Straub cuts reflect squeeze on healthcare

By Robbie Dingeman
Advertiser Health Writer

Straub Clinic & Hospital's decision to eliminate four departments as part of a cost-cutting and restructuring move reflects a leaner business environment facing the healthcare industry, experts said.

Rick Wade, senior vice president for the American Hospital Association, said rising operating expenses and insurance costs and declining reimbursements from the federal government are prompting hospitals to consider ways to trim expenses.

"Doctors feel very much under siege," Wade said.

Straub last week told its doctors that it is eliminating its pediatrics and obstetrics/gynecology departments at its King Street facility and all occupational medicine and urogynecology departments. The 13 affected doctors would be offered the opportunity to continue to practice at the hospital and rent space from Straub.

Wade said there is a nationwide trend toward fewer hospitals directly employing physicians, who are increasingly in private practice. "There're not a lot of places where the physicians are employed there," he said.

Wade said the changes can work for both sides, in giving the doctors more of a chance to determine their own practice, while reducing costs for the hospital.

The transition can be smooth, he said. "If it's done right, the patients won't notice anything."

A former president of the Hawai'i Medical Association, Dr. Philip Hellreich, said the Straub announcement reflects the financial struggles facing doctors and hospitals today.

Hellreich, a dermatologist, said he has seen his costs rise 15 percent to 25 percent in the past two years. He said that means he is taking home about 40 percent less than he was four years ago. "It reaches a point where you just can't do it anymore."

Hellreich, who now serves as legislative chairman of the doctors' group, has been in private practice since 1972. He said Straub directly employs a larger percentage of doctors than many other local hospitals.

Hellreich said the changes are a symptom of the times. "It's a major problem not only in Hawai'i, but everywhere," he said.

Other large hospitals have long employed a relatively small number of doctors. For example, the substantial majority of physicians at The Queen's Medical Center are not directly employed by the medical center but have privileges to practice at Queen's, a hospital spokeswoman said.

Dr. Robert Schulz, plastic surgeon with Straub for 27 years, said he is hearing patients ask how the changes at Straub will affect them.

Schulz, who is not directly affected by the elimination of departments at Straub, serves as chairman of the hospital's physicians advisory group. He said he believes that the quality of healthcare will be maintained even under a changed system with fewer doctors directly employed there.

Schulz has been with the hospital since it was a physician-owned hospital. He sees the shift toward specializing in adult care as a logical one, especially since the merger with Kapi'olani Women's and Children's Medical Center.

Reach Robbie Dingeman at rdingeman@honoluluadvertiser.com or 535-2429.