This Doctor Got Screwed Over and So Could You

I was recently alerted about a terrible situation that Dr. Diana Blum is going through.  From a recent article it would seem that things went her way:

Diana Blum, a neurologist who now practices in Menlo Park, sued the medical group, PAMF and Sutter Health in 2015 over a contractual dispute that led to her leaving in 2013.

Santa Clara County Superior Court Judge Drew Takaichi took four of Blum’s six claims of action away from the jury, including wrongful construction termination, negligent interference, retaliation for physicians who advocate for medically appropriate healthcare and unfair competition.

The jury didn’t see the claims against Sutter Health or Palo Alto Medical Foundation, where the medical group operates.

Last month, the jury ruled to award Blum $28,415 in damages for one of the three remaining claims against the medical group.

Blum originally sought $10 million in her 2015 complaint, an amount that was updated to between $444,000 and $957,000 by the time of trial.

It sure seemed that, though she didn’t win the amount she wanted, she still had the jury on her side.  Nope. The attorneys for her former group went after her for $1.4 million in legal fees…..and the judge basically gave it all to them!

Dr. Blum allowed me to pass along her side of the story.  Here you go:

Dear Fellow physicians,

Many of you have asked for a summary of my case so I will try to give as much detail as I can below but unfortunately am somewhat limited given I am planning on appealing and this is still an active matter.

I am a neurologist who was employed by the Palo Alto Foundation Medical Group. I began in 2009 and became a shareholder in 2012. I began going to shareholder meetings and felt that the discussions were focused on implementing policies that put profits over patient care. I naively spoke up against some of these policies voicing my concerns how they would negatively impact patient care. Shortly thereafter, I was labeled a “non-team player” and placed on a PIP (performance improvement plan). There were never any incidence reported to justify a Pip and I actually had the highest patient satisfaction scores of all my Neurology colleagues. The basis for the PIP was “making inappropriate comments” and being a “non-team player”. I was ultimately given 3 options: 1. stay and be fired. 2. resign and go in peace with letters of recommendation so I can find another job or 3. sue or go to the media and I will never work in the bay area again.

I felt no choice but to have to resign so I did and started my own practice at the end of 2013. In the course of the year that followed several things happened. Many of my former chronically ill patients were not given my new contact information despite requesting it because they wanted to continue seeing me. I also had several doctors reach out to me reporting that they were experiencing similar pressures and the impact that this had on their ability to deliver appropriate patient care. Most disturbing for me, was consulting on patients that I felt were unnecessarily harmed by the same policies that drove me out in the first place.

All of this culminated in me feeling like something has to be done so I filed a lawsuit in early 2015 for wrongful termination arguing that the medical group violated statute 2056 where doctors can’t be retaliated against for advocating for patient care. The jury trial began on January 8th 2018 but unfortunately the judge limited what I could discuss at trial (claiming that these things would “bias” the jury). I couldn’t discuss patient harm or anything pertaining to the other doctors with similar stories, among other things that I can’t get into as I do plan to appeal.

The judge wouldn’t allow our expert witness to testify and ultimately only allowed the jury to deliberate on causes of action which didn’t have much monetary value associated with them. I was therefore awarded only ~28K on a 12:0 verdict for intentional interference with my current practice. I was planning on appealing the rest of the causes of action that were in my opinion inappropriately dismissed, however, before I could even focus my attention on the appeal, I found out that the medical group was going after me for their legal fees. I have now spent ~$400K trying to fight this liability (on top of my costs leading to trial) and this past Friday found out that the judge ruled against me for ~$1.27 million dollars (which I now owe to the medical group).

The doctors who originally wanted to speak up and tell their own stories are understandably fearful now. This is clearly sending a message to all other physicians who may be thinking about speaking up against the negative impact the business of medicine is having on patient outcomes.

I can’t thank you enough for all your encouragement and support to date. The gloves have to come off now and we as physicians need to unite in support of the sanctity of our profession and the well-being of our patients. What happened to me during my former employment is happening to doctors all across this country and resulting in our “physician burnout” epidemic. The bottom line is when doctors have to choose between the Hippocratic oath and their job, the patients are the ones to suffer:…/medical-errors-may-stem-more-from…

Many thanks for getting the word out and your generous donations which are helping me continue this fight. Please pass along my fundraising site to anyone you know that believes in the sanctity of the doctor-patient relationship and wishes to contribute to the cause.

Eternally grateful! Diana Blum

Please share this on every platform you can.  We are alone out there and our only choice is to stick together.

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Douglas Farrago MD

Douglas Farrago MD is a full-time practicing family doc in Forest, Va. He started Forest Direct Primary Care where he takes no insurance and bills patients a monthly fee. He is board certified in the specialty of Family Practice. He is the inventor of a product called the Knee Saver which is currently in the Baseball Hall of Fame. The Knee Saver and its knock-offs are worn by many major league baseball catchers. He is also the inventor of the CryoHelmet used by athletes for head injuries as well as migraine sufferers. Dr. Farrago is the author of four books, two of which are the top two most popular DPC books. From 2001 – 2011, Dr. Farrago was the editor and creator of the Placebo Journal which ran for 10 full years. Described as the Mad Magazine for doctors, he and the Placebo Journal were featured in the Washington Post, US News and World Report, the AP, and the NY Times. Dr. Farrago is also the editor of the blog Authentic Medicine which was born out of concern about where the direction of healthcare is heading and the belief that the wrong people are in charge. This blog has been going daily for more than 15 years Article about Dr. Farrago in Doximity Email Dr. Farrago – [email protected] 

  6 comments for “This Doctor Got Screwed Over and So Could You

  1. Joe Smegma
    August 1, 2018 at 7:35 pm

    Love the “Borg” analogy. I have used it for years. “Resistance is futile”. I feel for for Dr Blum as most of us do who signed on to do a job that is demanding, maddening, underpaid, and devalued by the insurance and hospital bean counters/bastards. They don’t give a rats ass about patient care OR outcomes. Actually, they do ONLY if it affects their bottom lines. Dr Blum is not an idealist or a neophyte or a disruptive physician. She simply cares for her patients. The hospital and the powers that be care less and less about patient care and outcomes and more about the bottom line. This is old news until you have a beef with your employer and go to court. I’ve been there. Not pretty. David against Goliath. I have nothing but respect for Dr Blum. All employed physicians could easily be in this scenario quickly if they choose to place patient care and well being over corporate profits. 11 years ago my hospital whacked our radiology department and replaced them with locus tenens. My partner had a patient with a respiratory problem. A CXR was ordered but the results got lost and several months later the result was found by the physician that was not reported. Lung cancer. Our office of family physicians stopped using the radiology service of our hospital which was a shambles. The hospital accused US of not being TEAM players. We left the hospital and joined the competition. We got sued. You have to pick a side. Side with your patients and doing the right thing or side with the “BORG”, because “resistance is futile”. Hats off to Dr Blum. Please win this one for yourself and your patients.

  2. chris
    August 1, 2018 at 3:04 pm

    I am not terribly sympathetic to this doctor based on the facts presented. The group has zero responsibility to provide to any patients her contact information. I think she is crazy to expect her former practice to refer patients to her. If a patient wants her to continue being their doctor it should be easy enough for the patient to find her. I don’t see how the group has done her any wrong in this sense.

    She is very vague on what the group was doing that she was opposed to but I can read between the lines and it seems she wanted to continue to treat patients that wouldn’t/couldn’t pay their bill. That is all very noble of her but she must pay the consequences of that and accept that her compensation is going to be reduced, possibly by a significant amount. In a large group it would be very difficult to implement a policy of seeing patients on charity. If everyone agrees, the practice is going to suffer financially as a whole. If its just one doctor that is seeing charity then that doctor’s practice is soon going to be nothing but charity and their compensation will either be zero or all the other doctor’s will have to share the cost of it. If she disagreed with this policy she was free to go out on her own and provide all the charity care she wishes and suffer the consequences, which she eventually did. I find it difficult to believe that it was just “voicing concerns” that got her sideways with her partners. She must have threatened them in some way (her option #3 listed litigation or going to the press) in an effort to exert more than her fair share of influence on the policies of the practice.

    She wasn’t wrongfully terminated because she resigned. If she thought that she would eventually sue the group for wrongful termination then that was a stupid thing to do as it makes the claim moot. That is probably why the judge excluded the evidence that she was some sort of whistle-blower. This is probably also why the judge “wouldn’t allow the jury to deliberate” on these causes of action.

    Now her group counter-sued her for legal fees because her suit was largely frivolous. In general I am in favor of people being able to recover legal fees from the plaintiff when they sue frivolously and the defendant has to hire a lawyer to defend themselves in court.

    I have personal experience with both of these issues. I have been the president of a small medical group where some of the physicians wanted compensation in excess of their production. I also resigned from another medical group because my fellow partners were intent on religious discrimination in their hiring practices. When the latter event occurred I actually looked into whether I would have cause of action for suing the group (I was both a whistle-blower and discriminated against personally)…it seemed like it was more trouble than it would be worth so instead I just used the threat as a tool to negotiate a favorable exit from the practice. I have also been the subject of two utterly frivolous lawsuits (one an mva and the other malpractice). Fortunately, my insurance policies paid for all the legal bills but I really wished that the plaintiffs be punished in some way other than being made to look a fool by the judge and my legal representation.

  3. Stevem64
    July 30, 2018 at 6:05 am

    This scenario plays out so frequently in our area, I am not at all surprised. The only unusual part of this story is how the dispute when so totally nuclear.

    It’s time for a bit of education here. Doctors in the first few years of their work life seem to be amazingly naive. Here are the realities:

    You are worth far less income than you believe.

    Your field may be “so needed” and “terribly in short supply,” but you will still be paid far less than you expected.

    If you are making what you believe is a decent salary, you are probably overpaid and will soon have a meeting with your bosses: “See more patients per hour or take a salary cut.”

    It sounds so wonderful that you are advocating for your patients. If you truly believe seeing more patients per hour will cause harm, then you are getting a salary cut. Sorry, but it is simple math and the realities of reimbursement.

    If you blow up with your group, you signed some stuff in your contract:

    The group is not obligated to tell patients where you are in your new practice.

    You probably have a restrictive covenant. In many states, these still matter. If you choose to violate this, you may feel serious pain.

    You are not owed accounts receivable.

    You may be obligated to pay back your practice deficit.

    You cannot entice your old patients to follow you.

    You cannot say bad stuff about your old group.

    You may be obligated to pay some other stuff, like tail coverage for malpractice.

    If you sue your old group, you will awaken a monster. There is probably a clause about it in your contract. Rest assured, the group can easily outspend you in legal fees and “being right does not matter.”

    Long ago, I lost count on how many times variations on this theme have appeared in our region. The groups involved have ranged from prestigious institutions to downright sleazy doctor exploitation practices.

    But they still follow this script:

    The big group offers a big bonus and starting salary. Everything seems wonderful. For the first year, all is well. The doctor works at a comfortable pace and makes good money. A home is purchased and kids do well in the local schools. Patients like the new doctor and the care is good. But, the underlying numbers are not working and a discussion on productivity with the boss starts. Then, bad stuff happens.

    If the doctor gets a decent attorney, the advice is: “Cut your losses and escape. Follow your contract and don’t fight. You will lose badly.”

    Far too often, doctors get attorneys who are astonished at the crummy doctor’s contract and want to fight. The doctor and attorney want to make a social statement. But, this never goes well for the doctor.

    This is simple reality. Nothing unusual in this story except maybe the size of the dollars involved.

  4. Craig Hayek MD
    July 29, 2018 at 8:49 pm

    A brave woman.

    Unscrupulous businessmen and women have ruled medicine for decades since the first physician found he could bill an insurance company for charges.

    The solution? Eliminate entities that “add no value” to our profession. Middle men like insurance companies and big business add no value, in a country where capitalism mandates the best service for the least price. Consumers now get 10 to 15 minutes of our time for an outrageous fee we receive a fraction of. A true economic nightmare fueled by big business. The worst service for the highest price.

    Cash only. Cash only. Cash only. Its our trade to sell as we please. Whether for no money or $150 bucks it’s our choice, or barter.

  5. PW
    July 29, 2018 at 2:53 pm

    Us “non-team players” just have to make up our own team it seems like. This is a good reason not to belong to a large entity which places more emphasis on $$$$ than it does patients (which is most these days).

  6. Stephen O'
    July 29, 2018 at 11:59 am

    In the ancient days of 50 years ago, doctors had small practices under the umbrella of a PC, or professional corporation, which undertook the liability for the practice, so that physicians, like Dr. Blum couldn’t be bankrupted.
    Society has changed. We have been taught the superstition of Taylorism and that humans are all factory floor workers, utterly exposed to the whims of the Leadership. Whether the Leadership has the guise of capitalism, like the Palo Alto Foundation Medical Group, or the guise of socialism, like CMS, is absolutely irrelevant. You, the individual physician, is exposed, defenseless and terrified.
    Doctors in the 21st century are in the same spot, subjectively, as the mineworker, the factory worker, the teamster in the 19th century. Shut up and do your job. If you sass off against Massah, there will be consequences.
    Here are the rules for doctors as modified from the Principles of Scientific Management from 1911:

    1. Leadership establishes best practices, which replaces the old rule-of-thumb method.
    2. Leadership trains, teaches, and develops the physician according to best practices,
    whereas in the past he chose his own work and trained himself as best he could.
    3. All work must be done in accordance with the principles which have been
    developed by Leadership.
    4. Leadership thinks, instructs and decides. Workers obey and act.

    This has been the plan for medicine since 1911. It has taken a century to implement, starting from the Flexner Report, which restructured American medical instruction to make it university-connected and scientifically rooted, until today.
    The revolutions in American medical science are asserted to originate in the Scientific Management approach. but American medicine has always been revolutionary and innovative, from well before Flexner and Taylor until it became the property of biomedical corporations around the turn of the 21st century. You, the medical line worker, simply do what you are told, and are punished, fired and/or sued if you dissatisfy Leadership.
    Cops shoot people; cops go to jail. Airline pilots crash planes; airline pilots go to jail. Teachers fail incomprehensible “quality measurement standards;” teachers are fired. The contempt that the entity – corporation, board, or whatever un-human thing that controls the humans – is unmistakable.
    Dr. Blum just failed the biology test. She respires, thinks, and is composed of carbon-based molecules. Therefore, she is at fault and must be assimilated.
    The Star Trek model of the Borg is a fictional metaphor. We can think about it, but I’ll be damned if I worship it.

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