Karen Garloch

Charlotte’s brain surgery battle reveals the fierce, high-dollar competition in health care

Dr. Hunter Dyer, a neurosurgeon with Carolina Neurosurgery & Spine Associates, performs spine surgery.
Dr. Hunter Dyer, a neurosurgeon with Carolina Neurosurgery & Spine Associates, performs spine surgery. Carolina Neurosurgery & Spine Associates

Charlotte-area patients who need brain and spine surgery will see a change in treatment options as two of the city’s oldest and most venerable health care institutions part ways before the end of this month.

Carolina Neurosurgery & Spine Associates will no longer be allowed to perform surgery at Novant Health Presbyterian Medical Center, Charlotte’s second-largest hospital, even though the institutions have worked together for 75 years.

A fierce battle for patients and revenue is at the center of the split that has shocked many in the medical community. It’s part of a trend in which hospital systems in Charlotte and across the country have aggressively hired their own doctors or bought existing practices, in part to ensure that patients, and revenue, stay in-house.

It’s also the result of simmering friction between Novant and the city’s dominant neurosurgery group. A YouTube video captured one of the neurosurgeons bragging about sealing a deal with “our favored hospital” – Novant’s competitor, Carolinas HealthCare System – by playing the two hospitals against each other

Carolina Neurosurgery – arguably the largest neurosurgery group in the country, with 37 neurosurgeons – is one of few Charlotte doctor groups not owned by either Novant or Carolinas HealthCare. Because it’s so big and gets most of its patient referrals from Carolinas HealthCare, it will survive the loss of Novant business.

But smaller, independent doctor groups feel threatened by the trend. They’ve seen patient referrals decline as hospital systems employ more doctors and control where patients are sent for specialty care.

“We’re nervous and we’re uncertain about our future,” said Dr. Jim Boyd of Oncology Specialists of Charlotte, independent cancer doctors who have worked closely with Novant for many years. “They can crush us.”

Patient choice affected

Concern among doctors like Boyd intensified since late January when Novant board members voted 9-2 to exclude neurosurgeons from Presbyterian – and also from the Matthews and Huntersville hospitals – unless the doctors are employed by or have contracts with Novant.

The effect was to cut ties with Carolina Neurosurgery, which has subspecialists for brain, spine and vascular surgery as well as the only pediatric neurosurgeons in the area.

Novant officials said the decision was necessary to build its neuroscience and stroke program. In recent years, Novant has hired more than 20 neurosurgeons and neurology specialists, with a goal of getting accreditation this spring as the first “comprehensive stroke center” in Charlotte.

Presbyterian President Paula Vincent said Novant’s new doctors will increase – not limit – treatment options by offering an alternative for patients who suffer from stroke and other neurological diseases. “Now we actually have a choice for patients,” Vincent said. “We have two excellent groups.”

Patients find a neurosurgeon in several ways. If they have an emergency, such as a stroke or a spinal injury, they’re treated by the on-call surgeon in the emergency room and then referred to the appropriate subspecialist in that doctor’s group. Patients with non-emergencies, such as chronic headaches, are typically referred by their primary care doctors. In some cases, patients choose their neurosurgeons directly, based on recommendations by family and friends.

Dr. Hunter Dyer, president of Carolina Neurosurgery, said he and his colleagues get most of their referrals from Carolinas Medical Center, through its busy emergency room and trauma center. The surgeons perform 4,000 operations a year at CMC, compared with about 700 at Novant.

Despite that strong association with Carolinas HealthCare, Dyer said he’s disappointed Novant patients will no longer have the choice to use his group if they want surgery at a Novant hospital. “We have thousands of Novant patients,” he said. “We don’t think it’s a decision that is right for the medical community. They told us it was a business decision. They want to build their own program.”

Dr. Dan Watson, a urologist and Novant board member, voted against excluding Carolina Neurosurgery. As incoming chief of staff at Presbyterian, he said he “argued with the administration for months” and brokered several meetings to try to work out an agreement.

“There should have been a way…where we could keep them on the medical staff,” Watson said. “I keep going back to patient care, and these guys are giving excellent patient care.”

Stroke center planned

In explaining the neurosurgery decision, Novant officials start by describing their ambitious plan to fill a “gap in care” for stroke patients.

They emphasize that Charlotte is one of the largest cities in the country without a “comprehensive stroke center,” the highest level of accreditation. Since 2012, Novant officials said, they have spent more than $7.5 million to buy equipment and hire doctors, including four neurosurgeons, six neurological intensive care specialists, and 11 neurologists.

Having in-house staff will enable the program to better coordinate care, reduce duplication and improve the patient experience, Presbyterian’s Vincent said.

But another factor in the Novant vote may have been what one local doctor called “bad blood” between the two groups.

He referred, in part, to the Carolina Neurosurgery partnership with Carolinas HealthCare, Novant’s major competitor, in ownership of an outpatient surgery center that opened in 2006.

CEO Carl Armato said Novant had tried for years to partner with Carolina Neurosurgery. “They have repeatedly chosen to partner with Carolinas Healthcare…while declining to support Novant Health’s efforts to expand our programs,” he said in an email. “For those reasons, we needed to stop working with (them) in order to build our program.”

YouTube video stings

Novant leaders came to believe Carolina Neurosurgery had never intended to partner with Novant after becoming aware of YouTube videos of speeches by Dr. Craig Van Der Veer, one of the group’s longtime partners. The videos capture his talks about how to build a successful practice in a competitive marketplace.

As an example, Van Der Veer spoke about negotiations that led to Carolina Neurosurgery’s joint venture with “our favored partner.”

“We played the two hospitals against each other,” he said. “We went to the hospital that we wanted to partner with” – CMC – and demanded an answer in 10 days, explaining that the “other hospital” – Novant’s Presbyterian – had agreed to a deal the night before.…

“We’ve played them off against each other to get what we wanted,” Van Der Veer said. “If you’ve got more than one hospital…keep them in perpetual conflict.”

One of the videos was removed from YouTube after the Observer inquired about it. In an email, Van Der Veer and Dyer said comments on the video “reflect just one viewpoint” and “are not representative of (the group’s) operating philosophy.”

Representatives from the hospital and the doctors’ group recall the negotiations differently. Armato said Novant had reached a “verbal agreement” with Carolina Neurosurgery and wasn’t aware the group was also negotiating with the competition.

Dr. Dom Coric, who led the negotiations for Carolina Neurosurgery, said he never talked to Novant before presenting the joint venture idea to Carolinas HealthCare. “There would have been no substantive negotiation without me being involved,” Coric said. “I was the point person.”

Independents threatened

That Carolina Neurosurgery won’t be part of Novant’s neuroscience program surprises many Charlotte doctors, in part because the group has been around so long and is widely respected.

“Typically neurosurgeons are jerks, but these are the nicest surgeons in the world. Their quality is really good,” said a longtime Charlotte doctor, not a neurosurgeon, who asked to remain anonymous because he works at both hospital systems.

“Everybody’s pretty upset about it,” he said. “It’s an economic issue. It’s not a quality issue. Over the next few years, it’s going to be a battle of who gets what, the hospitals or the doctors.”

Both Novant and Carolinas HealthCare have gobbled up physician practices in recent years. In Mecklenburg County, more than half of all physicians are now employed by hospitals. Carolina Neurosurgery is one of several large practices – including OrthoCarolina and Charlotte Eye Ear Nose & Throat Associates – that have remained independent.

Many primary care doctors and oncologists have merged with hospital systems. Typically, when this happens, prices go up. For example, chemotherapy costs 24 percent more in a hospital-based outpatient setting than in an independent doctor’s office.

At Oncology Specialists of Charlotte, Boyd is one of six cancer specialists who remain independent but have a strong alliance with Novant. In the past year, since Novant hired several oncologists, Boyd’s group has seen referrals drop by about 30 percent.

“That’s probably going to get worse,” Boyd said, because hospitals now have electronic records that make it easier to track “leakage,” the industry term for patient referrals that go outside the hospital system. “It’s hard to stay independent when referral patterns are being directed away from your practice,” Boyd said.

Martin Gaynor, a health policy expert at Carnegie Mellon University, has studied physician-hospital consolidation nationally. “It is a plausible story that having physicians be employed does make it easier to achieve objectives of better quality at lower cost and more care coordination,” he said. “But I don’t think that it’s required. It’s possible to achieve these goals with independent groups.”

Patients will see a difference. Carolina Neurosurgery doctors will continue to work at Carolinas HealthCare hospitals. Patients in the Novant system will be treated by the newer in-house surgeons – but lose the option of using the larger, established group. Gaynor concluded: “It’s both more choice – and less.”

Karen Garloch: 704-358-5078, @kgarloch