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JOP: Let's start at the beginning. What made you decide to enter the field of oncology?
LWK: I grew up in Springfield, Illinois, and attended public school. Then, at the University of Illinois, I developed a strong interest in biochemistry. But I didn't want to be a lab rat. I'm very much a people person, and wanted to do something in applied sciences.I was accepted to Stanford Medical School and, at the rotation of oncology, met a physician named Saul Rosenberg who epitomized the meaning of the word in the largest sense: He was thoughtful, insightful, and caring, all the while being quiet and unassuming. Not just a doctor, but a true physician—and one of the giants of oncology.
JOP: What distinction do you draw between doctor and physician?
LWK: To me, the word “physician” means something much greater than “doctor.” Doctor is technical, while physician is the total person.Dr. Rosenberg became my mentor and role model, and that's how I ended up in oncology. I did my internship and residency at Stanford, and Dr. Rosenberg then introduced me to his colleague Joe Bertino, who was head of the fellowship program at Yale. So I went there as a Fellow from 1975 through 1977.My wife and I had met at Stanford, and in 1977 she was working on her PhD, so I looked for a job that would bring us back to California so we could be close to Stanford. I wound up joining a small medical oncology practice in the rural town of Santa Rosa, 45 miles north of San Francisco.We got so busy [that] we soon added a fourth doctor, and then diversified somewhat unexpectedly. A hematologist-oncologist in a town just north of us passed away, and we realized that his specialty would be a natural extension of our practice. I suppose we could have just moved up there and hung out a shingle, but I pushed very strongly that we buy the practice from his widow—which we did. That was the first step in our expansion from Sonoma County to Mendocino and Lake Counties. Then we met a physician in practice by himself in Napa, a county to the east of us, and invited him to join us. We grew by merger.
JOP: These were friendly mergers?
LWK: Always. Always mergers of equals, never takeovers. It wasn't long before we had nine doctors in the Santa Rosa practice, as well as to the north and east.By the late 1980s, it became obvious that we should diversify. I hasten to add that I have no business background; it just seemed wise to spread our bets. At that time it was not common for physicians to administer infusion chemotherapy in their offices, but I suggested we start thinking about this. It would certainly be the right thing for our patients.Coincidentally, a group of PharmDs from University of California, San Francisco [UCSF], formed a pharmaceutical distributorship called OTN [Oncology Therapeutics Network]. They were thinking about providing services to oncology offices, including those that would let oncologists integrate chemotherapy.We were fortunate at that time to have a visionary partner who had trained at UCSF and had a connection with the PharmDs. Through him, we became a beta site for OTN, which is now one of the country's biggest pharmaceutical distributors of oncology products.I should say here that my approach has always been to figure out the best thing for the patients, and afterwards figure out how to make that work from a practice point of view—which can be very difficult. But you must do the right thing for the patient, because everything else comes from that.At that time, patients would go to a hospital to get their labs, so we put a laboratory in the practice. It was not at all common at the time to have an integrated lab.
JOP: Your group does clinical research as well. Has that been a success?
LWK: Anybody who does clinical research knows it's hard. I wouldn't say that doing it gives us any particular advantage over other practices, but it has been very positive for our internal workings and operations. For example, a typical protocol will call for imaging to be done on a regular basis, with measurements. Well, when those things aren't integrated, there's a lot of discussion back and forth, but since we have an imaging division as well as medical and radiation oncology sections, we are able to communicate very effectively under one roof, so to speak. In other words, clinical research fosters practice integration, and that benefits a practice in multimodality care. Research has never been a strong profit-making component of this practice, and in fact we struggle mightily to have it break even. In our view the benefit is that it adds interest and builds an internal discipline that ripples through the practice, affecting quality control and protocol development. It has given a backbone of discipline I would have never have expected.
JOP: What has your experience been with managed care?
LWK: Managed care started to raise its head in the late 1980s, and things got very competitive. We knew that radiation oncology was a natural extension of our practice, and there were two competitive radiation groups in town. One had a large diagnostic component. We worked with both, and were still the only medical hematologist-oncologists.The forces of managed care propelled us to begin dialogues with both groups—who worked exclusive of each other—with the hope that we could enhance care and compete strategically. In the first phase, our dialogue resulted in a merger with one radiation therapy group.In the ensuing years, managed care got stronger, and had a natural tendency to foster aggressive competition. By the early '90s, it became clear that this was a prescription for disaster for all of us, because all that we were doing was bidding each other down. So I began “shuttle diplomacy” to discuss a merger with the other group. That took almost two years, but finally happened. To my regret, we lost two physicians in the process, but created a practice that was good for patients and for the group as a whole. The merged group started as of January 1, 1994. It offered medical oncology to three counties, and radiation oncology to two counties, with multiple offices. It also operated a large and active diagnostic group, with scanning and interventional radiology components both in hospital and free standing.Then we added a research arm, to the credit of one of my former colleagues. He did all the work to start up a Community Clinical Oncology Program [CCOP] and pharmaceutical-sponsored research arm. I became principal investigator for 9 years and passed the torch to Dr. Ian Anderson 2 years ago. I am past president of the merged group, and consider that to be an honor.
JOP: Overall, how were your experiences with managed care?
LWK: Terrible throughout the 1990s. Early on, the state of California set up a long-term pilot MediCal (Medicaid) project in Sonoma, Mendocino and Lake Counties that was in effect a forerunner to capitated care. It was left for our local physicians' organization to manage. I was on the board at the time.When the Kaiser HMO [Health Management Organization] began to expand in the state of California back in the late 1980s and early 1990s, it was obvious that it would come to Sonoma County. We weren't part of that system, and we needed to have an answer in coordinated care. Out of that came a home-grown HMO that was very successful.But in the early '90s, that HMO lost its physician connection and became stand alone. It set up a very complicated managed care program which was bound to fail, and did. The community experienced the bankruptcies of several small medical groups which left us with multiple unpaid accounts receivable. Eventually the HMO itself failed, leaving us with an even larger unpaid accounts receivable. We lost a substantial amount of money in that decade. It was a very bad time of failure and contraction of the physician community.Managed care remains very strong in our service area. When Medicare was begun in 1965, we were classified as a rural county, but we are now clearly suburban. There was recently an effort to get Sonoma reclassified as suburban under the Medicare payment geographic adjustment factor, but that effort failed. So it has been a very difficult reimbursement environment, and we've had to respond to that as best we can.
JOP: Now that the practice is so large and complicated, do you do strategic planning?
LWK: Yes. Our strategic planning is a very disciplined process, and for that I give enormous credit to our executive vice president, Mr. Shahab Dadjou. He brings a level of ability and far-sightedness that is rarely seen, and is our strategic mentor. He is a diplomat, a terrific negotiator, and a great visionary. With that kind of leadership we are able to make broad plans.The practice now has four integrated divisions, because we have just added two breast surgeons and two vascular surgeons. Those additions, for example, were strategic decisions, like all others, made by the group. When we see a need, we solicit ideas and opinions from each division into how best to fulfill it. We all participate. A financial analysis follows, and when necessary, we look for financial partners. Diagnostics and radiotherapy are extremely capital-intensive and require careful financial planning. We do not have any of the personal guarantees which are typical with physicians. Through internal financial discipline, we've been able to bring our group to the point where that's not required. We retain income to cover capital investment, and the result is great financial stability.
JOP: But conflict is inevitable in any organization. How do you resolve it?
LWK: Our board is a board of the whole. We are organized as a corporation, and each physician becomes a full shareholder and equal member at the end of a relatively brief probationary period. We have a 1-year track to what used to be called partnership. There is no benefit to seniority. We all share call equally, we have equal benefits, and an equal vote. An executive board is empowered to make suggestions and decisions, but they must then be ratified by the board as a whole. There can be strong disagreement, but we achieve consensus by guided discussion and rational analysis, and evidence-based decision making.
JOP: What do you look for in a new doctor?
LWK: We look for a good physician with excellent technical skills. In addition, does the young associate relate well to patients and referring physicians? Does he or she care about and want to take care of patients? Because that is the core of what we do. Everything else springs from that, and if we don't do a good job at that, then we've failed.We also consider continuity of leadership. Our group has always been involved in professional and community organizations and services. We believe in being part of the process, and look for that quality in new associates. We also want them to have some quality that we don't already have. Do they bring something new to the practice? In fact, every new associate brings fresh blood, energy, and new ideas. They prod the older members like me to stay up and learn.
JOP: Looking back, what was your biggest success? And is there one thing you would do differently?
LWK: Our biggest success was integrated patient care. As to what we'd do differently, that's harder to answer. Probably we would have started sooner with mergers and group integration, and also professional management. Medical oncology and its associated services are incredibly complex both from the medical and business perspectives. It's very hard for a physician to accept professional management, because physicians always think they know their business best. But the truth is, you simply don't have the time, skills, or background to manage a growing business, especially considering the complexities and challenges of the current Medicare situation. You have to pay adequately for professional management, but it brings benefits you wouldn't ever think of. I'm not talking just about financial benefits, either, but also in the daily operation of a business.
JOP: Is there anything you'd like to add?
LWK: Yes. I couldn't have done any of this without the support of my wife, Judy. None of this would have been possible without her.
Redwood Regional Medical Group (RRMG) is headquartered in Santa Rosa, California, and serves four large, contiguous counties just north of San Francisco. The practice is unique in many ways, including its multispecialty organization and the way it grew from a four-physician practice in the mid-1950s. L. Wayne Keiser, MD, has been a guiding force in the development of this group. The Journal of Oncology Practice asked him to share the practice's history as well as his personal insights about its remarkable growth.