The writer invites a follow-up conversation with the client.
MEMORANDUM
TO: Katie Smith FROM: Joan Malzone DATE: March 22, 2016
RE: Market and Other Factual Data Concerning Dillan Digestive v. Dr. Hyatt
Pursuant to your request, with the help of medical economist Cyrus T. Ling, I have developed data concerning gastroenterological (GI) medical care as it pertains to Dillan Digestive Medical Clinic (DDMC) and the Dillan County/Olivos area. Two hospitals serve the area. We interviewed many physicians and hospital administrators knowledgeable about the area and gastroenterology, and generated additional data via questionnaires.
It is correct that the only two gastroenterologists in the greater Olivos area are Dr. Davis and Dr. Hyatt. Other than those two, the nearest GI specialist is in Fairmont, a major metropolitan area about 70 miles away.
Gastroenterology is a subspecialty of Internal Medicine that focuses on the intestinal tract and liver. Ailments such as heartburn, ulcers, pancreatitis, hepatitis and colitis are the most common gastrointestinal complaints. Much of the field focuses on early colon cancer detection and endoscopy. Endoscopy is performed to visualize and examine internal organs and to treat conditions such as colon polyps, intestinal bleeding, and stones in the bile duct. Most patients see a GI specialist at least once every five years for basic checkups and colon cancer screening. Most care can be done in the office and does not involve hospitalization.
The nature of the doctor-patient relationship in a GI practice often is not particularly close. The bulk of the DDMC practice is devoted to colon cancer screening and thus concerns colonoscopy, a procedure in which a gastroenterologist threads a scope into the colon inspecting for cancer or precancerous polyps, both of which can be biopsied or removed during the procedure. The patient is usually not awake for the procedure, and there is little contact between the doctor and the patient. Gastroenterologists don't ordinarily treat cancers. They do remove polyps for testing.
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There are other aspects of the practice, including endoscopies of the stomach, mostly to inspect for ulcers. But this is waning, as the bacteria that causes ulcers have begun to disappear, so there are fewer patients with chronic ulcers treated by gastroenterologists. A large amount of the remainder of the practice constitutes standard tests, including prescribing and then interpreting blood tests, x-rays, and endoscopy results. Occasionally, recurring pancreatitis, GI bleeding, liver disease or irritable bowel syndrome lead to a more personal, patient-specific relationship, but it is the exception rather than the norm for the practice of gastroenterology in the greater Olivos area. There is a financial disincentive to treating patients with these conditions because they require extensive discussions with patients to help them cope, for which there is not much remuneration. The major issue for a patient switching from one gastroenterologist to another is not the personal nature of the doctor-patient relationship, but rather the inertia effect. Most of the procedures are diagnostic and not particularly comfortable, and if given a reason not to go, some patients may not seek colonoscopies at all.
Colonoscopies currently can be done only by gastroenterologists. On the horizon in this field, however, is colon cancer screening done by radiologists using CT scans to create a "virtual" picture of the colon without the need to use the scope. Also, primary care physicians will be able to take routine DNA samples from the colon and then send them to a lab to test for cancer. These technologies are expected to come on the market in about five years.
A couple of physicians stated that losing Dr. Hyatt's services would be "tragic" for the community. Most did not state it that strongly, but stated that "people need to go to GIs for routine services such as colonoscopy." They explained that for most patients over 50, colonoscopy every five years can drastically reduce the death rate from colon cancer. They all expressed concern that patients might be more likely to stop going if they had to switch to a different GI specialist or if there were less availability, and that that result would be troubling.
All physicians believed that having more than one gastroenterologist in the area would be "desirable." Quite a few physicians stated that, in their view, one gastroenterologist would not be able to meet the community's demand for such services, and that losing Dr. Hyatt's services would create an excessive workload on Dr. Davis, and would "likely result in undesirable and possible critical delays in patient care and treatment." But many other physicians and hospital administrators commented that Dr. Davis did not appear pressed for time, and they anticipated he could probably fairly easily meet the community's demand for services, including those patients that until recently were handled by Dr. Hyatt. They pointed out that, in addition to treating his patients, Dr. Davis has had time to obtain and complete a large number of pharmaceutical contracts for major drug companies, has worked with local businesses in conducting preventive medicine programs and cost benefit studies, and, even prior to Dr. Hyatt's arrival in Olivos, has traveled outside the city to other communities in order to serve patients. Many of the physicians also stated that Dr. Davis has provided prompt and efficient care, and that they had no knowledge of patients going untreated. No one had heard of any circumstance in which a patient has gone without proper care at those times when Dr. Davis was the only gastroenterologist in Olivos, both before and after Dr. Hyatt was with DDMC.
Many physicians noted that many patients needing GI care are elderly and frail, and would be forced to travel about 70 miles from Olivos if Dr. Davis were unavailable or if the patients
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preferred to see a different gastroenterologist. They stated that several emergency situations, such as GI bleeding, liver coma and jaundice, and pancreatitis from biliary stones, occur in the GI field, and could make travel for care life-threatening. But no one said that patients needing emergency care had gone untreated and no one stated strongly that such a result was likely if Dr. Hyatt were unable to continue to practice in Olivos. A few indicated that Dr. Hyatt might perform certain highly specialized procedures that Dr. Davis does not perform, but everyone else thought the two were virtually identical concerning what they provided and their respective abilities. They also noted that there are presently four surgeons in Olivos who can perform surgery for GI bleeding and certain other semi-surgical procedures performed by gastroenterologists. In addition, they mentioned that GI emergencies, mostly GI bleeding, are rare and that in severe cases patients can be transferred by helicopter from the hospital in Olivos to Babson Hospital in Fairmont, a trip of about 70 miles. Helicopter facilities are available at both of the local hospitals in the greater Olivos area.
One internal medicine specialist stated that he and Dr. Davis cover each other's cases. He also noted that there are a large number of internal medicine specialists in the county area served by DDMC, but that no one else is certified in the subspecialty of gastroenterology, which generally requires two additional years of training beyond that required to become an internist. He wasn't aware of any internists presently in the Olivos area who had started the training.
Prior to Dr. Davis's arrival in 2001, there had never been a gastroenterologist practicing in Olivos. Dr. Davis established a successful practice. At least twenty-one gastroenterologists practice in Fairmont, 70 miles from Olivos. There is no shortage of specialists in internal medicine in Olivos.
The geographic area described in the non-compete covenant encompasses approximately 1200 square miles in and near Olivos and that portion of Dillan County. All physicians agreed that DDMC's patients were from all over Dillan County in the Olivos area. According to the doctors, Dr. Davis has "a growing and well-established referral network" in the greater Olivos area. Most physicians have been referring their patients to Dr. Davis for GI work. The statement of one physician was typical: "Davis and Hyatt get my referrals. They are local and they do very good work. If Hyatt goes out on his own, I'd refer to both." When asked how long it would take for a new GI specialist to build up such a referral base, everyone agreed that it would take a minimum of two years to become known by the physicians in the area, and that realistically it might take up to three years. They said they didn't start seriously referring people to Dr. Hyatt, instead of Dr. Davis, until Dr. Hyatt had been with DDMC for two or three years.
There was a lot of speculation that Dr. Davis was trying to hire someone to replace Dr. Hyatt. There is a bit of a shortage of GI specialists throughout Columbia. One might think that this fact would make it easy to attract someone to Dillan County, but in fact the opposite is true. The fact that it is somewhat rural in the county is not particularly attractive to most GI specialists, and in a comparative sense it would be easy and more lucrative to set up a GI practice around Fairmont. Since that is easy to do, and Fairmont is not yet overcrowded, it is harder to attract someone out to Dillan County. Nevertheless, Dr. Davis has interviewed four or five doctors, and could hire at least one, and that might alleviate some of the situation of having only one provider if Dr. Hyatt were unable to practice in the area
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