Reliance on high-tech and high-turnover leading to lawsuits in ‘hospitalist’-heavy San Antonio

Michael Barajas
Michael Barajas

Olga De La Zerda went into Metropolitan Methodist Hospital on February 16 to determine if a bit of congestion was a sign of a more serious infection. It should have been a simple day of observation in the hospital, her family alleges, but care for the 87-year-old was transferred over to a “hospitalist” doctor tasked with managing many more patients.

De La Zerda’s daughter, Olivia Reyna, says she waited many hours before getting an opportunity to talk to the hospitalist. When she finally pulled him aside to discuss her mother’s care, the two locked horns almost immediately as Reyna objected to his recommended drug regimen, which, she says she warned him, had caused bad reactions in her mother in the past.

Yet it’s just that sort of engagement that the Institute of Medicine (IOM) urges of families and patients. Doctors are encouraged to educate patients about drug treatments to help prevent medical errors, which kill 15,000 elderly people every month. The strategy also puts the onus on patients and families to take more responsibility for monitoring medication use. Unfortunately, engagement backfired for Olivia Reyna when she found herself banned from Methodist in the days preceding her mother’s March 12 death. “She was sensitive to medication, but the hospitalists did not want to hear what we had to say,” Reyna said.

A death certificate says De La Zerda died of septic shock, with pneumonia and acute respiratory failure as contributing conditions. But relatives are convinced that a multitude of medications — administered against the family’s wishes — caused adverse reactions that eventually shut down De La Zerda’s body after three and a half weeks in the hospital. “My mother wasn’t on her death bed when she went to that hospital,” said De La Zerda’s son, Al, a limousine driver and musician. “If she hadn’t gone there, she would still be alive.”

At the time of her death, De La Zerda was under the care of a doctor employed by IPC The Hospitalist Company, which provides contract “hospitalists” to more than 14 hospitals in the San Antonio area. So-called hospitalists are medical personnel who contract with hospitals to manage large numbers of patients – sometimes two dozen or more in a shift. They are typically compensated per patient “encounter,” an incentive to maintain a high volume of patients.

IPC, the country’s largest publicly-traded hospitalist practice, has been named in seven unrelated, local malpractice lawsuits, including a death involving circumstances similar to the scenario described by De La Zerda’s children.

Both involve allegations that hospitalists failed to review medical histories or consult with primary care physicians before authorizing powerful drugs. Many studies say these types of deaths are preventable. But institutional change is needed across corporate health care, which often regards patients as commodities, making some doctors more accountable to shareholders than the Hippocratic Oath. This is exacerbated in Texas with tort reform, which often means families like the De La Zerdas can never expect medical justice.


Hospitalists have been a specialty since the 1990s, but their ranks swelled to 30,000 from 7,000 in the past decade as administrators learned their service was ultimately cheaper than primary care physicians and more efficient at moving patients in and out of hospitals. “The hospitalist works with other specialists in the hospital to manage the medical tests, procedures and medications prescribed during a patient’s stay,” Methodist Health care Spokeswoman JoAnn King told the Current.

The specialty has come under fire across the country for recurring problems with patient transitions. The University of Texas Medical Branch in Galveston (UTMB) began researching concerns with the hospitalist paradigm after geriatric specialists noticed hospitalists were not fully communicating with primary care physicians about patient histories and hospital stays.

A study published in the August 2 issue of Annals of Internal Medicine found that Medicare patients under hospitalist care checked out of hospitals sooner than those managed by primary care physicians. However, the hospitalist patients were more likely to be readmitted, costing $1.1 billion in added payments for 120,000 Medicare patients.

Yong-Fang Kuo, a co-author of the study, told the Current that the hospitalist model encourages early discharge to cycle more patients through hospitals. “The shorter stay means more beds are open and, if beds open, that means you can admit more patients,” she said. “In some cases, they can bill for six days even if the patient is only at the hospital four days.”

Dr. Greg Maynard, senior vice president for innovation and improvement at the Society of Hospital Medicine, said hospitalists began working to remedy criticisms long before the UTMB study. The specialty is under added pressure to address concerns since the federal health care reform act includes Medicare penalties for high re-admission rates. “Hospitalist programs are obliged to make this one of their top priorities or else face appropriate criticism that they are part of the problem,” Dr. Maynard told the Current.

About 180,000 elderly Medicare patients die annually from medical errors, according to the U.S. Department of Health and Human Services. Errors kill more people than pneumonia, ranking iatrogenic illness, or disease caused by medical treatment, as the sixth leading cause of death in the United States, according to a 2004 HealthGrades study.

The potential for errors increases when doctors manage high volumes of patients. Studies published in the Journal of Hospital Medicine in 2006 and 2008 show that hospitalists managing 14 patient encounters or more per shift are more likely to overlook documentation and communications with primary care physicians. Yet, health care administrators often expect hospitalists to see 18 to 25 patients per shift, up from 12 to 15 just five years ago, according to Today’s Hospitalist.

In a recent malpractice lawsuit filed in Bexar County, attorneys say one IPC hospitalist was potentially responsible for up to 43 patients on the night he allegedly ordered a fatal dose of Dilaudid for a patient at North Central Baptist Hospital. Neither IPC officials nor the attorney representing the company in this case returned calls seeking comment. The Baptist hospital — no longer a defendant in the suit — did not return calls, either.

Business-friendly Texas is the largest market for the North Hollywood, California-based company IPC. A full 23 percent of IPC’s operations are here. In a 2005 press release, IPC said its hospitalists attended to at least 88,000 patients annually in Bexar County. It serves about 14 local hospitals, including those in the Methodist and Baptist systems.

Carlotte K. Watson, 57, died on March 23, 2008, while recovering from an amputation surgery. IPC hospitalists were assigned to manage her care in shifts and coordinate communications with the surgeon who amputated her left foot, attorneys said. According to the lawsuit filed in the 73rd Judicial District Court, IPC hospitalist Dr. Jesus Virlar never consulted with the surgeon before prescribing Dilaudid, the synthetic opiate, which was the drug of choice for Matt Dillon’s Drugstore Cowboy character.

Watson’s surgeon authorized other pain meds, but Dilaudid was not one of them. He later said in a deposition that Dilaudid was not on the list because it was too dangerous considering Watson’s history of diabetes and hypertension. The hospitalist, working from home at the time, instructed a nurse to administer Dilaudid after Watson complained of pain, according to the lawsuit. Soon after the medication was administered, Watson’s heart rate fell rapidly and she went into cardiac arrest. She died at the hospital less than two days after the incident.

According to the suit, medical records showed Dr. Virlar did not review Watson’s medical chart, visit with her, or consult the surgeon before ordering Dilaudid. “Rather than come to the hospital to have access to patients’ charts and the patients themselves, Dr. Virlar chose to stay at home and play telephone doctor,” the lawsuit states.

IPC hospitalists never made rounds to visit Watson during the first day she was in hospital recovering from surgery, either, according to the lawsuit.

“Ten years ago, hospitalists didn’t really exist,” said Tom Rhodes, a San Antonio lawyer representing Watson’s husband, David. “This is the new world we live in. Now hospitalists are expected to manage 50 patients per shift, and they’re not always looking at medical records.”

Another IPC hospitalist, Dr. Dominic Meza, stated the cause of death was “coronary artery disease,” according to the lawsuit. Watson, however, had never been diagnosed with such a condition prior to her admission to North Central. Her husband, David, learned months later that the Bexar County Medical Examiner ruled “narcotic intoxication” was the cause of death, according to the lawsuit. “The medical examiner subpoenaed all the medical records and learned she had two heavy doses of Dilaudid,” David Watson said. “People need to be well-informed about who’s treating their loved ones. You never imagine a doctor will be sitting at home prescribing drugs like that.”

The medical examiner’s office also took the unusual step of writing that Watson’s manner of death was “unclassified” because Texas does not have a category for “medical misadventure,” another term for a medical error or mishap, according to the lawsuit.

Adding insult to injury is the fact that IPC billed Medicare for a hospital visit that never occurred, Rhodes said. “And if they didn’t see her and they billed for it, that’s fraud, isn’t it?” Rhodes asked Dr. Virlar in a deposition.

“Yes,” responded Dr. Virlar, according to court records.

In 2010, the U.S. Attorney’s Office for the Northern District of Illinois announced it was investigating IPC for alleged fraud related to IPC’s Medicare billing practices. After informing investors of the federal investigation, the stock price fell about four dollars, though it has since rebounded. IPC filings show that, in 2006 and 2010, it paid out $750,000 and $1.3 million in professional liability settlements after maxing out liability insurance for those years. Its current filings alluded to the possibility of additional lawsuits on the horizon.


The federally-funded UTMB research is part of a greater effort to reduce wasteful spending in Medicare and improve America’s health care system, which has the highest costs in the world, yet our rate of life expectancy ranks near the bottom of developed nations. “In the past, readmission was bad for the patient, but, what the heck, it was more money,” Maynard said. “Even if we (repeal) health care reform, the train has left the station. The future is definitely a more aligned model, so that medical centers will experience big losses if readmission rates are really high.”

That may yet depend on the direction of the political winds and the growing power of corporate health care as more publicly traded companies buy up smaller medical practices in a variety of specialties. “The biggest problem I see is that we’re commoditizing health care for the sake of efficiency,” said Dr. Fred Barken, an Ithaca, NY-based doctor who laments the decline of primary care physicians in the book Out of Practice. “The metrics that corporations look at are not the same criteria patients or doctors look at.”

Founded in 1995, IPC has grown by leaps and bounds since going public in 2008, when Wall Street money enabled the company to expand rapidly by acquiring smaller practices across the country. IPC-Link, its management software, is marketed as a tool that helps hospitalists gain quick access to medical records and primary care physicians. It also helps executives monitor productivity. “I know what my partners are doing; I know what I am doing. I know that if I only have 100 encounters for this month, I am going to lose money for the practice,” Dr. Adam Singer, IPC’s CEO, said in a December 2008 interview with HCPro. “I can manage my performance because I know where I stand.”

In health-care speak, patient encounters are used to tally revenue that doctors bring into practices. The industry average is about $75 per encounter, according to trade magazines. I figured IPC earned about $97 per encounter this year. I was unable to verify the estimate since neither public relations contacts, nor the investor relations official, or the local IPC director returned calls seeking comment. My estimates are on 3.5 million encounters and $340 million in revenue the company reported in the first three quarters of 2011. With average salaries of $260,000 in 2008, IPC doctors were among the highest paid hospitalists. About 40 percent of that pay was tied to incentives linked to patient encounters.

The company’s executives are well-regarded in the medical community. In October, the Medical Group Management Association and the American College of Medical Practice Executives named Dr. David Bowman, executive director of IPC’s Tucson, Ariz., office, as “Physician Executive of the Year” for 2011. Dr. Singer, IPC’s CEO, won the same award in 2010. Bowman also received special kudos for triaging U.S. Rep. Gabrielle Giffords and six victims shot by a gunman in a Tucson parking lot in January.

The stock price has doubled since 2008, when it raised $148 million in its initial public offering. IPC’s decision to go public during the recession turned out to be a clever strategy. Health care stocks, which typically perform well during recession, were up nearly 15 percent this year, leading the S&P’s 10 sectors.

For tech-loving venture capitalists and NASDAQ traders, IPC and its software offer an ingenious business model that corporatizes the patient-doctor relationship with a payout pipeline from Medicare and private insurance to Wall Street. With no apparent major capital expenses or debt, IPC appears to be pulling in cash faster than a strip club in a South Texas oil town on payday.

Critics say such corporate models reduce hospital care to a sales leader board found in a used car dealership, where the volume of sales matters more than quality of care. “Any program based predominately on volume, without paying due attention to quality, is not going to be as good a model for patients,” said Dr. Maynard, of the Society of Hospital Medicine. “I’m not going to say that is IPC’s model. I don’t know enough about that company to say if that’s a fault.”


A European study published in 2010 linked iatrogenic events to 19.5 percent of patients admitted to an intensive care unit (ICU). Old age, multiple doctors, and mixing medications were listed among risk factors. De La Zerda’s family thinks that’s the recipe that landed the former Chandler Assisted Living resident in the ICU at Metropolitan Methodist.

On February 16, De La Zerda complained of congestion and frequent urination. As a precaution, the family asked an ambulance to transport her to the ER room at Metropolitan Methodist. An ER doctor told the family she appeared healthy, but the hospital wanted to observe her in a telemetry room for 24 hours.

De La Zerda and her daughters ended up waiting in an ER for nearly two days before an observation room became available. She was alert, but hungry, anxious and eager to get back to Chandler when a health care worker administered blood pressure medication, according to relatives.

The family thinks steroids from breathing treatments raised her pressure. They warned the hospital that she could only take small doses of blood pressure meds, if any at all. About one hour after the pressure medication began, De La Zerda’s condition suddenly worsened, prompting doctors and nurses to rush the woman into an ICU, relatives said.

The disagreement escalated, the family says, when relatives objected to sedation with anti-psychotic drugs. Critics of the drugs include Dr. Louis R. Caplan, a professor of neurology at Harvard Medical School, who says hospitals overuse anti-psychotic meds to restrain “restless” patients in spite of evidence that the drugs impede recovery in the elderly. “My bias is against anti-psychotics for chemical restraint,” Dr. Caplan told the Current. “Anti-psychotics are not for someone with mild agitation, and they should never be used on old people.”

The timing of her hospitalization forced De La Zerda to miss the wedding of her neighbors — Jewel Etter and Holman Massey. De La Zerda was looking forward to the big event since her daughter, Reyna, organized a shower for the 93-year-old and 92-year-old. The fairytale story of their nursing home romance garnered multiple articles in the Express-News. Meanwhile, De La Zerda’s hospital stay, as her family describes it, descended into a Kafkaesque scenario more fitting for a Margaret Atwood novel, before her March 12 death.

Family members with power of attorney, including Reyna, attempted to remove De La Zerda from the hospital. As her condition worsened, they wanted to transfer her to hospice care, where they hoped she would rebound or, at the least, die with dignity. But the IPC hospitalist assigned to her care refused to recognize their legal position or release her, relatives said. At one point, the tension between the family and health care workers was so intense that hospital staff banned Reyna from the hospital and called the police to escort her off the property.

The family was especially upset after learning that the hospitalist — whom they say they rarely saw during the hospital stay — did not consult with De La Zerda’s family doctor before administering medications or ordering multiple tests, resulting in a $500,000 bill.

“We are aware of the De La Zerda family’s concerns. We welcome the opportunity to confidentially discuss these issues with them by phone or in a meeting,” said King, the Metropolitan Health care spokeswoman, in response to my questions about the case. “However, due to patient confidentiality, it is inappropriate for us to answer any of the family’s concerns through the media.”

The De La Zerdas think they have a strong legal case, especially since IPC told the family that it had terminated the employment of Dr. Sherif Shamaa, the hospitalist assigned to care for De La Zerda.

“I just received your letter of complaint regarding Dr. Sherif Shamaa and I am totally appalled. You have described a truly awful experience,” wrote Jay Evans, the Executive Director of IPC’s San Antonio office, in a letter to relatives. “In my 30 years of being an administrator of hospitals and medical groups, I don’t recall reading a worse letter of complaint about a physician.”

Shamaa did not return calls seeking comment, but a woman who identified herself as his wife, Theresa, said that he was not terminated as a result of the De La Zerda case. She also said the Texas Medical Board cleared her husband after determining a complaint by the De La Zerda family was unfounded. “It was dismissed because there were issues with the family,” she said. “It wasn’t anything that happened as a result of the hospital.”


In 2003, Texas voters capped medical liability at $250,000 after doctors complained that insurance costs were spiraling out of control. Since 2003, Texas malpractice payments have fallen more than 60 percent and liability premiums decreased by nearly 30 percent, according to the Texas Department of Insurance.

In a letter to the De La Zerda family, one local law firm, which declined the case, said that Texas tort reform has made it extremely challenging to make a business case for malpractice suits involving the elderly, non-working spouses, and children. Discovery and expert witnesses on a malpractice case can cost more than $50,000, while judgments typically won under current law rarely cover medical expenses.

In October, Nancy, another De La Zerda daughter, helped organize an event with Rita Marker, an attorney with the Patients Rights Council, to educate others on navigating the legal and end-of-life issues her family encountered. “It’s not about money,” she said. “For us, it’s about dying with dignity.”

Texas law does allow for higher economic damages in malpractice suits for working individuals with lost wages. In the Watson lawsuit, Rhodes argues that the cap on elderly and non-working people is unconstitutional because it denies due process and equal protection of the laws.

Some Texas doctors are starting to carry medical malpractice overage below $250,000. “Patients are basically left with low-ball settlements,” said Alex Winslow of Texas Watch. “You’re stuck with what you can get and, in most cases, it’s woefully inadequate.”

To aggravate matters, a “loser pays” law became effective in September, making plaintiffs responsible for paying a doctor’s legal fees when the plaintiff loses a malpractice lawsuit.

David Watson and his attorney, Rhodes, recognize what they are up against, but the legal team feel it’s a worthy fight. “It makes no sense from a business-law perspective, but we’re fortunate enough that we can take on this case,” Rhodes said. “It’s the right thing to do, and my gut won’t let me give it up.” •

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