DWL: A number of factors, including our expansion into developmental biology, the continued interest in women’s health and research, a new focus on gender-based medicine and women-specific issues, and the growing success of the Research Institute to attract additional researchers. There’s currently a need for research space, given our projected programs in areas such a women’s cancers, autoimmune diseases and other reproductive sciences.

DWL: In February 2001, because of aging demographics in the area—the childbearing group of women is declining and the elderly are a growing population base—and the medical malpractice issues affecting obstetrics, Magee’s board and management went through a strategic planning process to determine, "What do we need to be in order to be successful in the future in this particular market?" Several things came out of that. One was that we needed to look at a broader definition of women’s health, and that led into an expansion into gender-based programs. We knew that we could not rely solely on obstetrics, neonatology and women’s cancers, which are our predominant line of business. We wanted to redefine our mission—that’s why we’re expanding into programs such as digestive disorders, continence and pelvic floor disorders, general medicine, autoimmune diseases, bariatrics, heart disease—which are all recognized as either presenting differently or more frequently, or having different outcomes in women.

DWL: Loss of profitability, both for independent physicians where it’s their bottom line and employed physicians where it affects their overall performance. I know for sure that two of our employed physicians have left OB to become GYN-only because of the malpractice issue and I know that there are others who are contemplating that. A lot of them are waiting to see what happens during the first part of the year.

DWL: It hasn’t really had an impact to-date. There’s a change in scheduling so that physicians that are doing OBs are doing more of it and other physicians are picking up more of their GYN work. I think that the issue is not so much here in the heart of Allegheny County, where there’s a sufficient supply of physicians. My concern gets into Fayette, Washington and Westmoreland counties where, if some of those physicians would decide to leave obstetrics, it could significantly impact the population and their access to care. Some of those physicians use us as a referral source for high-risk obstetrics or for complicated deliveries. Our physicians would probably need to be picking up those patients in those outlying areas because access to care is one of our primary mission components. The large OB group that was at Uniontown Hospital in Fayette County has stopped doing OB and I don’t think that there are any other OB/GYNs that are based solely in Fayette County.

DWL: Yes. As residents that are leaving their residency program look at the malpractice issue in this area, other states that have put limits on jury awards appear to be more attractive. Two of our former residents either have, or are planning to leave Pa. Most of the people that are looking to be recruited here are looking to come on as part of an existing group that is probably aligned with a hospital and so is not as concerned if someone else is paying for their malpractice premium. It will have an effect on the ability to get physicians to come into this area and on long-term access to care. A lot of physicians in western Pa. are owned by hospitals, insurance companies, or are part of the faculty, so some of the direct impact on these physicians is just beginning to be felt. The hospitals, if they are employing the physicians, are feeling the impact of the malpractice rates. Physicians who are independent are finding that they can’t bring on another partner, and some of them have decided not to do OB, while others are talking about not doing OB.

DWL: We have about 170 physicians in the active staff category—OB/GYNs that are doing obstetrics. About 30 of those are faculty members of the University of Pittsburgh Physicians, and about 25 are employed by Magee or UPMC. The rest would be either aligned with another hospital, Highmark, or are independent. There are fewer and fewer independent OB/GYNs in this market and I think the high cost of malpractice insurance is the trend that’s making this discipline move toward employment faster than some of the other disciplines.

DWL: We’re trying to focus, given these external dynamics, on what Magee has to do to continue to evolve so that it is relevant to the market and successful. Our service expansion into the new areas that I mentioned allows us to serve women and to diversify from strictly the OB/GYN, neonatal ICU and women’s cancers. Those are still our core businesses and we are still dedicated to them. But we’re expanding to offer services relevant to women and also to become financially diversified from depending only on OB/GYN revenues. We’re having different kind of admissions coming from primary care physicians, from GI specialists, rheumatologists, that we didn’t have before. OB/GYN, neonatal ICU and women’s cancers will still be the main focal point of Magee, both in terms of activity and dollars. But gender-based medicine is increasing and our biggest growth in volume over the past year has come from gender-based medicine. The expansion into those areas has helped our profitability.

We also are putting a big focus on creating a preferred work environment because another major issue that hospitals are facing is being able to recruit and retain a qualified workforce. We’ve created an employee council to have the voice of the staff in setting goals.

We are reaffirming the close link between research and clinical care, being able to translate science in the Research Institute into practice. We’re getting physicians more involved in studies so that they can help recruit from their practices to get more dialogue going between the academic research side and the clinical care delivery side. It’s easier to recruit and attract national names for clinical care if they have the research facilities and colleagues available. The more success you get, the larger patient base for researchers to pull from.

Also, since July last year, the front door into our hospital became broadened: our emergency room is now staffed with full-time ER physicians. Before that, it was primarily staffed by the OB/GYN faculty and residents, but by moving to full-time ER physicians, it allows us to be a full-service, non-trauma emergency department. So, when all those other emergency rooms are full in the area, Magee can see anybody, men and women alike. We’ve seen a tremendous growth in the emergency room since that change. The other thing that we did was add 24/7 hospitalist intensivists—critical care medicine-trained physicians managing our ICU who are also available to take admissions from the ED, from someone in the community and also work with anyone in the house. These physicians are part of the critical care medicine department at UPMC. PND: What impact has your relationship with UPMC had on your ability to weather the financial challenges faced by western Pa. hospitals?