Affairs of the Heart

A surgeon’s decision to sever a 29-year relationship with one hospital--moving on to another--points up a fierce financial competition among medical facilities.

When heart surgeon Jerry Kay and his team of 60 nurses, technicians and doctors last month severed a 29-year-relationship with St. Vincent Medical Center and moved their practice to the nearby Hospital of the Good Samaritan, it triggered what is fast becoming California’s most intense competition for heart patients.

Kay’s switch was seen as a major coup for the 101-year-old Hospital of the Good Samaritan, which recently has seen financial hard times and desperately needs a surge of new patients.

But the shift represents more. It provides a striking lesson in the sometimes fierce competition that exists among hospitals struggling to survive the financial ill effects of a rapidly changing health scene, government cutbacks, empty beds and a growing competitiveness among doctors and hospitals in all major fields of medicine.

Loyalties, Rivalries

And, underlying these economic facts is the more human story of why Jerry Kay, 65, one of the most successful and talented heart surgeons in the West, suddenly decided to leave St. Vincent after three decades of service. It’s a story laced with family loyalties and the professional rivalries of one of medicine’s most colorful specialties.

For St. Vincent, Kay’s departure means the possible loss of a major source of income. Last year he and his team did more open heart surgery than anyone else in California--1,202 operations. They accounted for 30% of St. Vincent’s $93.5 million in patient revenues, according to Nancy Miron, the hospital’s marketing director.

Surprised by what it sees as sudden aggressiveness on the part of the Hospital of the Good Samaritan--or “Good Sam” in the jargon of the local medical community--St. Vincent last summer launched a controversial newspaper and television advertising campaign that is aimed at holding on to its reputation as a pioneering heart center.

$40-Million Gift

Although Good Samaritan has not yet run any ads, it is feeling revitalized by the enthusiasm of a strong business-oriented Board of Trustees, by a $40-million gift from a one-time patient and by a new administrator who plans to make the hospital a blend of “the best values of academia and corporate culture.”

Both St. Vincent, which belongs to the Daughters of Charity of St. Vincent de Paul, and Good Samaritan, which once was owned by the Episcopal Church but now is a private institution, are nonprofit hospitals. But their nonprofit status does not exempt them from the requirement to keep revenues in line with expenses, a necessity if they are to remain open.

To understand the impact of Kay’s change of practice, it is necessary to know how such hospitals keep their beds filled with patients and the role that heart surgical teams such as Kay’s play in that process.

Patients don’t usually select which hospital to enter for heart surgery. Instead, they rely on the recommendation of their family physician or cardiologist.

Reputation Crucial

A heart surgeon’s reputation is crucial in getting referrals, as is the support of cardiologists affiliated with his practice or the hospital where he performs surgery. The surgeon’s reputation, in turn, is tied to the reputation of the hospital.

Achieving a reputation as a heart center is highly sought after by hospitals. Heart disease is not only a leading cause of hospitalization, but it is also a high-tech specialty that makes the hospital the focus of a continual flow of new drugs, medical and surgical procedures.

When a hospital acquires a reputation for quality surgery, it often receives patients who are referred by doctors from places distant from the hospital’s own community. St. Vincent has been such a heart center for a number of years. Good Samaritan, which has had a lesser reputation in that field, hopes that through Kay and his support team and other recently recruited heart specialists it will acquire such a reputation.

Reason for Move

Kay said he moved to Good Samaritan because “it is doing the kind of things that we wanted at St. Vincent but that it became obvious we were not going to get.”

The attractions include a research institute to investigate new and as-yet-unproven ways to unblock coronary arteries and to design new artificial heart valves or implantable devices that correct abnormal heart beats. Also, much to Kay’s delight, Good Samaritan plans to build a separate 12-story heart hospital on land next to the main structure.

In addition, the Kay team would become part of an expanded cardiovascular program that hopes to fly in patients by helicopter from as far as 150 miles away for state-of-the-art medical treatments that have been perfected at the research institute.

Kay, whose reputation rests more on his surgical skills than on research, says he is thrilled by the prospect of taking part in research at Good Samaritan.

Far Different Explanation

“Money,” Kay said, “was the last thing I thought of in coming to Good Sam. The hospital has given us no money. They have given us a promise. I feel like I did 30 years ago.”

But a far different explanation of Kay’s departure comes from Vincent Guinan, the president of St. Vincent, and from longtime members of that hospital’s medical staff.

According to Guinan and other St. Vincent officials, Kay’s attraction to Good Samaritan’s proposed research institute and free-standing heart hospital had nothing to do with his departure. In reality, Guinan said, Kay received the hospital’s support in every research project he ever proposed while there.

He left, Guinan and other officials said, as the result of behind-the-scenes rivalry between Dr. Taro Yokayama, a 12-year veteran of the heart team, and Kay’s 33-year-old son, Gregory, who joined the group 16 months ago after completing his surgical training with Dr. Denton Cooley, the renowned Houston heart surgeon.

‘Lot of Animosity’

The ultimate issue behind the struggle was the question of who would eventually succeed Kay as team leader, they said.

“There was never any question that Greg was starting at the top and that he was not going to work his way up,” said one physician who watched the drama unfold and who asked not to be identified. “That created a lot of animosity, especially with Dr. Yokayama, who is recognized as a magnificent surgeon.”

Kay, who is described by one associate as “an authoritarian, a man of ice who lets nobody stand in his way,” also attempted to reorganize the hospital’s cardiology department in such a way that it would be joined with cardiovascular surgery--in effect making the doctors who are the source of referrals for surgery a part of the surgery department. When that effort was blocked by administrators, and when administrators also sided with Yokayama in his conflict with Kay’s son, Kay began looking elsewhere.

‘Total Personal Matter’

“The whole thing is a total personal matter that never would have happened if Greg hadn’t come or if Jerry had treated Greg like a man on his way up instead of somebody already standing in his father’s shoes,” the St. Vincent physician source said.

Gregory Kay insists that he was unaware of any friction with Yokayama, who, he said, welcomed him to assist in operations in which Yokayama was the senior surgeon.

“We (he and his father) became aware of a problem just before we left St. Vincent, but it had nothing to do with our leaving,” Gregory Kay said. “My dad for years had tried to convince St. Vincent that there should be an emergency room, an on-campus research laboratory and a heart hospital. St. Vincent was not convinced.”

Jerry Kay admits a rivalry existed among the surgeons, but he insists that it was between Yokayama and him, not his son Gregory.

“It had nothing to do with Greg joining us. The rivalry between Taro (Yokayama) and me had been there a long time,” Kay said.

Took Others Along

Gregory Kay said his father was dissatisfied with St. Vincent’s research arm, the Los Angeles Heart Institute.

Kay took with him to Good Samaritan four senior surgeons, four assistant surgeons, five anesthesiologists, nine technicians who run heart-lung machines, nine physician assistants, six nurse coordinators and about 25 nurses and other personnel.

Remaining at St. Vincent is Yokayama and Dr. Mohammad Gharavi, a one-time Kay team member who quit a year ago to go into practice by himself but who recently returned to help Yokayama hold the fort along with several colleagues.

The big question now within the medical community is which hospital will dominate in heart surgery. This question is crucial to the welfare of both hospitals, but the answer depends largely on whether physicians who have patients to refer for surgery send them to Kay or stick with St. Vincent.

‘Volume Will Fall Off’

Guinan, the St. Vincent president, is certain that his hospital will continue to be a referral center.

“We did 69 cases in the first three weeks (after Kay left). Ask him (Kay) how many he did,” Guinan said.

Kay calmly admits that “the volume will fall off the first year, but in two years we’ll be doing 1,500” heart surgeries a year, 300 more than in his last year at St. Vincent.

One reason for Guinan’s confidence that his hospital will do well is Yokayama who, according to the administrator, served as senior surgeon for almost 40% of all the operations performed by the entire Kay team last year, including nearly all of the pediatric cases.

St. Vincent’s chief of cardiology, Dr. Marvin Kaplan, stresses that his hospital can match anything planned by Good Samaritan.

“We have a helicopter. We do angioplasties in the middle of the night. There’s nothing new there--just a re-emphasis on what we’ve been doing all along,” he said.

Controversial Ad Campaign

St. Vincent is extolling its reputation as a heart-disease treatment center in a newspaper and television advertising campaign rushed into production when administrators heard rumors that Kay might be leaving. Although Kay and most of the team that helped make that reputation have departed, the campaign continues.

Some local physicians who credit Kay for having built St. Vincent’s reputation have angrily accused the hospital of misrepresenting the facts by continuing to run ads with the same message after Kay has left.

Marketing director Miron, retorted: “It’s OK to be controversial in an ad campaign. It means we are being noticed and talked about. Our own medical staff has been very supportive of our campaign.”

And St. Vincent President Guinan defends it on grounds that the hospital was as much a pioneer as Kay when it allowed the surgeon in 1957 to do open heart surgery, then a risky undertaking.

Kay, whose marketing talents are not to be dismissed, is equally confident. “Our referral system is still intact,” he said. “Physicians didn’t send patients to St. Vincent, they sent them to me .”

No Easy Pushover

He recently sent letters to thousands of doctors throughout Southern California inviting them to refer patients to Good Samaritan, not only for heart surgery but also for other cardiac problems.

St. Vincent, say local health sages, is no easy pushover. According to records filed in Sacramento by both hospitals, St. Vincent has been far more financially successful than Good Samaritan in recent years.

Last year, St. Vincent told the state, its excess of revenue over expenses--which would be called profit if it were a for-profit hospital--was $15.2 million. The comparable figure for Good Samaritan was $200,000.

In addition, St. Vincent has the additional financial strength that comes from being the Western flagship of the 38 hospitals owned nationwide by the Daughters of Charity. This means that if things get tough, St. Vincent could get help from its sister hospitals, while Good Samaritan is out there all alone.

Medical Marketing

But even physicians loyal to St. Vincent admit that maintaining its present status will require even more aggressive marketing than has occurred to date.

“Everybody is going to be marketing,” cardiologist Kaplan said. “I don’t know who is going to look better to the public, but I’ll tell you something. The Mayo Clinic didn’t get there in three weeks. It took a lot of years.”

Not all hospital administrators are reveling in the hurly-burly world of medical marketing.

“Hospitals,” said one prominent Los Angeles hospital official who asked not to be identified, “are following the same path as airlines and banks, except that we are three years behind. It’s tragic to see doctors and hospitals beating one another up.”

Meanwhile, at Good Samaritan, the carpenters are working seven days a week around the clock building new catheterization laboratories and a new recovery room for an expected upsurge in the number of heart patients.