Harvard Doctors Fight to Bar Management Firm

One of California’s biggest managed-care companies is facing opposition that packs the fury of a New England nor’easter as it attempts to crack one of the nation’s most important--but tradition-minded--medical markets.

A prominent group of Harvard doctors adamantly opposed to free-market medicine has turned its wrath on FPA Medical Management Inc., a San Diego-based firm that manages hundreds of physician practices in California and is expanding in Boston and other East Coast cities.

The doctors’ strategy was to accuse FPA this week of negotiating a “secret takeover deal” with Massachusetts Blue Cross and Blue Shield, the state’s largest insurer. Both companies emphatically denied the claim.

The insurer, the doctors charged, planned to “transfer control of most of its remaining health-care services” to FPA. They depicted FPA as an anti-union company with a “history of dubious management practices” that would “siphon money out of patient care and transfer it to their executives and shareholders.”

The doctors claimed that the negotiations would, in effect, amount to a conversion of nonprofit Blue Cross into a for-profit company.

“We are opposed to market-driven medicine,” said Dr. Susan Bennett, a Harvard internist and co-founder of the Ad Hoc Committee to Defend Health Care. “We do not like the way in which market medicine is affecting doctor-patient and nurse-patient relationships.”

Last year, the group tossed the annual reports of 150 for-profit health-care firms into Boston Harbor in what was billed as a reenactment of the Boston Tea Party. They claim membership of 4,000 doctors and nurses across the state.

The doctors’ group is led by Harvard cardiologist Bernard Lown, inventor of the lifesaving heart defibrillator and a 1985 Nobel Peace Prize winner for his work with a physicians’ nuclear disarmament group. Another co-founder is David Himmelstein, a Harvard physician who gained note in 1995 for his claim that an HMO fired him after he criticized the health plan.

FPA Medical owns 140 medical clinics and manages the practices of about 6,000 physicians in 28 states. It is the nation’s third-largest publicly held physician practice manager, behind MedPartners Inc. and PhyCor Inc.

Did the Harvard doctors uncover a hot story? Or was this a preemptive strike in which the doctors used overheated rhetoric and questionable facts to discourage “an out-of-state . . . insurance giant” from aiming its cost-cutting ax in their direction?

“Patently ludicrous” is how Blue Cross executive Peter Meade described the group’s charges to the Boston Globe.

So what is going on?

FPA Chief Financial Officer Steve Lash says the firm has “no interest in running a health plan” and is “not taking over” Blue Cross.

FPA and Blue Cross have had discussions, he says, but they only involve “allowing us to recruit physicians into an independent practice association [a doctor’s network].

“Period. End of story,” Lash adds.

But Harvard’s Bennett said Thursday that the group “stands by our story.”

“We have a confidential source we are 100% sure of,” she insists.

And what if its information turns out to be wrong?

“Either our confidential source is lying or the companies are lying,” responds Bennett, a San Bernardino native. “We didn’t hype it or exaggerate it.”

For his part, FPA’s Lash seemed unimpressed with his critics’ credentials.

Lown, he says, “is pounding his chest when there is nothing to say. We never had a conversation with him. Would he make a diagnosis with comparable information with what he knew about our company?”

Lash says lots of Massachusetts doctors like managed care and welcome FPA’s arrival. He depicts FPA’s physician critics as a bunch of “doctors who are 57 years old and would like to keep the status quo for three or four more years until they sell their practice or retire.”

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Times staff writer David Olmos can be reached by e-mail at david.olmos@latimes.com or by fax at (213) 237-7837.