I’m starting to think that the practice of medicine in Pennsylvania is happening in parallel, but unrelated, universes. In one universe,  are Pennsylvania’s hospitals. The majority have soundly managed their business and developed practice areas in growth markets and, according to this morning’s Philadelphia Inquirer, are averaging 4.8% profits in the last year. In the other universe, are Pennsylvania’s doctors. According to their professional/lobbying group,  the Pennsylvania Medical Society, we need tort reform because physicians are leaving Pennsylvania.

Consider these numbers: the Hospital of the University of Pennsylvania earned profits on patient care of 14.28%; Paoli Memorial of the Main Line Health System earned a 23.7% profit. One year ago when profits were reported, Ralph Muller, the CEO at Penn said it was  because patients were moving to facilities that do more procedures and have better outcomes (see my blog from last year, http://www.shragerlaw.com/blog/?p=371 ). This year, the Mullen quote is essentially the same: “[the higher profit] margins showed that patients were flocking to HUP for advanced cancer, heart treatment and organ transplants. The hospital is full most days, he said, and that is driving higher [profit] margins.”

The real insight in the Inquirer article came from a consultant to Main Line Health System who said that hospitals in Philadelphia have benefited from a shakeout in the market that has left many of the survivors flush with profits.

We all know what that means, some of the less competitive hospitals aren’t around any more. Main Line Health’s management consultant says that’s a benefit to other hospitals. The market had a “shakeout.” So in the hospitals’ universe a reduction in the number of hospitals has benefited the surviving hospitals.

But in that other universe the Pennsylvania Medical Society, which claims it is losing dues paying members, is blaming this shakeout on lawsuit abuse! In his comments to the Pennsylvnia Senate Republican Policy Committee, Ralph Mecum, the CEO of the Pennsylvania Medical Society said that Pennsylvania is losing several types of specialists, including cardiologists – doctors who provide heart care.

Now connect the dots with me here. PMS’ Mecum tells the Republican state senators that the number of cardiologists is going down. Ralph Muller says that one reason HUP is making double digit profits is the growth of “heart treatment” at Penn. Isn’t it clear that in specialties like cardiology, patients (read: heath care customers) are choosing to go to the centers with the most experience and the best ability to treat their conditions? Maybe, heart care should be focused in the big urban centers whose hospitals are typically associated with medical schools.

One thing is clear, the Pennsylvania Medical Society’s incessant calls for tort reform are misplaced and out of touch with the economic realities of why the delivery of health care in Pennsylvnia is changing.