Sound Physicians, that could be others, we don’t know, but we needed to execute on this sooner rather than later.”

The agreement will cost $106,905 per month to provide physicians, totaling $1.28 million a year.

The impetus for this sudden change in emergency service providers is due primarily to ongoing investigations against an emergency department doctor who works with PESI, Wolfe has said.

“Things that we have been informed about that are unfortunately influencing this decision a great deal. I wish I could say more,” said John Nutter, OMC board chair, on Friday.

The hospital initially announced the decision in a June 9 press release and again at a meeting where about 30 doctors, nurses and staff, and community members objected.

One complaint was that the decision had been made so swiftly and without any feedback from the doctors involved.

No mention of the change was listed on recent meeting agendas. Board meeting minutes have not been updated on the OMC board website (olympicmedical.org/about-us/board-information) since April 6.

“I have received more constituent feedback in the past three days than I have in my entire 13 years being on this board,” Nutter said.

“There are a lot of strong feelings one way or another, and probably my biggest frustration continues to be that we cannot completely tell our side of the story yet because of ongoing investigations at multiple levels,” he added.

Wolfe echoed Nutter’s comments.

“The best analogy that I have come up with is like being tied to a chair with your hands behind your back and being punched in the face and you can’t defend yourself,” Wolfe said.

One of the speakers at the meeting asked how the board could choose Sound Physicians with an F rating from the Better Business Bureau.

Wolfe did not answer then, but in a statement provided to the Peninsula Daily News on Thursday, June 16, he said: “The Better Business Bureau rating for Sound Physicians emergency department services was not part of our determination to partner with the group.”

“We considered, very specifically, germane references with recent experience in emergency medicine that we could validate, instead of generalized ratings,” he said.

“Sound Physicians comes highly recommended for their emergency medical services specifically,” Wolfe said.

“We inquired with hospital peers who utilize Sound Physicians, including a favorable reference from Samaritan Healthcare, who has three years of experience with Sound Physicians as an emergency medicine provider.”

At the meeting on June 17, Wolfe, along with other board members, lamented the timing and quickness of this decision as well.

“I wish we weren’t here. I wish the timing were different. But the situation is unavoidable, and all I can say is this is no longer about just the ER and just an individual provider, this is about the whole organization,” Wolfe said.

“This is not how we want to do things, but our hand has been forced and the risk has risen to a level where we have no choice, and I wish we weren’t here.

“There are actually two issues here. One is a personnel issue, which will require sorting out by others. The second is a management systems issue. A serious breakdown of a management system has occurred, thus precipitating this action,” commissioner Tom Oblak said.

“Having said that, I want all staff to know they are valued and appreciated, and it is our desire that you remain with OMC and continue what you’re doing providing excellence in health care,” Oblak said.

Doctors and emergency department providers who currently work at OMC through PESI have been asked to apply with Sound Physicians to keep their jobs at OMC. The majority of providers have indicated they will not leave PESI to join Sound Physicians and will leave OMC altogether, according to an anonymous letter said to be from emergency department nurses.

“We understand the timing is not ideal, and we will continue to look and survey the market to find the best long-term partner for OMC,” Wolfe said.

Follow-up

OMC administration promised that the hospital’s emergency department will be fully staffed by credentialed emergency services providers come July 1.

Some have their doubts that the change to Sound Physicians can be done that quickly.

“They said that everything was all set with Sound Physicians and that they would be able to staff the emergency department come July 1 … I bought it up at the meeting on June 15 that this was not possible and they said they were assured by Sound Physicians it would,” said Dr. Frank Rosenbloom, a hospitalist with OMC who does not work in the emergency department.

“It’s wishful thinking,” Rosenbloom said.

OMC announced in a press release on June 24 that provider shifts have filled up through July and shifts will continue to be filled through the summer, as recruiting continues, quashing rumors that the new emergency department services provider, Sound Physicians, had backed out of its contract due to its inability to staff the emergency department.

“Many of the current ED providers are being offered the opportunity to continue working in OMC’s Emergency Department. They have been offered locums tenens [temporary] positions. Incumbent providers will have the opportunity to continue working in OMC’s Emergency Department while reviewing the option of signing a long-term employment contract with Sound Physicians,” reads the release.

Emergency Department Director Dr. Lusana Schutz said that as of June 23 none of the ED providers had received contract proposals to consider.

The majority of the doctors currently working in the emergency department were formerly with Peninsula Emergency Services, Inc. (PESI) the emergency services provider that OMC had been with for nearly 35 years and which was formed to provide doctors for OMC’s emergency room.

“PESI was started in the mid-1980s by local physicians who were employed by a large emergency department staffing group, at that time called Northwest Emergency Physicians (NEP), now TeamHealth,” said Dr. James Wallace, executive director for PESI.

“Both they and the hospital were unhappy with the arrangement-high cost to OMC, low pay to the doctors, and not much control over schedule, so they bought out the contract from NEP and started PESI, as a simple, locally-run company with the sole focus on recruiting and retaining emergency physicians to work at OMC,” he added.

OMC did the billing and other administrative services, Wallace said in the email; these are services that OMC officials have said will be done by Sound Physicians.

Due to the ending of its relationship and the commitment of the majority of doctors to remain with PESI rather than apply to Sound Physicians, the company has elected to dissolve.

“As PESI exists only for the purpose of staffing the OMC ED, and no longer has the contract to carry out that mission, it will be dissolved at the end of this month,” Wallace said.

OMC announced to the medical community it would end its relationship with PESI on June 8. That sent shock waves through the hospital, some said, because the doctors had not been told there was any likelihood of this happening.

“Up until May, things didn’t seem like they would be any different. In March, we met with Darryl [Wolfe] and said ‘Hey we’re up for renewal’ and he said, ‘Yeah, no problem, we will work out the finer details,’” Schutz said.

“In April, an allegation arose against one of the emergency medicine providers that contracts with our group (PESI), at that time it was brought to our attention by the administration that the allegation has been made and they asked us to remove him from the schedule which we did promptly and we followed their lead in the things they needed to do with the investigation because they made it very clear that they were in charge of the investigation,” Schutz said.

On May 30, PESI members said that their impression was that they had reached a verbal agreement with Wolfe for a two-year contract renewal, and they knew no differently until June 8.

“The reasons they provided for urgently removing PESI do not seem to justify such a rushed decision, leaving not nearly enough time for a transition of this magnitude,” Schutz said.

OMC CEO Darryl Wolfe has said that it was the investigation that led to the sudden change in emergency department services at OMC.

“We cannot discuss the criminal cases in detail as they are open and active cases. However, these criminal investigations are what initially prompted the regulatory visits to OMC. There was sufficient concern resulting from the regulatory agency investigations, that a change in medical group leadership needed to be made imminently,” Wolfe said.

Wolfe said the provider being investigated is not being recruited by Sound Physicians.

The decision to make the change from PESI to Sound Physicians was first discussed in a public forum June 15.

According to OMC Board Chair John Nutter, there were one-to-one meetings with board members and Wolfe, where the action was discussed.

Wolfe later explained that the board did not need to go through a traditional bid process to make this change and explained that there will be regular reviews of the contract with Sound Physicians.

“OMC needed to make a change on a shortened timeframe due to circumstances involved. OMC is not legally required to seek bids for services contracts,” Wolfe said.

“We will be reviewing Sound’s performance in the next 12 months and at that time, we will decide whether to continue with Sound as our partner or proceed with giving 180-day notice in order to adjust the course with a new partner as deemed necessary and prudent.”