Editor: Your firm's healthcare practice has grown into one of the nation's largest. How has this come about?
Reed: About twenty-five years ago, we recognized that, in addition to the typical corporate transactional work, our healthcare clients had special needs so we developed the ability to meet those needs - which in turn attracted new clients in the expanding healthcare field. The firm also developed a food and drug regulatory practice. That attracted clients who are pharmaceutical and device manufacturers. We have some health insurance industry clients as well. The process of growing our expertise and experience has enabled us to attract a variety of new healthcare industry clients.
Editor: In March, the firm presented another very successful Health Law and Policy Forum. What is the background of these Forums?
Reed: They began in 1991 - shortly after some important new regulations had been promulgated affecting the healthcare industry. We invited some clients for a briefing on their effect. It was very successful and impressed us because there was a lot of interest in clients getting together with their lawyers and having some time to focus on legal issues and new developments. Soon it was a full day program with lunch. After picking a different focus each year for several years, we decided to make it a generalized law and policy conference. We do it at the same time every year so that people can save that date. Attendance has grown and we have consistently attracted a high caliber of outside speakers.
Editor: Why was this year's Forum kicked off by a presentation on effective corporate compliance?
Reed: It continues to be the top concern of those in the healthcare business, and John Steiner was the ideal person to talk about the practical aspects of compliance. John was formerly in the legal counsel's office of the American Hospital Association where he handled a wide variety of regulatory issues and in recent years served the Cleveland Clinic Health System as its chief compliance officer. The Clinic is an internationally recognized healthcare provider, research center and academic medical center with a medical college.
John discussed how to be effective as chief compliance officer and how to enlist the rest of the organization in a compliance effort. His presentation was very relevant to the current phase in which the industry finds itself. Most health systems and companies that are involved with providing regulated health services to federally funded beneficiaries now have compliance programs in place. Sometimes they exist in name only. Others are very proactive and effective. Our firm has been deeply involved in helping clients assess the effectiveness of their compliance programs and in suggesting ways to make those programs more effective. This is in addition to our ongoing role of helping set up compliance programs and advising compliance officers and in-house counsel when compliance problems emerge - such as where there is a need to do an internal investigation, consider self-disclosure or to take other action to address a problem.
Editor: To whom does the chief compliance officer of a healthcare provider generally report?
Reed: That is always an important relationship and different organizations approach it differently. The government would like the compliance officer to have extreme amounts of independence like the inspector general of a governmental organization. The government would like the chief compliance officer to report directly to the board.
In the real world, you get more of a mixed approach and sometimes compliance officers report in at different levels within the organization with a dotted line to a committee of the board or the CEO. They may report to the general counsel, but often there is independence and a collaborative relationship with the general counsel. It is in the interest of healthcare organizations to assure that the chief compliance officer have an adequate level of independence.
Editor: Tell us about the presentation with respect to the possibility of a flu pandemic.
Reed: Although in earlier years the Forums had not covered major issues in public health law, this subject is of intense interest to those who attended this year's Forum. Showcasing it on our agenda highlighted the fact that the Forum is not just about technical legal regulatory reviews, but also about policy issues that may not impact most private healthcare organizations unless an unusual situation occurs. Our speaker, Professor Lawrence O. Gostin, was an ideal choice. He is Director of the CDC Collaborating Center for Law and the Public's Health at Georgetown University. He discussed issues addressed in his recent article "Pandemic Influenza: Ethics, Law and the Public's Health" in the Journal of the American Medical Association .
Editor: Tell us about the discussion of hospital acquisitions of physician practices.
Reed: In the 1990s, there was a movement in the hospital industry to employ a large number of doctors directly. There was a wave of acquisitions of physician practices. Many hospital systems found that managing physicians was difficult; some disposed of the groups they acquired. It was a time of frustration when most new acquisition activity slowed.
Now the pendulum may be swinging back to acquisitions again. Lawrence Pixley of Stroudwater Associates addressed this issue at the Forum. We too are hearing of a heightened interest by hospitals in integrating physician practices (including specialists) with hospital services. The employment of physicians by hospitals seems to be the preferred approach because of anti-kickback and antitrust law concerns about other forms of collaboration between hospitals and physicians. A discussion of the antitrust concerns is found in Part II of this series of interviews on page 18 of the June issue of The Metropolitan Corporate Counsel.
Editor: What was the purpose of including a panel of journalists on the program?
Reed: This is something that has become a tradition over the last three years. The kinds of issues affecting healthcare discussed at the Forum have policy and legal implications that affect the entire healthcare industry as well as the general public. The journalists who cover healthcare pay great attention to those topics. Their views help shape the actions of policy makers and public opinion.
The involvement of journalists in the Forum focused attention on the need for those in the healthcare industry to work with them. So, now each year we invite them to the Forum to involve them in a dialogue with the audience. The first time we did this it was very successful. A lot of the credit goes to the journalists. Andy Miller from the Atlanta Journal-Constitution has been there every year. He does a great job. We have had other journalists join. Mark Taylor from Modern Healthcare contributes a whole lot. Betsy McKay from the Wall Street Journal has been there the last two years. We ask them to bring some thoughts and ideas to stimulate discussion. We then try to have the audience own the session.
This year the audience and journalists devoted considerable time to issues relating to pandemic flu. A big issue regarding a possible flu pandemic is that the country has not prepared for it even though the experts believe three major flu epidemics occur fairly regularly every 100 years. Current attention is focused on whether we should devote more resources to planning for a pandemic outbreak of bird flu.
Our national healthcare system does not have a surge capacity even for small local epidemics. It has barely enough capacity to handle the average amount of illness. And, we are not prepared for large numbers of people with life threatening situations. We will run out of hospital beds and respirators. This is driven home by all of us witnessing how we dealt with Hurricane Katrina.
Published July 1, 2006.
