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Karl Loren Background

CANTON, Ohio -- At the peak of their careers, Philip Rice and Richard Schwartz were doctors who made heads turn. They dominated cardiovascular surgery in this city of 84,000. They posted some of the lowest surgical mortality rates in Ohio. Each doctor earned more than $1 million a year, and they reveled in the luxuries that a thriving practice could buy.

The two surgeons furnished their office at Aultman Hospital with Oriental rugs, glass sculptures and original oil paintings. They drove matching sports cars -- first Jaguars, then black, top-of-the-line BMW 750s -- that they parked side-by-side in hospital bays reserved for them by name.

In their grandest gesture, Drs. Rice and Schwartz each December threw a black-tie dinner party at a local country club for 200 friends and colleagues. That single night's entertainment cost $20,000, Dr. Schwartz says, but it established him and Dr. Rice as part of Canton's social elite.

Then people in Canton began to learn unsettling things about the star surgeons. Deaths associated with bypass surgery surged in 1990 and 1991. Hospital disciplinary bodies began looking into reports of alcohol on Dr. Rice's breath. And hospital lawyers uncovered a little-known, grisly episode in Dr. Schwartz's past, involving the death of an infant in his care.

The Canton case provides a rare inside look at how a top medical practice boomed and then fell apart. Each year, state medical boards discipline about 3,000 doctors, or one in every 200, with steps ranging from reprimands to revoking of licenses. Most of those cases occur almost entirely in private, though, with only a brief case summary being released once a dispute is resolved. The public seldom learns about drawn-out and heated battles over whether to discipline a doctor.

In Canton, lawsuits in state and federal courts have put thousands of pages of confidential material into the public record. What emerges is a tale of two ambitious doctors, a city that urgently wanted their services -- and the debacle that resulted. The story has its tragic figures, yet also some unexpected heroes, including nurses who spoke out early about physician conduct that they believed wasn't good for patients.

Ohio's medical board suspended Dr. Rice's license indefinitely in 1993, after he enrolled in three alcohol-dependency programs and then refused to take a urine test. Dr. Schwartz hasn't had any action taken against his state license and remains active as a vascular surgeon in Canton. But his heart-surgery privileges at Aultman have expired, and the hospital won't renew them unless he establishes current competence.

In an interview, Dr. Schwartz says that he believes Aultman Hospital has acted unfairly against him, adding that he views his record as a heart surgeon as excellent. Dr. Rice didn't return repeated phone messages, but one of his attorneys called and said she had no comment beyond what was in the public record. The two surgeons are suing each other, and their joint practice is in dissolution proceedings.

Many aspects of the Canton case touch on broader medical issues. Among them: How many "second chances" should a top doctor be allowed? What happens when a doctor's disciplinary case is intimately tied into an entire hospital's reputation? Most broadly, how well can the medical system police itself?

When Dr. Rice arrived in Canton in 1981, at age 35, a nationwide cardiac-surgery boom was under way. New technology had made it easier to do heart surgery at community hospitals, instead of just at giant academic medical centers. With heart disease, then and now, ranking as the No. 1 killer of Americans, vast numbers of patients and their doctors were willing to try surgery against it.

Canton's biggest hospital, the 687-bed Aultman, counted on Dr. Rice to create a heart-surgery department from scratch. A former Eagle Scout who came from a faculty post at Loyola University in Maywood, Ill., Dr. Rice quickly impressed hospital managers with his tidiness and dedication. After his first heart operation at Aultman, he passed up a celebratory round of drinks that evening and slept in the hospital, just to be on hand in case anything went wrong.

In early 1982 Dr. Rice recruited a second heart surgeon, Dr. Schwartz, who was two years younger and had just completed a fellowship at the University of Alabama. Dr. Schwartz arrived with what seemed like a solid recommendation from the renowned head of that program, John Kirklin, who described him as "a delightful human being" who was well-informed in cardiothoracic surgery.

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Years later, Aultman would learn of a much harsher, confidential assessment that Dr. Kirklin wrote just two months before that recommendation letter. But at the time, the Canton hospital embraced its new surgeons. It agreed to pay for whatever operating-room design they wanted, to buy whatever equipment they wanted and to use nurses and anesthetists they chose.

Their practice quickly took off. Local cardiologists sent hundreds of patients each year. The most common operation, bypass surgery , typically generated fees of $4,000 or more for the surgeons and about $25,000 in total hospital charges. By 1986, Dr. Schwartz says, each doctor was earning more than $1 million a year.

Best of friends in the mid-1980s, the two doctors jointly bought an oceanside condominium in Boca Raton, Fla., for $1.7 million, which they planned to use separately with their families. They were so busy they couldn't use it much, but they spent more than $500,000 redecorating it with marble floors, a Jacuzzi and other fittings. They sent photos to Architectural Digest, hoping, unsuccessfully, that it would feature their vacation home.

As the older and more outgoing of the two, Dr. Rice was welcomed into Canton's elite. He became a bank director and golfed with civic leaders; his wife joined the board of the Canton Symphony. "Not only the hospital but the whole community was very proud of him," says Richard Pryce, Aultman's longtime president.

Demand for heart surgery was so brisk that, beginning in 1987, Drs. Rice and Schwartz hired first one, then two other surgeons. One, Eugene Wallsh, was offered a starting salary of $250,000, a projected annual bonus of $50,000 and a chance to become a full partner after a year or two.

But success brought strains, too. "Phil Rice wanted to be the best at everything he did," says John Anastasi, a surgeon who worked with the doctors from 1987 to 1989. "He wanted to be the best heart surgeon, the best dad, the best golfer. He laid an awful lot of pressure on himself."

Meanwhile, friction arose between the star surgeons and doctors who referred patients to them. "There was a lot of professional jealousy because of the amount of money the cardiac surgeons were making," Dr. Anastasi says. Disputes ranged from whose schedules mattered most when conflicts arose to what kinds of pacemakers some patients should have. "At times, we got a little heated about it," says Alan Kamen, a cardiologist.

Then came much bigger trouble. Starting in late 1990, concerns began to arise about Dr. Rice's alcohol use, according to depositions of nurses, doctors and hospital administrators in connection with a suit that Dr. Schwartz subsequently filed against Dr. Rice in Canton state court. Dr. Rice, in a deposition, said he came to the conclusion "sometime in 1992" that he suffered from alcoholism, but doesn't believe that alcohol use ever interfered with his professional duties.

One of the first alerts came from Dolores Bauder, Aultman's associate vice president for nursing. In her deposition, she said she noticed alcohol on Dr. Rice's breath during a chance hallway meeting. Unwilling to confront him, she obliquely mentioned the matter to Dr. Schwartz, asking if he had any mouthwash for his partner, "because Dr. Rice had the odor of alcohol on his breath."

Other such reports from nurses began making their way to the Physician Effectiveness Committee of Aultman Hospital, according to the deposition of the hospital's president, Mr. Pryce. But for several months, the matter sat unresolved. There weren't any reports linking Dr. Rice to intoxication during surgery. Doctors occasionally might need to check up on a patient in the evening, after a social outing, so an isolated report of alcohol use might not suggest a larger problem.

And Dr. Rice had strong defenders. "Phil Rice is a virtuoso surgeon," Dr. Wallsh remarked in his deposition. "He was always a pleasure to watch." Dr. Rice in his own deposition acknowledged having a tremor, which he said was unrelated to alcohol use. It didn't worry his fans. "He always shook in the right direction," Dr. Wallsh said.

Then in the spring of 1991, a crisis arose. While Dr. Schwartz was out of town for the weekend of April 27 and 28, Dr. Rice was scheduled to visit a series of hospitalized patients, including some of Dr. Schwartz's. In a deposition, Dr. Schwartz said that upon returning to Canton, he found that Dr. Rice hadn't seen three patients, including one with chest tubes that probably needed to be removed.

In his own deposition, Dr. Rice said he didn't believe he had failed to see any patients. But soon after, Dr. Schwartz said he called the head of the Physician Effectiveness Committee and said: "Indeed there is a problem."

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A few weeks later, on Mother's Day, an alcohol-dependency counselor arrived at Dr. Rice's home, along with three physicians on staff at Aultman, for what was termed an "intervention." Participants say they discussed Dr. Rice's alcohol use with him for about two hours. That evening, Dr. Rice said in his deposition, he agreed to visit a facility dealing with chemical-dependency problems, Shepherd Hill Hospital in Newark, Ohio.

Participants say they agreed to keep quiet about the reason for Dr. Rice's sudden absence. He was gone for a month, though, and rumors began to spread.

As his troubles unfolded, Aultman's mortality rate for bypass surgery , which had been much better than average, began to worsen. According to federal Medicare data, just 3% of Aultman's Medicare patients undergoing bypass surgery in 1989 died within 30 days of the operation. The death rate surged to 7.6% in 1990, declining only somewhat to 6% in 1991. Rates of 4% to 6% are considered average, though differences in patient mix can affect death rates greatly.

For Canton's already restless cardiologists, Aultman Hospital suddenly became an unappealing place to send patients for heart surgery. It did just 226 bypasses in 1991, down nearly 35% from 1990. Cardiologists increasingly referred patients to Cleveland, more than 50 miles away.

Alarmed, Aultman's president, Mr. Pryce, wrote Dr. Rice in November 1991. He said Aultman was willing to provide start-up help if a rival cardiac surgeon, supported by Canton's cardiologists, wanted to base a practice at the hospital. Mr. Pryce also wrote: "The 1991 referrals to the Cleveland Clinic are double any other year, indicating that the problem isn't going away."

In early 1992, a new heart surgeon who had handled many of Canton's out-of-town referrals agreed to come to Aultman. He was Roberto Novoa, a surgeon at the Cleveland Clinic. Dr. Novoa says Aultman clinched the deal by offering him "carte blanche" in setting up a program.

But Drs. Rice and Schwartz weren't about to give up without a fight. Instead, the next stages of their careers would become the subject of frequent chatter in hospital corridors.

By late 1991, the friendship between the two surgeons had vanished. In January 1992, Dr. Schwartz abruptly resigned from their partnership and sued for dissolution, accusing Dr. Rice of "certain behavioral problems."

Dr. Rice responded by changing the locks on the office door. Dr. Schwartz says he came to the hospital the next day to pick up an X-ray, only to find he couldn't get into his old office.

From that moment, the Schwartz-Rice litigation turned into a messy business divorce. The two doctors have argued in court papers over the sale of the Florida vacation condo, their art collection and their cellular-phone bills. In depositions, each has assailed the other's surgical skills. They even have bickered over who got to keep the chairs that furnished their office.

Yet both doctors wanted to keep doing heart surgery. Dr. Schwartz wrote some longtime patients in December 1991, announcing: "I will be resuming coronary bypass and valve replacement surgery." He later said he had stopped doing heart surgery in 1991 to protest what he regarded as deteriorating conditions at Aultman.

Some senior doctors at the hospital weren't thrilled. Dr. Schwartz in 1982, 1983 and 1986 had failed the test for certification by the American Board of Thoracic Surgery, making him ineligible to try again without retraining. Such certification isn't necessary for surgeons to perform cardiac operations, but it is considered a mark of distinction. From 1987 on, Dr. Schwartz's yearly total of heart surgeries had declined, as he concentrated more on vascular surgery.

In a letter dated Jan. 24, 1992, the chairman of Aultman's surgery department, George Kmetz, told Dr. Schwartz that his request to resume privileges in cardiac surgery would be "held in abeyance, because bona fide questions concerning your current competence in that area exist."

Dr. Schwartz agreed to spend a week at the Texas Heart Institute in Houston to refresh his skills. After that, Aultman temporarily renewed his credentials, and he successfully did one bypass in May 1992. Since then he hasn't had any heart cases at Aultman. This past May, Aultman told Dr. Schwartz that his cardiac-surgery privileges had "expired" because he hadn't done enough cases in the prior 12 months.

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Dr. Schwartz says he believes a boycott was organized against him. Last summer, in fact, he sued Aultman and some of Canton's cardiologists in Cleveland federal court, alleging an antitrust conspiracy that denied him the chance to practice as a cardiac surgeon. But a federal judge last month issued summary judgment in favor of the defendants, saying that Dr. Schwartz hadn't proved his case.

While mounting a defense against the suit, Aultman's attorneys asked for Dr. Schwartz's full file during his fellowship at the University of Alabama, just before he went to Canton. Among the items that became part of the court record was an Oct. 20, 1981, letter to Dr. Schwartz from his mentor, Dr. Kirklin. That letter, says Aultman attorney Joseph Feltes, "was quite a revelation."

Dr. Kirklin upbraided Dr. Schwartz for "your insertion of the chest tube in such a way as to damage the lung and result in death" of an infant patient. Dr. Kirklin cited five "errors" in Dr. Schwartz's handling of the case, adding: "It is the series of errors that led up to the final one that are the most damning." And his letter concluded: "I believe you will always have a high mortality and a high morbidity."

Dr. Schwartz, in a deposition, said he was greatly overworked at the time of the incident and had asked Dr. Kirklin earlier, without success, for some time off. He said he disagreed entirely with Dr. Kirklin's characterization of his work. He also said the infant's death led to a malpractice suit that was settled on confidential terms, and that he hasn't been a defendant in any other malpractice case.

To Aultman, it is a mystery why Dr. Kirklin didn't mention the infant's death in his recommendation letter for Dr. Schwartz. Dr. Kirklin didn't return calls seeking an explanation. But in a subsequent letter to Dr. Schwartz, dated Dec. 28, 1981, Dr. Kirklin softened his earlier criticism. He told Dr. Schwartz that, after being upbraided over the infant's death, "you have had a more sober and sensitive and reflective attitude to your training." He added: "Like all of us, you have your limitations." But Dr. Kirklin said these wouldn't preclude him from recommending Dr. Schwartz for board examination.

Despite that early controversy, Dr. Schwartz asserted in his suit against Aultman that he has "enjoyed an outstanding reputation as a cardiac and thoracic surgeon." In court filings, he said his mortality rate for heart surgery was below 2%, "or four times better than the national average."

Now, Dr. Schwartz says in an interview, his practice is limited to vascular cases, and his earnings have dropped. He says he plans to stay in Canton and battle what he regards as unwarranted attacks on him by Aultman and other doctors. But at the end of a four-hour conversation, the 46-year-old physician confides: "Sometimes I'm sorry I ever came here. It's just turned out to be a nightmare."

As for Dr. Rice, he rejoined the surgical staff at Aultman in June 1991, after his stint at Shepherd Hill. But after awhile he relapsed, according to state medical-board records. He enrolled in two more alcohol-dependency programs in early 1992, first in Cleveland, then in Hampton, Va., before returning to Aultman again.

Aultman officials say they gave Dr. Rice additional chances because other physicians with similar problems had rehabilitated themselves. "I've been here 15 years, and we've had only four cases of substance abuse among physicians," says Mr. Pryce. "Prior to this, we've had three complete cures."

As word about Dr. Rice's troubles spread, however, his caseload shrank. A further setback came in November 1992, when he operated on a woman with an abdominal aortic aneurysm. She subsequently died, and the family filed suit in state court accusing Dr. Rice and Aultman of negligence. Dr. Rice and the hospital deny the charges in the suit, which is pending.

Finally, Dr. Rice ran out of chances. After he completed his third alcohol-treatment program, the state medical board required him to provide periodic urine samples to a monitoring doctor. In December 1992, Dr. Rice refused to provide a sample. "I remember people pleading with him, telling him that if he didn't come down, he'd lose his privileges," recalls Arnold Rosenblatt, his personal physician. "But he wouldn't do it."

That refusal led to the suspension of Dr. Rice's license in Ohio in January 1993 and his re-enrollment in a treatment program at Shepherd Hill. Since then, Dr. Rice, now 48 years old, has been arrested for driving under the influence of alcohol. Friends say he hopes someday to be allowed to practice medicine again, but they question whether Canton ever will welcome him back.

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Aultman, meanwhile, is trying to rebuild a severely shaken department. The hospital is counting on its new chief heart surgeon, Dr. Novoa, who cultivates the local cardiologists and keeps a low profile. His small office is furnished with a standard wood-laminate desk; his bookcase is packed with medical journals; he wears surgical garb and white Rockport walking shoes in the hospital. Says Aultman's Mr. Pryce: "One of the nice things about him is he doesn't stand out."

Aultman and Dr. Novoa can point to some successes. Mortality rates on bypass surgery are just 1.5% this year -- much better than the state average. Local cardiologists are referring many patients again. Through July, Aultman was on pace to perform 450 open-heart surgeries this year, its most ever.

To Aultman officials, the 13-year saga of their heart program suggests that the medical system can discipline itself. Word of Dr. Rice's problems quickly got to the right authorities, they say. The surgeon was carefully supervised while getting a reasonable number of chances to break free of alcohol; when he didn't, his license was suspended. And Dr. Schwartz's departure from heart surgery, they say, is in line with research suggesting that heart surgeons need to handle at least 100 cases a year to stay sharp.

But critics, led by Dr. Schwartz, see problems with the way the case was handled at many stages. In his court filings, Dr. Schwartz contends that Dr. Rice got too many "second chances" while he didn't get enough. Other surgeons who worked at Aultman wonder whether its top priority was to get to the bottom of its disciplinary cases or to keep a big, profitable service like heart surgery running smoothly with minimal disruption.

To people who knew Drs. Rice and Schwartz well, the whole affair has an aura of sadness. One former colleague, Dr. Anastasi, reflects on the two surgeons' downfall and concludes: "They forgot what they were there for. They were involved in so many things -- business deals, being entrepreneurs. They forgot that patients are the most important thing."