THE ONLY HEALTHCARE BUSINESS NEWS WEEKLY | JANUARY 27, 2020 | $5.50
NO ONE TO CARE
Long-term care providers scramble
to hire and retain personal care aides
Cardinal’s Bold goal:
gown recall Health systems
entangles aim to reduce
healthcare waste 50%
supply chain / by 2025 /
Page 8 Page 18
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22 Cover story
No one to care
By Harris Meyer
ProMedica CEO Randy
Most Americans say they’re
As health systems work to
happy with their employer-
Oostra says the best path to
achieve healthcare reform
move more care to lower-
based health insurance. But
that could change quickly in
cost settings, including
is through a congressionally
patients’ homes, the industry
the next economic downturn.
is struggling with a chronic
shortage of personal care
A reader says it’s “ludicrous” to ever penalize healthcare
aides. Providers are desperate
providers over the entire cost of patient care, since too much of
the cost is out of providers’ control.
Cover photo: Getty Images
30 Innovations 27 Guest Expert
By Jessica Kim Cohen
18 Health systems A Nebraska hospital is using an AI-enabled camera system to
targeting waste alert caregivers when patients at high risk of falling might be
By Maria Castellucci trying to get out bed—without anyone there to help them.
Wasteful spending in
healthcare is estimated 32 Q&A
at nearly $1 trillion Dr. Melinda Estes, CEO of St.
a year. An alliance Luke’s Health System in Kansas
of health systems is City, Mo., and board chair of the
committed to slashing American Hospital Association,
that figure 50% by discusses her goal to elevate the
2025. They’re taking public perception of hospitals
a variety of routes to and promote industry innovation.
31 Data Points
The first ballots in the 2020
2 Late News 8 Providers 12 Technology elections are about to be cast.
CMS will consolidate its Gown recall Healthcare ransomware What does early polling say
eight Compare websites entangles healthcare attacks intensify about healthcare as an issue
for consumers. supply chain. in severity and among voters?
sophistication. 34 By the Numbers
4 The Week Ahead 9 Medicare
Patient ID in the Medicare spent $2.6B 14 Policy The largest healthcare investment banks.
spotlight at ONC’s in 2018 on post-op Proposed guidelines
annual meeting. visits that never on vertical mergers Diversions
happened. disappoint antitrust
6 Regional News 36 Outliers
Intermountain receives 10 Politics Some condom wrappers with
$50 million donation Healthcare industry 16 Public health cheeky phrases got the thumbs
for pediatric project. spent big on lobbying U.S. hospitals advised down from Utah’s governor for use
before year-end to prepare for Wuhan in an HIV awareness campaign.
spending deal. coronavirus.
A congressional advisory panel said policymakers will need
to focus on how to improve care coordination and align state-level
Medicaid policies and programs to speed up a reduction in the number
California Attorney General Xavier Becerra, the lawyer leading the of babies born with neonatal abstinence syndrome.
charge to defend the Affordable Care Act against a challenge by the Several conservative advocacy groups last week formed a coalition
Trump administration and a group of GOP states, said proponents of opposing any solution to protect consumers from surprise medical bills
the landmark law should not begin panicking yet about its fate. that uses benchmark payments, an approach that providers disdain.
MODERN HEALTHCARE (ISSN 0160-7480). Vol. 50 No. 4 is published weekly by Crain Communications Inc. (except for combined issues for June 24 and July 1, and Dec. 16 and Dec. 23; and no issues on Nov. 25 and
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January 27, 2020 | Modern Healthcare 1
CMS will consolidate
Shield Association and 18 independent
Blues companies formed a new Civica
its eight Compare
subsidiary with the goal of lowering
prescription drug costs. The Blues
plans will contribute $55 million to the
websites for consumers
yet-unnamed spinoff, which will submit
abbreviated new drug applications,
or ANDAs, for select high-cost, single-
source generic drugs dispensed at the
pharmacy counter. The group plans to
The CMS will combine the eight online tools designed for Medicare beneficiaries
have its first generic medicines available
and their caregivers to make healthcare choices. Civica Rx, the Blue Cross and Blue
The changes will take place later this year. Patients and families now must by early 2022. The new spinoff's mission
use different interfaces on the Medicare website based on the care setting they to lower the cost of generic pharmacy
are interested in. The CMS offers options, called Compare tools, for hospitals, drugs is different from Civica's, which is
nursing homes, home health, dialysis centers, long-term care hospitals, inpatient pursuing rights to manufacture generic
rehabilitation, physicians and hospice groups. drugs often used in hospitals that are
The tools allow patients to research the quality subject to shortages and price spikes.
of organizations or physicians.
The CMS said the independent functionality John Kapoor, the former chairman
of each Compare tool “makes them difficult of Insys Therapeutics, was ordered
and challenging to navigate.” Additionally, to spend 5½ years in prison for
some of the tools look different than others. orchestrating a bribery and kickback
The CMS said the changes will offer more scheme prosecutors said helped fuel
consistency in terms of “look and feel.” the opioid crisis. The 10-week trial
The agency plans on reaching out to in federal court in Boston revealed
stakeholders—patients and providers—in the sensational details about the company's
coming weeks to get feedback on the changes marketing tactics, including testimony
before the website launches. The CMS said it will continue to make changes that a sales executive once gave a lap
before and after the launch “as part of our iterative improvement process.” dance to a doctor the company was
The CMS also announced it’s working on a new online portal to access CMS wooing. Kapoor was also ordered to pay
data. The agency said the new interface will have “intuitive search features to a $250,000 fine, the maximum under
allow users to easily search and download CMS’ publicly reported data, better sentencing guidelines.
serving stakeholders who use the interactive and downloadable datasets.”
—Maria Castellucci Too few healthcare professionals
are giving their patients advice to quit
smoking, according to the U.S. surgeon
general in the first report on smoking
food insecurity. cessation in 30 years. The report found
Four Chicago hospitals
The new system's CEO and leader- 44% of adult smokers didn't receive
merging to form single system
ship team, to be announced later this smoking-cessation advice from their
Four financially struggling safety-net year, will ultimately determine what the clinicians over the course of a year,
hospitals in Chicago—Advocate Trinity entity looks like. But based on current despite 84% reporting they saw a
Hospital, Mercy Hospital & Medical Cen- patient volumes and other data, one physician or other health professional
ter, South Shore Hospital and St. Bernard idea is to build either a 500-bed hospi- during that same period. The findings
Hospital—plan to create a single system tal or two 250-bed hospitals, St. Bernard were based on 2015 data from the
with one leadership team. CEO Charles Holland Jr. said. National Health Interview Survey
With an estimated $1.1 billion in- South Shore and St. Bernard are conducted by the Centers for Disease
vestment—including private dona- among the last remaining indepen- Control and Prevention's National
tions and government dollars intended dent hospitals in the Chicago area, Center for Health Statistics. The number
for hospital transformation—the plan while Advocate Trinity and Mercy are of Americans who smoke cigarettes is at
is to build at least one new hospital and owned by Advocate Aurora Health an all-time low, dropping from its peak
six new community health centers that and Trinity Health, respectively—two of 42% in 1964 to 13.7% in 2018. But
offer preventive services and address of the largest not-for-profit hospital approximately 34 million adults in the
social determinants of health, such as chains in the country. U.S. still smoke cigarettes.
2 Modern Healthcare | January 27, 2020
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spotlight at ONC’s
Matthew Weinstock Managing Editor
Assistant Managing Editor
312-649-5451 Editor Patient ID in the
Merrill Goozner Editor Emeritus JAN. 27-28: It’ll be a busy couple of days for health IT policy wonks
[email protected] as the Offi ce of the National Coordinator for Health IT holds its annual
CREATIVE SERVICES meeting in Washington, D.C. The theme of this year’s meeting is
Patricia Fanelli Creative Services Director “Connecting Policy and Technology: Bringing the EHR to
312-649-5318 [email protected]
the Patient.” The opening plenary session will delve into
Paul Romejko Graphic Designer the controversial topic of creating unique patient IDs. A
312-649-5335 [email protected]
discussion of balancing patient privacy and data access
is slated for Tuesday. Modern Healthcare’s Jessica Kim
Saman Creel Digital Content Strategist
312-649-5225 [email protected] Cohen will report on the key takeaways. Look for her coverage online and
in our HITS newsletter.
Emily Olsen Web Producer
312-649-5482 eol[email protected]
SENIOR REPORTER JAN. 29: Industry offi cials have another opportunity to share
Harris Meyer Chicago their thoughts on the Trump administration’s transparency agenda.
312-649-5343 [email protected]
Comments are due at the end of the day on a proposed rule that would
REPORTERS require insurers to disclose price and cost-sharing information to plan
Tara Bannow Finance | Chicago
312-649-5362 [email protected] members. Comments on the proposed rule, issued in November by the
CMS and the Labor and Treasury departments, were initially due Jan.
Michael Brady Rules and Regulations | Washington
202-505-4789 [email protected] 14, but industry groups pushed back, arguing they needed more time to
work on meaningful responses. Still, in a joint letter fi led Dec. 3, America’s
Maria Castellucci Safety & Quality | Chicago
312-397-5502 [email protected] Health Insurance Plans and the Blue Cross and Blue Shield Association
Jessica Kim Cohen Technology | Chicago supported the notion that “every American” should get
312-649-5314 [email protected] personalized information on cost and quality “before they
Rachel Cohrs Politics and Policy | Washington seek care.” They argued, however, that the “far-reaching”
202-681-3353 [email protected]
proposal would force insurers to disclose a “staggering”
Steven Ross Johnson Population Health | Chicago volume of data. Our rules and regulations reporter,
312-649-5230 [email protected]
Michael Brady, will break down the comments in an analysis this week.
Alex Kacik Operations | Chicago
312-280-3149 [email protected] Look for it online and in our newsletters.
Shelby Livingston Insurance | Nashville
843-412-6857 [email protected] JAN. 29: More than 6,000 U.S. veterans committed suicide each
RESEARCH AND DATA year between 2008 and 2017, according to the most recent data from the
Tim Broderick Data and Analytics Lead Veterans Affairs Department. Veterans are 1.5 times more likely to commit
312-649-5409 [email protected]
suicide than nonveterans. The House Veterans’ Affairs Committee will
Megan Caruso Data Specialist home in on this crisis during a hearing titled, “Caring for Veterans in Crisis:
312-649-5471 [email protected]
Ensuring a Comprehensive Health System Approach.”
COPY DESK —Matthew Weinstock
Julie A. Johnson Copy Desk Chief
312-649-5236 [email protected]
Upcoming Modern Healthcare events
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March 31-April 1 Leadership Symposium | Scottsdale, Ariz.
877-812-1581 [email protected]
May 12 Healthcare Transformation Summit | Austin, Texas
Modern Healthcare editorial offi ce: 150 N. Michigan Ave., Chicago, Ill.
60601-7620. Member of Business Publications Audit of Circulation. ModernHealthcare.com/TransformationSummit
January 27, 2020 | Modern Healthcare 4
As leaders, it’s time to advance
From your community’s schools and neighborhoods to a shift in focus on mental
health and wellness, you will learn from and collaborate with your peers about
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Featured Session | Redesigning Your Health System to Advance Health Equity
Rhonda Medows, MD Redonda Miller, MD Randy Oostra
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March 31–April 1, 2020 Scottsdale, AZ
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Leadership Symposium is sponsored by:
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Intermountain Healthcare CEO Dr. Marc Harrison
discusses the system’s $500 million pediatric
project announced last week, which includes a
new children’s hospital.
Intermountain receives $50 million
donation for pediatric project
NTERMOUNTAIN HEALTHCARE committed to square miles, said Katy Welkie, CEO of Primary Children’s
fund at least half of a $500 million project that will and vice president of Intermountain’s Children’s Health.
I bolster children-oriented programs and facilities, “Last winter, Primary Children’s had more patients than
spurring a $50 million donation. beds,” Welkie said, adding that the population is growing
Salt Lake City-based Intermountain aims to build a in Utah, particularly in the Lehi area. “That indicated a
second Primary Children’s Hospital campus in Lehi, Utah; need to expand.”
expand telemedicine and digital services; increase the The hospital reported to CMS that its operating profit
number of pediatric emergency clinicians in rural areas; in 2018 was $106 million on operating revenue of
grow Primary Children’s Hospital and its services in Salt $664 million, which resulted in an operating margin of
Lake; and add behavioral health services. 16%, according to Modern Healthcare Metrics.
Intermountain said it will fund at least half of the The second pediatric hospital in Lehi will feature 66
$500 million and tasked its foundation to raise the rest of beds across five stories.
the money. Gail Miller, who is chair of Intermountain’s Primary Children’s in Salt Lake will expand its
board and owner of the Larry H. Miller Group of Cos. cancer treatment center and its pediatric research with
that includes the Utah Jazz basketball team, pledged University of Utah Health, as well as its Level 4 neonatal
$50 million. intensive-care unit. Intermountain also plans to develop
Primary Children’s is the only pediatric hospital in the an advanced fetal-care center that will offer in-utero
Intermountain West, which spans more than 400,000 treatments such as fetal surgery. l
6 Modern Healthcare | January 27, 2020
Depression and kids
with behavioral health
2018 saw an increase in prevalence
of major depressive episodes among
ORTHWELL HEALTH is partnering with a research
facility that provides research, intervention and
Nresidential services for children and adults with
The Center for Discovery in Harris, N.Y., expects to open in
2021 a hospital and research institute that cares for people
living with autism spectrum disorders as well as other
complex conditions such as Alzheimer’s and dementia.
Currently, the center’s residential facility accommodates 300
children and nearly 200 adults.
“The Center for Discovery shares our values of providing
extraordinary care through a program of continual
Percentage of adolescents
70% in 2018 whose major innovation, education and a commitment to excellence,”
Northwell CEO Michael Dowling said in a statement that
depressive episode also
included severe impairment included mention of Northwell’s 30-year commitment to this
specialized care. “We look forward to working together with
them to provide a full continuum of medical and behavioral
health services that help enhance the lives of individuals
with developmental disabilities and medical complexities.” l
Fewer kids getting treatment
How adolescents who experienced a major
depressive episode in 2018 were treated
only: 2.2% 60.6% awards thrown out
and medication ULTIBILLION-DOLLAR Medicaid contracts
awarded by Gov. John Bel Edwards’ administration
21.8% M have been scrapped by Louisiana’s chief
Health procurement officer, who determined the health department
professional mishandled the bid process for deals to provide health
services to 1.5 million people.
Paula Tregre said health officials failed to follow state
law and bidding guidelines in determining which private
Percentage of U.S. adolescents who companies should receive contracts to manage care for most
experienced a major depressive episode:
of Louisiana’s Medicaid patients.
13.3% 14.4% rescinded the three-year contract awards estimated to be
In response to protests filed by two losing bidders, Tregre
worth about $21 billion. She said the health department
will have to redo the bid process to choose the insurance
companies that will oversee care for about 90% of Louisiana’s
Percentage of U.S. adolescents who experienced a
major depressive episode with severe impairment Medicaid enrollees.
Tregre’s decision, which can be contested, won’t disrupt
9.4% 10% Medicaid health services to nearly one-third of Louisiana’s
population. The Edwards administration signed emergency
contracts to keep the state’s five current Medicaid managed-
care contractors in place this year because of the ongoing
disputes about the contract awards and bidding process.
Source: Substance Abuse and Mental Health The taxpayer-financed managed-care contracts account for
Services Administration roughly one-quarter of Louisiana’s annual operating budget. l
January 27, 2020 | Modern Healthcare 7
Gown recall entangles
Cardinal and the Food and Drug Ad-
healthcare supply chain
of any cases of patient harm at this time.
But pinpointing the source of an infec-
tion can be tricky, Schabacker said. “We
don’t know if it really started in Septem-
ber or before,” he said. “There is clearly a
By Alex Kacik
potential for it to be widespread.”
How the recall unfolded
Cardinal got a tip Dec. 10, 2019, that one
of its manufacturers, Siyang HolyMed in
PIEDMONT HEALTHCARE executives,
Sept. 1, 2018 – Jan. 10, 2020 ministration said they were not aware
supply chain experts and clinicians hud- Gowns shipped to hospitals China, was using two unauthorized sites
dled the night of Jan. 12 to mitigate one to produce AAMI Level 3 surgical gowns,
of the biggest supply chain disruptions Dec. 10, 2019 Cardinal receives a which are used for procedures like open-
the health system has encountered. tip that Siyang HolyMed, one of its heart surgery and knee replacements.
They had just gotten word that their manufacturers in China, used two The company confirmed the tip during
primary supplier of surgical gowns, unauthorized sites to produce the gowns an on-site investigation Dec. 20; it im-
Cardinal Health, distributed potentially Dec. 20, 2019 Cardinal confirms the mediately stopped doing business with
contaminated products. Around half of tip in an on-site inspection; stops Siyang and halted imports.
Atlanta-based Piedmont’s 11 hospitals doing business with Siyang and
were affected. halts exports The gowns had increased bioburden
It sequestered the affected gowns as levels, which identifies and quantifies
well as other supplies that Cardinal pack- Jan. 7, 2020 Cardinal places a hold bacteria before sterilization, but the exact
on several SKUs
aged them with. But the health system amounts are unknown. The windows at
did not have to cancel any surgeries as Jan. 10, 2020 Unable to identify the inspected site were open, it lacked
it worked with Cardinal and other stake- specific gowns from the unauthorized appropriate hand-washing stations, food
holders to source alternatives. plants, Cardinal puts a hold on all was in the manufacturing area and the
“Not of this scale, but supply disrup- lots from Siyang and notifies the Food door wasn’t secure, the company said.
tions have been occurring for years,” said and Drug Administration The gowns are shipped to sterilization
Joe Colonna, Piedmont’s vice president Jan. 21, 2020 Cardinal issues sites after they are made. But Cardinal
of supply chain. “The secret is having a recall notice cannot ensure the products are sterile
good relationship with clinical folks and because of their unquantified exposure
leadership—no one panicked.” to bacteria while they were made. Be-
ECRI Institute. Things get cloudier as the yond bacteria, the gowns may have had
Cardinal said that 2,807 facilities supply chain adds links. organic matter that could be deadly,
around the world received gowns Piedmont is creating a long-term mit- Schabacker said.
that may have been contaminated at igation strategy in case manufacturers Cardinal placed a hold on several
a manufacturing plant in China. The can’t sustain higher production levels. SKUs on Jan. 7. It then determined that it
wholesale distribution giant recalled In the meantime, it aims to develop a could not differentiate the product that
9.1 million gowns, 7.7 million of which more strategic, and less transactional, came from the two unauthorized sites
were distributed to hospitals, ambulato- relationship with suppliers. The goal is and other Siyang facilities, so it put all
ry surgery centers and labs from Sept. 1, to shed some light on where materials lots on hold on Jan. 10, notified the FDA
2018, to Jan. 10, 2020, Cardinal estimat- are sourced and how products are made and sent notices to customers.
ed in a Jan. 21 notice that warned of pos- to identify vulnerabilities, Colonna said. Cardinal, which has replaced prod-
sible surgical-site infections. Executives ECRI hasn’t heard of critical shortages ucts at no cost and deployed employ-
said they sincerely apolo- or a delay of lifesaving pro- ees to help providers, maintained that
gize and that patient safety cedures due to the recall, it acted as it gathered information and
is their top concern. THE TAKEAWAY so the initial supply chain determined the scope of the problem.
As more manufacturing With more production disruption seems to have Johnson City, Tenn.-based Ballad
occurs overseas, these is- moving overseas, been mitigated, Schaback- Health canceled about 200 elective sur-
sues will likely persist. It’s providers and er said. “But can it happen geries while Allegheny Health Network
difficult to ascertain where manufacturers need tomorrow with a different in Pittsburgh said it had to cancel about
first-line suppliers get their to be more strategic product? Totally,” he said. a dozen. Five other providers Modern
materials, said Dr. Marcus about supply chain “Hopefully stakeholders Healthcare contacted said there was
Schabacker, CEO of the management. take this as a red flag.” minimal or no impact. l
8 Modern Healthcare | January 27, 2020
$2.6B in 2018 on
20% of that on
post-op visits that
be the patient’s
Senior health policy
By Tara Bannow “Of the GETTY IMAGES
ment rates are based on physicians’ sur- they provide. And when surgeons pro-
SURGEONS ARE OVERPAID billions vey responses that estimate the number vide visits after the 10- or 90-day fol-
of dollars every year for certain bun- and level of post-operative visits a typical low-up window, they’re allowed to bill
dled procedures, according to a new patient would require. But recognizing for those separately, he added.
CMS-funded study. that there’s no way to verify whether phy- The new report also notes that
The New England Journal of Medi- sicians actually deliver that many visits, post-operative care is increasingly being
cine report found that just a fraction of the CMS now requires certain physi- shifted to hospitalists and intensivists,
post-operative visits the CMS pays for cians and other practitioners in nine who bill separately from the bundled
as part of procedure bundles actually states to report each post-operative visit payment for the initial procedure. “In
take place. The report says reducing the using a “no pay” code. that case, the surgeon is getting paid and
payments accordingly would have saved RAND published initial findings on then the other practitioner that did that
Medicare $2.6 billion in 2018 by decreas- the data in a trio of CMS-funded studies extra visit is also getting paid,” Mulcahy
ing payments for 10- and 90-day global last year. “Up until last year, Medicare said. “So Medicare double pays.”
procedures by 28%. didn’t know how many visits were hap- The study notes that because of
The findings have “huge” implica- pening,” Mulcahy said. “Now they do. Medicare’s budget-neutral payment
tions for physician revenue, but also They’re overpaying.” policy, if the CMS were to lower pay-
for Medicare patients, who face a 20% ments for surgical procedures, it would
co-pay under Medicare Part B, which The data showed that post-operative result in across-the-board pay increases
includes post-operative visits, said An- visits took place in just 4% of 10-day for all other physician services, such as
drew Mulcahy, lead author of the study global periods for minor procedures, evaluation and management. Mehro-
and senior health policy researcher such as a dermatologist removing a skin tra said that would shift a significant
with RAND Corp. tag. For more complex procedures with amount of payments from surgeons to
“Of the $2.6 billion, 20% of that on 90-day global periods, 39% of the visits primary-care physicians.
paper would be the patient’s responsi- that were assumed to have taken place Unsurprisingly, surgeon specialty
bility,” he said, adding that many ben- under Medicare’s payment valuation groups had strong reactions to RAND’s
eficiaries have Medigap or supplement actually took place, according to the first set of studies, and the overall idea
plans to offset that cost. RAND study. that Medicare was overpaying for proce-
Post-operative visits account for Dr. Ateev Mehrotra, an author of the dure bundles.
roughly 25% of Medicare payments to study and associate professor of medi- The American College of Surgeons, for
physicians for procedures with bun- cine at Harvard Medical School, said he example, objected to counting the num-
dled post-operative care, which totaled doesn’t think it’s because patients aren’t ber of “no pay” codes submitted to tally
$9.9 billion in 2017, the getting the post-operative the number of post-operative visits pro-
study found. care they need. vided. Vinita Mujumdar, ACS manager of
The findings are based THE TAKEAWAY “Rather, I think clinical regulatory affairs, said it’s possible doc-
on the volume of post-op- patterns have changed over tors could forget to submit the code or
erative visits reported by Experts believe time potentially, and there- have trouble reporting it due to barriers
clinicians under a 2017 clinical patterns fore that post-operative care in the hospital or inadequate software.
CMS requirement designed have changed and is not necessary,” he said. “There are many steps along the way
the CMS is paying
to strengthen the agency’s for billions of Still, Mulcahy said he where the code could have been pre-
oversight of the number of dollars of post- wouldn’t be surprised if vented from getting to CMS and being
visits actually delivered af- operative care that some doctors tend to round counted,” said Mujumdar, who had not
ter surgeries. isn’t necessary. up in their survey estimates seen the most recent RAND study be-
Medicare’s bundled pay- of how many post-op visits cause it was under embargo. l
January 27, 2020 | Modern Healthcare 9
Healthcare industry spent big on
lobbying before year-end spending deal
By Rachel Cohrs
outpaced Q4 totals for 2018, except for the American Medical Association.
MAJOR HEALTHCARE COMPANIES
Q4 lobbying disclosures
and lobbying groups spent big dollars as
they fought to advance their interests on
surprise medical billing, Affordable Care Lobbying spending for the major healthcare industry groups in Q4 2019 change
Act taxes and prescription drug pricing
before a big year-end spending deal, and AHIP 50.97%
they mostly got their way.
The American Hospital Associa- AMA -16.67%
tion opposed a bipartisan, bicameral
compromise on surprise billing that BCBSA 15.72%
was ultimately left out of the 2020 ap-
propriations package. The group spent GNYHA 6.90%
more than $6.6 million on lobbying in
the last quarter of 2019 according to PhRMA 6.97%
federal lobbying disclosures, which is $0 $2 $4 $6
$1.2 million more than they spent over Million Million Million
the same period in 2018. Source: Senate Office of Public Records
The Greater New York Hospital As-
sociation, an influential force in Sen-
ate Minority Leader Chuck Schumer’s costs was left out. PhRMA spent $6 mil- ter spending just $320,000 on lobbying
home state, spent $620,000 on lobbying lion in the 2018 period. in the fourth quarter of 2018, Humana
in the fourth quarter, up $40,000 from Insurers won some and lost some in ramped up spending to $2.9 million for
the same period in 2018. Schumer, a the year-end deal—they scored repeals the 2019 period.
Democrat, called Sen. Patty Murray of a health insurance tax and an excise Physician groups also largely op-
(D-Wash.), who negotiated the surprise tax on high-cost employer plans that posed the surprise billing compromise
billing deal, to express his displeasure were included in the Affordable Care measure. The American Medical Asso-
with the agreement at a key juncture, Act, but the surprise billing deal they ciation spent $4 million on lobbying in
the Washington Post reported. supported was left out. the quarter, about $790,000 less than
“This isn’t your typical partisan fight the same period in the previous year.
about healthcare. This is really about the Repeal of the two insurance-related Private equity-owned physician staff-
business interests of healthcare against taxes and a 2.3% excise tax on medi- ing companies also beefed up their
the interests of families,” said Frederick cal devices will cost federal taxpayers lobbying. TeamHealth, owned by the
Isasi, executive director of the consumer nearly $400 billion over the next de- Blackstone Group, spent $130,000 in the
advocacy group Families USA. cade, according to the Congressional fourth quarter. It didn’t report any lobby-
The AHA and GNYHA declined to Budget Office. ing expenditures in that period in 2018.
comment on their lobby- The insurance indus- Blackstone spent $720,000 on its own
ing spending. try trade group America’s in the same period of 2019.
The brand-drug lobbying THE TAKEAWAY Health Insurance Plans Envision Health, a physician staffing
powerhouse Pharmaceu- Major healthcare spent $2.3 million on lob- company owned by the private equity
tical Research and Manu- companies and bying in the quarter, up firm Kohlberg Kravis Roberts & Co.,
facturers of America spent lobbying groups $790,000 from the previous spent $380,000 lobbying in the quarter,
$6.5 million on lobbying mostly got their way year. The Blue Cross and up from just $80,000 in 2018.
Congress in the quarter, as controversial Blue Shield Association Lawmakers will take another run at
and got its desired outcome measures like was another big spender at addressing drug pricing and surprise
in the year-end spending surprise billing $1.8 million, up $250,000 medical bills ahead of a self-imposed
deal as major, bipartisan were left out of the from its lobbying in the May 22 deadline to fund expiring Medi-
legislation to lower drug spending package. same period of 2018. Af- care and Medicaid programs. l
10 Modern Healthcare | January 27, 2020
Bernard Tyson’s legacy.
Tyson’s more than 30-year career at Kaiser
Permanente included tackling homelessness,
hunger, gun violence and behavioral health,
and challenging the status quo for a better
healthcare system and community at large.
Join us at the annual Health Care Hall of
Fame Gala and awards dinner to honor the late
Bernard Tyson for his impact on healthcare. Bernard Tyson
Chairman and Chief
March 22 | Chicago, IL
In partnership between Modern Healthcare and the American College of Healthcare Executives
(ACHE), this award was created to honor those who have made outstanding contributions and
extraordinary strides in the healthcare industry.
To advertise in the Health Care Hall of Fame supplement, contact Ilana Klein,
Advertising Director, [email protected] | 312.649.5311
Hall of Fame
Healthcare ransomware attacks
intensify in severity and sophistication
By Jessica Kim Cohen
SOMETIMES, ransomware can seem
like the flu. As soon as hospitals find a
defense, a new and more sophisticated
version appears—making it difficult for
hospital leaders to keep up.
Cryptic names like WannaCry, Petya
and SamSam—all variants of ransom-
ware—have become common points
of discussion in healthcare. But while
those ransomware campaigns targeted
businesses across industries, it’s becom-
ing more prevalent to see hackers tailor
their approaches within the healthcare
industry, finding new technical vul-
nerabilities to exploit at specific hospi-
tals and more closely customizing the GETTY IMAGES/MODERN HEALTHCARE ILLUSTRATION
phishing emails that deploy malware.
In 2018, healthcare organizations cific hospitals,” he said. “Every time that healthcare
were the fourth most-common target In healthcare, ransomware accounted
for ransomware attacks, making up 7% for more than 70% of all malware—“ma- comes up with a point
of attacks overall, after the technology licious software”—attacks, according to a defense against something,
(28%), consumer goods (15%) and man- data breach report Verizon released last these ransomwares get
ufacturing (11%) industries, according year. Ransomware attacks can come with modified and appear as a
to a report released last year by Cylance, a hefty price tag for their victims, with
a cybersecurity company that Black- hackers demanding thousands to mil- different variant.”
Berry acquired in 2019. But the com- lions of dollars in exchange for decrypt- Clyde Hewitt
pany’s researchers last year noticed an ing an organization’s computer files. Executive adviser
uptick in the sophistication of attacks tar- CynergisTek
geting specific industries, particularly in When a ransomware attack brings
healthcare and local governments, said down a hospital’s IT systems, it doesn’t
Josh Lemos, vice president of research just disrupt internal business process- cess to its IT systems. The attack brought
and intelligence at BlackBerry Cylance. es. It often hits critical medical systems down the system’s computer network
Because of the potential disruption like electronic health records or inter- for two days, during which facilities were
to patient care, “hospitals and pa- net-connected medical devices, forcing forced to reschedule some non-emer-
tient-serving environments” are more hospitals to divert patients to nearby fa- gency procedures and revert to using
likely to pay, he added. cilities. That pushes hospitals to want to paper—rather than electronic—medi-
John Riggi, the American Hospital As- pay the ransom, even if cybersecurity ex- cal records.
sociation’s senior adviser perts, including the Federal “Don’t immediately dismiss the op-
for cybersecurity and risk, Bureau of Investigation, dis- tion of paying ransom,” Hackensack Me-
said he’s also noticed an THE TAKEAWAY courage organizations from ridian Health CEO Robert Garrett wrote
increase in the “sophistica- Chasing new variants doing so. in an op-ed for Modern Healthcare in
tion and severity” of ran- of ransomware is a Just last month, Hack- December. “You may not have the lux-
somware attacks against never-ending job. ensack Meridian Health, a ury of time to consider rebuilding your
healthcare organizations. Tech officials say 17-hospital system based network. We believe it’s our duty to en-
“They now appear to be it’s critical to have in New Jersey, confirmed sure patient safety and protect our com-
highly targeted and highly foundational security it paid hackers an undis- munities’ access to healthcare.”
specific attacks against spe- practices in place. closed sum to regain ac- And ransomware isn’t static. New and
12 Modern Healthcare | January 27, 2020
emerging variants of the software arise
Too many threats
“We’re chasing new stuff all the time,”
A 2019 HIMSS survey asked
3.13 Too many emerging
respondents to rate how certain
said Sri Bharadwaj, chief information
and new threats
issues affected their ability to
security officer at UC Irvine Health in
3.12 Lack of personnel with
remediate and mitigate security
Orange, Calif., and co-director of the
leadership in healthcare privacy and
knowledge and expertise
security risk management certificate
2.89 Lack of financial
program at the University of Texas at
Austin’s McCombs School of Business.
on threats, mitigation and
Keeping track of those evolving threats
know-how with external parties
can be overwhelming, with healthcare
2.83 Too many application
leaders ranking the emergence of too
2.42 Network infrastructure
many new threats as the most chal-
too complex to secure
2.80 Too many endpoints
lenging barrier to mitigating security
(e.g., user devices,
incidents, according to a survey the 2.43 Lack of information-sharing 5 5 = Extreme challenge
2.37 Lack of
Healthcare Information and Manage- organization will
ment Systems Society released last year. 2.63 Lack of security
“We’re no longer in the era where a sin- 2.33 Too many users awareness training
gle person can humanly read everything for timely and effective
that’s happening,” said Lee Kim, director provisioning and 1
of privacy and security at HIMSS. She de-provisioning of
noted hospitals will often use security in-
formation management systems, which Source: Healthcare Information
and Management Systems Society 0 = No challenge at all
collect data, to help manage and identify
trends from that influx of information.
One of the latest ransomware variants “CISOs need to be plugged into not about cyberthreats, even if it sounds
to target healthcare is Zeppelin, first spot- just one source, but many sources,” old-fashioned, Kim said, adding that’s
ted in November by Cylance researchers. Hewitt said. He suggested the Health In- how she first learned about a new phish-
Rather than being designed to reach a formation Sharing and Analysis Center, ing technique in which hackers break
wide breadth of possible victims, Zeppe- the Department of Homeland Security’s into real business email addresses and
lin has seemingly “carefully chosen tech U.S. Computer Emergency Readiness insert themselves into existing email
and healthcare companies in Europe Team and InfraGard—a partnership be- conversations.
and the U.S.,” the researchers wrote. tween the FBI and the private sector—as But hospital leaders shouldn’t get
Zeppelin is largely distributed through examples. bogged down by trying to implement
spear-phishing, according to Lemos. UC Irvine Health belongs to multiple fixes to emerging cyberthreats piece-by-
Spear-phishing is a tactic in which cyber- information-sharing groups and works piece. While new variants of ransomware
criminals send malware via email while with outside companies that help to are a concern, getting basic security prac-
posing as a trusted entity, such as the re- manage network security, Bharadwaj tices in place is a necessary first step.
cipient’s employer. said. While that’s proved helpful, he ac- “Every time that healthcare comes up
Lemos declined to share examples knowledged that might not be feasible with a point defense against something,
of the types of healthcare organizations for smaller organizations. these ransomwares get modified and ap-
being targeted by Zeppelin, as Cylance “Not everybody has the dollars to pear as a different variant,” Hewitt said.
only discloses information on industry subscribe to all of the possibilities,” he Rather than focusing on a specific strain
verticals. said. The plurality of healthcare organi- of ransomware, it can be more helpful
While Zeppelin is just one recent ex- zations—25%—dedicated just 3% to 6% for CISOs to think about how to “protect
ample of ransomware in the industry, of their IT budgets to cybersecurity last overall against malware,” he said.
it’s indicative of hackers’ appetite for the year, according to the HIMSS survey. Standard practices for preventing
healthcare sector, noted Clyde Hewitt, malware infections include educating
executive adviser at cybersecurity con- One low-cost way to stay updated staff about how to avoid being tricked
sulting firm CynergisTek. on cybersecurity threats is to develop by a hacker; segmenting sensitive sys-
To stay up-to-date on emerging a “good network of CISOs that you can tems—like those storing patient data—
threats, many hospital chief information connect with” to share information, from the broader internet-connected
security officers, or CISOs, will rely on Bharadwaj said. “It’s good to get that in- network to limit malware’s ability to
alerts from federal agencies, cybersecu- formation on a daily or weekly basis, so spread; and conducting risk assess-
rity companies and information-sharing you know what to do.” ments annually, if not more frequently.
groups, which help to distribute timely Sharing information peer-to-peer is “If you don’t have the basics in place,
information about relevant cyberthreats. “still a very powerful” way of learning you’re a very soft target,” Kim said. l
January 27, 2020 | Modern Healthcare 13
Proposed guidelines on vertical mergers
disappoint antitrust experts
By Harris Meyer
That is what the agencies, as well as
state attorneys general, have examined
HEALTHCARE ANTITRUST experts
in recent vertical transactions. Those
are disappointed that the federal gov-
cases involved claims that acquisition of
ernment’s new proposed guidelines
on vertical mergers give little detail on firms, known as foreclosure.
physician groups by insurers or hospi-
how regulators will analyze deals be- tals may foreclose competition by mak-
tween organizations across the delivery ing it more difficult or costly for rivals to
system, such as hospitals and physi- obtain physician services.
cian groups. The cases showed a new willingness
While the Federal Trade Commission GETTY IMAGES/MODERN HEALTHCARE ILLUSTRATION by federal and state antitrust enforcers to
and U.S. Justice Department highlighted use seldom-cited vertical merger theory.
potential competition risks from vertical There is concern about Last year, the FTC announced a settle-
mergers in the long-anticipated guide- more unorthodox vertical ment with UnitedHealth and DaVita un-
lines, the first update since 1984, some deals like those between winding United’s acquisition of DaVita
elected officials and antitrust attorneys CVS Health and Aetna and Medical Group’s Las Vegas operations.
say the release still doesn’t give enough between UnitedHealth Colorado’s attorney general separately
information to step up oversight of phy- Group and DaVita. reached a deal imposing conditions on
sician practice acquisitions by hospitals, UnitedHealth’s acquisition of DaVita’s
insurers and private-equity firms. physician groups in Colorado Springs.
“They don’t really do much new, and firms competing head to head. Antitrust
they don’t refer at all to healthcare or use enforcers and courts traditionally have Also last year, the 8th U.S. Circuit
any healthcare-related examples,” said viewed vertical mergers as much less Court of Appeals upheld a U.S. District
Douglas Ross, a veteran antitrust attor- likely to threaten competition than hori- Court ruling blocking Sanford Health’s
ney at Davis Wright Tremaine in Seattle. zontal mergers. proposed acquisition of the multispe-
Vertical mergers create some specific But the new guidance included some cialty Mid Dakota Clinic in the Bis-
competitive risks including preventing surprises, according to Debbie Feinstein, marck, N.D., area. That antitrust case
rivals from accessing products from the a former top FTC official who heads Ar- originally was filed by the FTC and the
downstream merger partner, sharing nold & Porter’s global antitrust group. North Dakota attorney general.
sensitive business information about It proposed a safe harbor for vertical Researchers say there’s little evidence
competitors and enabling coordinated mergers if the merging firms have a com- that such consolidation has enhanced
interaction that hobbles rival firms. bined share in the relevant market of competition and produced benefits
The guidance update, released ear- less than 20%, and the “related product” such as lower costs and better quality.
lier this month, comes as concerns produced by the downstream partner is While FTC Chairman Joseph Simons
mount over the growing consolidation used in less than 20% of the market. said the agencies’ vertical merger policy
of hospitals and physician practices and That’s widely seen as an unusually “has evolved substantially” since 1984
the impact on prices and total health low threshold, given that antitrust en- and maintained that challenging such
spending. There is also con- forcers generally rule out mergers is “essential” for enforcement,
cern about more unortho- action on mergers affect- his Democratic colleagues were less en-
dox vertical deals like those THE TAKEAWAY ing less than 30% of a mar- thused about the new guidance.
between CVS Health and ket at the very least. Both Democratic FTC commis-
Aetna and between United- Some experts Feinstein also said the sioners abstained from voting on the
hoped the Justice
Health Group and DaVita. Department and draft has “no real discus- guidelines. In a written statement,
The federal government Federal Trade sion” of the standards by Commissioner Rohit Chopra said “they
has rarely challenged verti- Commission would which the agencies will are not supported by an analysis of past
cal mergers in any industry, signal tougher evaluate the ability of merg- enforcement actions, perpetuate an
in contrast to its more ag- scrutiny on vertical ing companies to reduce or overdependence on theoretical mod-
gressive policy toward hor- merger deals in the cut off the supply of down- els, and do not reflect all of the ways that
izontal mergers between future. stream products to rival competition can be harmed.”l
14 Modern Healthcare | January 27, 2020
Co-CEO structure at CommonSpirit
to end as Lofton announces retirement
By Tara Bannow
Lofton became the CEO of CHI in
2003. In a news release, CommonSpirit
COMMONSPIRIT HEALTH is the lat-
said Lofton chose to announce his re-
est health system to drop the dual CEO
tirement just before CommonSpirit’s
model after announcing last week that
first anniversary on Feb. 1 because it has
Kevin Lofton will retire this summer. Downers Grove, Ill.
When he steps down on June 30, a “strong foundation, a clear mission
Lofton will have served 17 years as and strategy, and a talented leadership
CEO of Catholic Health Initiatives, the team in place.”
predecessor organization that merged However, CommonSpirit has been
with Dignity Health on Feb. 1, 2019, to Under Lofton’s losing money since the merger, includ-
form Chicago-based CommonSpirit leadership, CHI grew ing a year-over-year operating loss of
Health, a massive not-for-profit system $227 million on $7.2 billion in operating
with 142 hospitals. from a 68-hospital, revenue in the first quarter of fiscal 2020,
Lofton, 65, currently shares CEO du- $6 billion enterprise which ended Sept. 30, 2019. Analysts
ties with Lloyd Dean, who will become to a $15.5 billion have pressured the health system to ex-
the organization’s sole leader. The two plain why progress toward cost savings
have distinct responsibilities within the organization in isn’t happening faster.
corner office, with Dean, the former 18 states at the time
CEO of Dignity, overseeing clinical, of the merger. Before joining CHI, Lofton served
financial and human resources and as CEO of Howard University Hospital
Lofton in charge of advocacy, compli- in Washington, D.C., and UAB Hospital
ance, IT, international business, legal, Lofton received $6.6 million in to- in Birmingham, Ala., as well as chief op-
philanthropy, system partnerships and tal compensation in CHI’s fiscal 2017 erating officer of UF Health Hospital in
governance. which ended June 30, 2017, according Jacksonville, Fla. He also served as the
“It has been an honor to share the cre- to Modern Healthcare’s executive com- AHA’s board chairman in 2007, regent at
ation of CommonSpirit Health with Kev- pensation database. large in the American College of Health-
in and there is no question that all of us care Executives and as a member of the
have appreciated the gifts that he brought Some health systems have dab- Executive Leadership Council. He has
forward,” Dean said in a statement. “I will bled in the co-CEO model following been included in Modern Healthcare’s
forever cherish the opportunity to have mergers, and experts have told Mod- 100 Most Influential People in Health-
been a part of this journey with him.” ern Healthcare it can be a potentially care list 15 times, placing No. 54 in 2019.
Under Lofton’s leadership, CHI grew successful short-term solution, so long Tessie Guillermo, CommonSpirit’s
from a 68-hospital, $6 billion enter- as duties between the two are well-de- board chairwoman, called Lofton an
prise to a $15.5 billion organization fined and the set-up doesn’t last more “exceptional leader” in a statement.
in 18 states at the time of the merger. than three years. “We have been lucky to be on this jour-
While at the helm of the organization, Advocate Aurora Health pared back ney under the leadership and expertise
he worked to increase eq- its CEO office from two to of both Kevin and Lloyd as they worked
uity in healthcare and re- one in 2019, slightly more side-by-side in the office of the CEO,”
duce health disparities. THE TAKEAWAY than a year after the or- she said. “We are confident that under
He was the founding chair ganization was formed Lloyd’s leadership we will be well-posi-
of the American Hospi- Kevin Lofton will through a merger, with tioned to transform how we deliver care
tal Association’s Equity of retire at the end Jim Skogsbergh emerging across the 21 states we serve.”
Care Initiative, which was of June. He has as sole CEO and Dr. Nick Lofton, who serves on the boards of
later joined by the Catholic served as co-CEO of Turkal leaving the organi- Gilead Sciences, Rite Aid Corp. and the
Health Association, Asso- it was formed in the zation. The health system Georgia State University Foundation,
ciation of American Medi- February 2019 still maintains two head- earned a master’s of health adminis-
cal Colleges and America’s CHI-Dignity merger. quarters, however: one in tration from GSU’s Robinson College
Essential Hospitals. Milwaukee and another in of Business in Atlanta. l
January 27, 2020 | Modern Healthcare 15
By Tara Bannow
U.S. HOSPITALS ARE WARNED to Nearly 900 people have contracted the virus,
prepare fi nancially and operationally to most of them in mainland China.
contend with a potentially deadly out-
break of the Wuhan virus that at dead-
line had killed 20 people and sickened
hundreds more in China. more of the costs. For the Wuhan virus, that sense of prevention and precaution
Although the respiratory virus out- the potential ripple eff ect is far bigger, home,” he said. Schaff ner said he would
break is in its early stages, it has already Wolf wrote. “An epidemic in a country be surprised if other hospitals were not
left a mounting human and econom- like China, where foreign citizens are implementing similar protocols.
ic toll, wrote Matt Wolf, who leads more likely to travel to the U.S. for leisure, Th e CDC fi rst warned medical provid-
accounting fi rm RSM’s healthcare val- only magnifi es the problem,” he said. ers to look out for patients with respira-
uation consulting group. Last week, the tory symptoms and a history of travel to
Centers for Disease Control and Preven- Beyond China and the U.S., the Wu- Wuhan. Th e agency is developing guid-
tion announced the fi rst domestic case han virus has spread to Japan, South Ko- ance for testing and managing the illness,
of the virus, technically called 2019 Nov- rea, Th ailand, France and several other including at home. Th e CDC plans to
el Coronavirus, in a Washington state countries. Th e Lunar New Year holiday distribute a diagnostic test soon that will
patient who had recently returned from began Jan. 25, which means many peo- speed up detection time. Currently, test-
Wuhan, China. Another case was con- ple in China will be taking time off and ing must take place at the CDC.
fi rmed in Chicago, the Associated Press traveling for the weeklong holiday. On Jan. 17, the agency implemented
reported. Nashville’s Vanderbilt University Med- screenings at airports in Los Angeles,
At deadline, more than 900 people ical Center announced last week it had New York and San Francisco and later
were confi rmed as having contracted changed its electronic prompts so that added them in Atlanta and Chicago.
the disease, most of them in mainland patients entering the hospital, emer- Originally thought to spread only
China, according to a dashboard com- gency department or clinics with a fever from animal-to-animal, the CDC says
piled by Johns Hopkins University. or respiratory symptoms will be asked there is growing evidence that limited
Wolf compared the outbreak to the if they have visited China recently or person-to-person spread is happening
deadly severe acute respiratory syn- have had contact with anyone who has. as well, similar to how the SARS virus
drome virus in 2002 and 2003, which Patients at risk of having the virus will spread.
spooked investors and prompted Chi- be placed in isolation, said Dr. William Given there have been relatively few
nese markets to plunge. He also cited the Schaff ner, professor of infectious diseas- deaths in China with respect to the
Ebola virus, which spread through West es and preventive medicine at VUMC number of infections, Schaff ner said
Africa from 2014 to 2016, kill- and a member of its infec- the Wuhan virus’ mortality rate is so far
ing more than 11,000 people. tion-control committee. much lower than that of SARS or Mid-
Ebola also killed 11 people in THE TAKEAWAY “It should off er reassur- dle East respiratory syndrome, both of
the U.S. U.S. hospitals are ance to people in the com- which were as high as 50%.
U.S. hospitals spent more being warned to munity that we’re aware of On the other hand, U.S. hospitals will
than $360 million prepar- prepare ﬁ nancially the events that are unfold- see thousands of fl u patients and many
ing for potential Ebola cas- and operationally for ing in China and now else- deaths from the illness, he said. “Fa-
es, with those designated as an outbreak of the where, including the U.S., miliarity … sometimes breeds noncha-
frontline centers shouldering Wuhan virus. and that we’re bringing lance,” Schaff ner said.
16 Modern Healthcare | January 27, 2020
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Health systems try
to trim waste to reduce
By Maria Castellucci MID THE DEBATE about how to slow rising healthcare costs, a group of 54
A healthcare organizations—many of them health systems—are working together
to develop a strategy to reduce waste 50% by 2025.
As part of the Institute for Healthcare Improvement’s Leadership Alliance,
which includes C-suite executives from MemorialCare, Providence and HealthPartners, the
leaders are calling on healthcare organizations nationwide to rethink how they do business
and to remove services that don’t
add value for the patient.
The alliance’s bold waste-reduc-
tion goal for the U.S. healthcare
system would save about $500 bil-
lion. Recent estimates about the
cost of waste ranges from $760 bil-
lion to $935 billion annually.
The alliance members are of the
mindset that healthcare organiza-
tions have a responsibility to de-
crease waste rather than waiting
for regulatory changes requiring
them to do so.
Helen Macfie and Chief
Medical Officer Dr. James
Leo are helping lead the
IHI’s push to reduce waste.
18 Modern Healthcare | January 27, 2020
“All of the talk and all of the rhetoric that is going on in Washington … we are just
moving the bag of money around and no one is striking (the money) inside that bag,”
said Helen Macfie, chief transformation officer at MemorialCare who is also leading the
IHI’s focus on waste. “Who best to help with that than those out here in the real world
doing the real work? We can wait for someone to try to legislate it or pay us less, in which
case that results in unfortunate side effects … or we can take these savings and return the
money to society, to people.”
Dr. James Leo, chief medical officer of MemorialCare and another leader of the IHI’s
effort, said the alliance wanted to establish a bold goal to elicit attention and hopefully
action from healthcare organizations.
“It requires we think differently. We are not going to get there by doing things the way
we always have,” he said. “By the alliance choosing that as a goal, it would require trans-
To monitor progress, the group is going to track overall U.S.
healthcare spending. In 2018, $3.6 trillion was spent on health-
care, up 4.6% compared with the year earlier. Healthcare ac-
counts for 17.7% of the gross domestic product.
“We actually know about a year later how much we spend Opportunities for reducing waste
as a nation on healthcare. If we are successful at this, we are A recent JAMA study estimated annual savings based
on waste-reduction interventions for five areas. Here is
going to see that (GDP) for healthcare come down by half a the percentage of waste that could potentially be
trillion,” Leo said. eliminated for each of the areas.
“There is waste in the system and if we can take it out, the
prices can drop,” Macfie said. “Helping to solve that problem is Potential savings as % of estimated waste
what we can do.” Failure of care delivery 56.3%
Just getting started Failure of care coordination 48.9%
The IHI Leadership Alliance was formed in 2013 but it only Overtreatment or low-value care 28.3%
began its focus on waste about two years ago. The alliance is
intended to be a opportunity for healthcare organizations to Pricing failure 37.9%
come together and share ideas.
“It’s a member-driven network,” said Jill Duncan, IHI exec- Fraud and abuse 36.7%
utive director. The organizations determine the goals, and the
IHI acts more like a facilitator, she added. Note: Percentage is based upon the highest estimated range of
waste and savings.
Although the alliance is mostly made up of providers, Huma- Source: Waste in the US Health Care System: Estimated Costs
na and Scan Health Plan, a Medicare Advantage insurer based and Potential for Savings. JAMA, Vol. 322, No. 15
in California, are also members.
Macfie and Leo came up with the idea for the group to be-
gin addressing waste after hearing a talk from economist David
Cutler during one of the alliance’s biannual meetings
The group has since laid out seven primary and 15 secondary drivers of waste that
organizations can tackle. That involves a systemwide approach to reducing waste and
includes decreasing harm and safety events, actively soliciting staff and clinician ideas,
engaging leadership and redesigning care to achieve the triple aim.
A 53-page analysis, called Trillion Dollar Checkbook, lays out how addressing each of
the drivers can cut nearly $900 billion in waste per year. Macfie
and Leo were co-authors of the report.
THE TAKEAWAY Not everyone agrees with the report’s ranking of the causes of
waste in healthcare. Prices and administrative costs, which are
The IHI Leadership
Alliance is calling recognized among the biggest drivers of waste, are included
on healthcare but are “not focused on,” said Dr. Karen Joynt Maddox, an as-
organizations sistant professor of medicine at Washington University School
nationwide to try of Medicine in St. Louis. “Because this is a provider group, they
to reduce waste in the have the least control there, so that decision is understandable,
U.S. healthcare but those are obviously huge sources of waste.”
system by 50% over Maddox added that the alliance is also “incredibly optimis-
the next five years. tic” in its calculation about how much focusing on certain ar-
eas can reduce costs. She pointed to the estimated savings from
January 27, 2020 | Modern Healthcare 19
Frontline staff are also driving the battle against waste at Northwell Health.
For instance, the 12-bed surgical intensive-care unit at Lenox Hill Hospital
in New York is working on cutting spending broadly across the unit by being
transparent about how much services and supplies cost. Now, the 20 most-
expensive supplies in the supply closet are labeled with their price. The idea
is to encourage staff to be more conscious about how many supplies they
take at a time, perhaps taking just one catheter instead of three now that
they see the price, said Dr. Daniel Baker, medical director of Lenox Hill. They
are still acquiring data to calculate the initiative’s impact.
The work on the unit regarding Tylenol is leading to cost savings. After
laying out the price differences between intravenous Tylenol, which averages
about $30 per use, compared with 5 cents to 30 cents for the pill form, staff
educated themselves about appropriate use of IV Tylenol. They found they
were using it when it wasn’t necessary, such as when a patient has a fever.
Bellin Health Since September, they have decreased the use of IV Tylenol, leading to
roughly $730 in savings each week.
Baker said he’s working on how Lenox Hill can spread the lessons the
For Bellin Health, a surgical ICU has learned to other units.
member of the Institute for Northwell typically starts small on new initiatives to see how well they
Healthcare Improvement work before using them broadly, said Dr. Mark Jarrett, chief quality officer
Leadership Alliance since for the system.
its inception six years
ago, the checklist woke Pricing assistance
up leaders to the issue of
A Northwell Health surgical unit saved an estimated $730 a week in part
diagnostic errors, said Jim
by disclosing prices on the IV and pill forms of Tylenol
Dietsche, chief operating
and financial officer of the Cost IV Tylenol: $30 per use, on average
Green Bay, Wis.-based
Pill form of Tylenol: 5 cents to 30 cents per use
errors can save the Change BEFORE: Average of 42 doses of IV Tylenol a week
healthcare system about AFTER: Average of 14 does of IV Tylenol a week
$100 billion a year through Source: Northwell Health data on Lenox Hill Hospital’s 12-bed surgical ICU
avoiding unneeded testing,
wrong treatments and
litigation costs, according to Providence
Each year, Bellin sets a
goal of spending about Scaling practices that work is the hardest part about working on waste,
$6 million to $8 million said Dr. Joanne Roberts, chief value officer at Renton, Wash.-based
less than the previous year Providence, which has 51 hospitals.
through waste reduction. Rather than calling it waste, Providence calls it variation. The work
The goal is maintaining involves finding ways to standardize care more. One way is by having
Bellin’s operating margin at centers of excellence perform highly complex procedures instead of at
around 4%. sites across the system.
Frontline staff are Roberts said there is evidence that patient outcomes will be better, and
encouraged to come it will also bring down costs because all the resources for those services
up with solutions where can be centrally located. It may also show perhaps too many doctors have
waste can be reduced in been hired for a procedure, she said.
their departments. Once Providence didn’t estimate what the cost savings would be for the work,
physicians became a part of but Roberts said the system is starting with heart surgeries to see how
alternative payment models it goes.
“Ten to 15 years ago the most lucrative thing a hospital could do
that showed them their cost
was heart surgery. It’s not true anymore,” she said. “Many of our heart
and quality data regularly,
programs actually lose money just because reimbursement has slowly
they got more interested.
changed and care models have changed.”
20 Modern Healthcare | January 27, 2020
alternative payment models as an example. The checkbook estimates $49.7 billion to
$82.9 billion annually in savings by extrapolating the experience at MemorialCare with
alternative payment models.
“The savings projections they use for alternative payment models, for example, have
not been seen in any current” alternative payment models, she said.
Macfie said the figures in the checkbook aren’t meant to be optimistic but conserva-
tive. “We weren’t trying to go big, that’s why we had ranges,” she said. “In the beginning
(of the checkbook) it says these are all estimates. Until you start saving, it’s a prediction.”
Health system executives who are participating in the alliance like its broad approach
n Reduce harm and
to waste, saying that’s needed to tackle the problem.
Waste “is not just one thing. It’s clinical variation; it’s operational waste,” said Cara
n Reduce operational
Hull, chief quality officer at HealthPartners, an IHI alliance member. “I think some-
times the word waste has been difficult for people to accept. Calling it waste but having
n Reduce clinical
such a broad scope is very helpful. It encompasses all of the things we are looking at in
terms of total cost of care and accountability and the Triple Aim.” variation waste
Hull and her colleague Kelly Logue, senior director of care affordability, went through n Actively solicit
the checklist from IHI and found other areas they could focus on such as waste tied to ideas for reducing
waste from staff
billing systems. Logue said she doesn’t think HealthPartners has too much adminis- and clinicians
trative waste, but it’s an area they’ll be focusing on more closely for opportunities to
improve. A recent JAMA study found administrative services was the main culprit of n Involve patients
in identifying what
waste, but there wasn’t much understanding of how to address it. matters to them
Insurers’ role n Redesign care
to achieve the
Health plans also have a role to play in waste reduction, although some of their tac- Triple Aim of better
tics have been controversial. care, better health
Humana declined an interview request, but the organization has been involved in and lower cost
some of the IHI alliance’s resources on waste. Dr. William Shrank, Humana’s chief med- n Engage leadership
ical officer, also was an author of the recent JAMA study on waste. to provide ongoing
Long Beach, Calif.-based Scan Health Plan got involved in the IHI Leadership Alli- sponsorship
ance because its partners MemorialCare and Providence were part of it. “It made sense
for us to do it together so we could impact the whole healthcare ecosystem,” said Dr.
Romilla Batra, chief medical officer of the insurer.
Scan Health already tries to cut waste by holding meetings and conferences with
provider partners to discuss practices that have led to lower spending and improved
outcomes. Batra said presenters at the meetings include C-suite leaders.
The alliance wants more health plan members to get involved. “The members see and
IHI sees an opportunity to partner with payers as they are a key piece of the flow of money”
in healthcare, Duncan said.
Although alliance members are embracing the focus on waste, Macfie said the goal is
for the message to spread so all healthcare organizations are doing this work. She said
the alliance is working on getting a grant focused on bringing more organizations to
share what’s working and what isn’t. “The only way we can get at waste is for everyone or
nearly everyone to get on board,” Leo said.
All alliance materials are also public so health systems that aren’t members can access
One barrier to more participation could be the still-widespread fee-for-service model
that doesn’t directly give incentives for reducing waste. But health system alliance mem-
bers argue that the status quo is changing even under the current payment structure,
pointing to shrinking reimbursement and implementation of programs that ding them for
The incentive to reduce waste “might not come straight from fee-for-service, it comes
from these programs that penalize you for your non-value activity and your fee-for-ser-
vice payment ultimately gets reduced,” said Jim Dietsche, chief operating and financial
officer of Green Bay, Wis.-based Bellin Health system. “Organizations that are still in
fee-for-service have to look at managing waste and variation because their payments
are being reduced.” l
January 27, 2020 | Modern Healthcare 21
By Harris Meyer ORETTO HEALTH & REHABILITATION in Syracuse, N.Y., was GETTY IMAGES
struggling with a nearly 65% turnover among certifi ed nursing as-
sistants, home health aides and licensed practical nurses, many
L of whom faced diffi cult challenges with transportation, child care
and other issues.
Th at’s a chronic and growing problem for nursing homes, home-care
agencies and hospital systems, which rely on these staff ers to provide the THE TAKEAWAY
bulk of hands-on, nonclinical care for patients. Good post-acute and home Long-term care
care are key factors in achieving quality outcomes in value-based care, but providers are
research shows that high turnover hurts quality. urgently developing
And turnover is expensive, with estimates that it costs at least $2,500 to re- ambitious strategies
place a direct care worker. for recruiting
Over the last three years, Loretto, a comprehensive post-acute provider and retaining
with 2,600 employees, has launched a bevy of programs to enlarge the pool personal care aides
in the face
of potential caregivers, including recruiting intensively from Syracuse’s large of growing shortages
refugee population. and high turnover .
A major goal is to help new hires better manage their fi nancial and life
issues and stay on the job. Improving pay and benefi ts also is considered
22 Modern Healthcare | January 27, 2020
Long-term care providers
scramble to hire and
retain personal care aides
crucial, though Loretto has a union workforce with com- Flat wages
petitive pay and perks. Wages for direct care workers changed very little
“We need to expand that workforce, and we need to be from 2008 to 2018, even as high rates of part-time
very innovative in how we approach talent development,” employment means median annual earnings were
said Loretto CEO Kim Townsend. With baby boomers ag- only $20,200 in 2017.
ing into retirement, “I’m concerned whether we’ll have
enough workers to do what needs to be done.” Median hourly wages 2008 2018
A severe shortage of high-quality caregivers could
crimp the ability of hospitals, physicians and health plans $13.38
to move patients out of higher-cost inpatient settings into $11.40 $11.77 $11.83 $12.07 $12.98
post-acute and home- and community-based care. That $10.33 $11.34
would hobble value-based care delivery.
Other long-term care providers also are urgently de-
veloping ambitious new strategies for recruiting and re-
taining these workers, who provide personal care such
as bathing, dressing, eating, toileting, housecleaning and Personal- Home Residential Nursing
administering medications. Nearly 20 million adults in
the U.S. need assistance with daily tasks due to physical, Source: Source: PHI report: “Caring for the Future: The Power
cognitive, developmental or behavioral conditions. and Potential of America’s Direct Care Workforce”
Of the 4.5 million direct care workers in 2018, nearly 90%
were women, almost 60% were people of color, and about
1 in 4 was an immigrant, according to a new report from PHI, a long-term care research
group, based on data from the U.S. Bureau of Labor Statistics and the Census Bureau.
Turning away patients
The inability to hire and keep direct care workers has even forced some nursing
home and home-care operators to downsize or turn away patients. In Wisconsin, a
new survey of not-for-profit nursing home operators found that lack of staffing has
reduced bed capacity by 14 percentage points, to 77%, with the vacancy rate for staff-
ing at nearly 20%.
The shortage of direct care workers is expected to get worse over the next decade as
boomers age and the under-65 workforce shrinks as a percentage of the population.
It’s estimated there will be 8.2 million job openings in nursing homes, home care and
residential care through 2028, according to PHI. Meanwhile, first-year turnover can
That doesn’t bode well for hospitals and health systems that are relying on post-
acute care providers to help in reducing and preventing readmissions.
“We know workforce vacancies have caused providers to limit admissions both in
nursing homes and assisted living because they don’t have enough people to provide
the care,” said Jim Williams, who recently retired as director of member enrichment
for LeadingAge Wisconsin, which represents not-for-profit aging services providers.
The crunch will be even more dire if the U.S. continues policies to reduce immigra-
tion, providers and independent experts warn.
“Any policy restricting the entry of immigrants is going to harm long-term care and
January 27, 2020 | Modern Healthcare 23
Direct care workforce growth and projections
Projected job growth, 2018-28
… it may not be enough to meet future demand as
While the number of direct care workers has
workers leave the profession through separations.
increased 52% overall since 2008 …
0 Employment, 2008-18 1 million 1.55 million 0 168,400 639,900 Separations 2.7 million
Employment Open positions
Source: PHI report: “Caring for the Future: The Power and Potential of America’s Direct Care Workforce”
will lead to further shortages and higher costs for those pervision, training and career opportunities, and the social
seeking care,” said David Grabowski, a health policy pro- status of direct care work are also essential.
fessor at Harvard Medical School, who recently visited a “We haven’t valued this workforce,” said Robyn Stone,
nursing home where the majority of caregivers were Hai- senior vice president of research at LeadingAge, which
tian immigrants. represents not-for-profit providers of aging services. “They
There’s a broad consensus that raising wages from the aren’t just taking people to the toilet. They are doing more
median hourly wage of $12.27, or $20,200 annually, to at sophisticated work such as observing changes in condi-
least $15 an hour is necessary to recruit and retain work- tion. Better wages can help, but the work environment is
ers. A number of states and cities have moved to do that, the most important ingredient.”
under pressure from labor unions. Fifteen percent of direct Getting medical professionals to recognize personal care-
care workers have incomes below the federal poverty level, givers as valuable members of the clinical team is key. “You
while 44% earn under 200% of poverty, according to PHI. can see the difference in patients when they have caregivers
Experts say it would also help to offer them health in- who are very engaged,” said Dr. Jennifer Reckrey, an asso-
surance and other benefits. More than 2 in 5 workers are ciate professor of geriatric medicine at the Icahn School of
enrolled in Medicaid or other public assistance programs, Medicine at Mount Sinai in New York City who visits elderly
based on PHI data. and disabled patients at home. “I’ve been surprised by how
“It’s a struggle paying rent, utilities and car insurance,” often physicians and nurses consider them an interchange-
said Thomasine Wilson, a veteran home-care aide in able pair of hands rather than someone providing nuanced
Richmond, Va., who makes $10.50 an hour with no health care. That respect piece is the first step.”
insurance. She’s working with the Service Employees In- Long-term care providers increasingly understand they
ternational Union lobbying Virginia lawmakers to raise have to do much more to expand the pool of high-quality
the state’s $7.25 minimum wage. “They’re paying us early direct care workers to serve the burgeoning population of
1970s wages and it’s 2020.” elderly and disabled Americans who need post-acute and
Improving pay and benefits is particularly necessary in long-term services and support.
the current tight labor market where unskilled workers can
earn as much or more in less demanding fast food or retail Policymakers, providers take action
jobs. But the pressure for higher wages is putting a squeeze Federal and state policymakers, as well as charitable
on long-term care providers, who rely heavily on Medicaid foundations, also are starting to step up. Congressional
payments that may not be adequate to cover higher pay. Democrats last fall introduced the Direct Care Opportunity
But a push for boosting Medicaid rates to cover higher Act to invest in recruiting, retaining and supporting workers
pay could lead to fewer services being offered. who provide daily living assistance to millions .
“Medicaid is always challenged by providers and other States like California, Minnesota, Pennsylvania and Wis-
stakeholders to increase reimbursements everywhere,” said consin have convened policy work groups to develop strat-
Matt Salo, executive director of the National Association of egies to respond to the looming workforce crisis. They have
Medicaid Directors. “So the call for a (higher) minimum focused on boosting compensation, improving training,
wage in long-term care is at odds with calls for increased expanding the scope of practice, and developing career
funding for dental care, primary care, hospitals, etc.” advancement opportunities. Wisconsin made $2.3 million
Better compensation isn’t the only issue. Improving su- available last year to train about 3,000 certified nursing as-
24 Modern Healthcare | January 27, 2020
sistants, though that program has expired.
Ascension Southeast Michigan, Cleveland Clinic and
But long-term care providers aren’t waiting for the gov-
Catholic Health in Buffalo, N.Y., have launched compre-
ernment. Loretto has launched a car-buying and credit
hensive programs to increase retention of CNAs and home
program, a free diaper bank, a free clinic, a fund to help in
financial emergencies and a prenatal-care program.
health workers through a $15 million, three-year grant
In addition, it offers peer mentors to help the employ-
from the Ralph C. Wilson Jr. Foundation.
Starting last June, they assigned workforce coaches to
ees, mostly women of color who come from low-income
give these direct care workers individual support with
backgrounds, acclimate to their new roles. A life coach is as-
challenges both on the job and in their personal lives.
signed to those who are particularly struggling, to connect
Ascension has aimed the program at 174 in-hospital
them with resources such as counseling for domestic abuse.
nurse’s aides in its seven hospitals,
Loretto also subsidizes employees
who want to go to school to qualify
though it may expand that to care-
for a better-paying job such as li-
givers in its long-term care facili-
ties. The coach will work with each
censed practical nurse, which pays
50% more than a CNA. Townsend Coaching assistance
caregiver for a year on personal and
said her organization over three years professional conduct, communica-
has hired more than 450 employees tion skills, financial literacy, conflict
under the program, with an 80% re- and stress management, and issues
tention rate, which she considers a like transportation and child care.
notable success. The workers initially came to-
Other providers, including hospital gether for a four-day curriculum,
systems, are following similar play- followed by six group sessions
books. The leaders of Providence, throughout the year.
which operates skilled-nursing fa- Before the program, first-year
cilities, assisted-living programs and turnover for nurse’s aides was more
home care in seven states, have fo- than 30%. Since the program’s start,
cused intensely on retaining direct that’s fallen to 7.4%, said Maureen
care workers by improving their on- Chadwick, chief nursing officer for
the-job experience. Ascension’s Michigan market. Be-
Large hospital systems are better Marie Tobin, a resident yond that, 20 of the aides have en-
able to offer higher pay, benefits, at the Morrow Home rolled in nursing school.
training and career advancement than smaller, indepen- Community nursing and “It gives me chills,” she said. “We
assisted-living facility, with
dent long-term care providers, and generally have some- two of her certified nursing are making a difference in folks’
what lower turnover. assistants, Jess Marten, lives. And seeing turnover plum-
Tim Cash, Providence’s chief human resources officer left, and Hailey Schueller, met is powerful. Retention is what
for the home and community care division, said his or- right, and Morrow CEO will drive improved outcomes and
ganization is facing a labor crunch partly because many patient experience.”
younger people apply for direct care jobs without having While there’s a lot of work ahead
a clear, well-informed commitment to that line of work. to improve compensation, support
As part of its stepped-up hiring and retention effort, Prov- and working conditions to expand the long-term care
idence is recruiting direct care workers from colleges and workforce, there’s no substitute for finding the right peo-
high schools, and paying for their training as CNAs. Later, ple. And it’s not a job that can be automated.
when they have more experience, Providence covers costs “We can teach technical skills,” Loretto’s Townsend said.
for higher-level training for those who want to become li- “But we always focus on people who have the desire to be
censed professionals like registered nurses. compassionate and meet the needs of others.”
Providence’s HR staffers make sure they frankly explain Jess Marten, a CNA at Morrow Home Community, a
to the recruits the nature of the job and check in with the nursing home and assisting-living provider in Sparta,
new hires at 30 and 90 days. Supervisors are trained to Wis., said taking care of the residents, many of whom have
work closely with the direct care workers to improve their dementia, is a hard, stressful job. The 37-year-old mother
performance and help them with personal issues. of two teenagers, who earns about $15 an hour after a de-
Another lure is that Providence pays close to $15 an hour cade of experience, says caregivers should be paid more
in some markets, and more than that in other areas. for this work.
Cash said his system’s efforts have improved first-year re- “To have the residents hug me halfway through the bath,
tention for direct care workers by 11.7 percentage points in all wet, and say thank you so much, you are very good at
the last two years, with an overall retention rate of 81% for that, it’s rewarding,” she said. “You laugh and joke and cry
those workers. “Staffing is the hardest challenge,” he said. and sing with them. Some days they break your heart.
“Every one of these things has to be maintained and recy- “People just call you a butt-wiper, but there’s so much
cled every year.” they don’t know. I’m definitely much more than that.” l
January 27, 2020 | Modern Healthcare 25
MERRILL GOOZNER Editor Emeritus
olls suggest most working-age Americans are satisfied with their employer-based
health insurance. That could easily change when this deficit-fueled economic
Pexpansion ends, as it inevitably will.
A poll conducted last fall by the Com- having to pay the first $1,400 expenses in healthcare costs has increased work-
monwealth Fund showed 48% of the out-of-pocket in an individual plan or ers’ take-home pay. Rather, their total
privately insured were “very satisfied” $2,800 in a family plan—has reached out-of-pocket spending continues to
with their healthcare coverage. Anoth- 46% of the privately insured. That’s up rise much faster than wages.
er 38% said they were “somewhat satis- from 17% a decade ago. While many This brings me to a final point. Some
fied.” Only Medicaid ranked higher. large employers subsidize health sav- healthcare economists claim that “out-
It’s understandable why most workers ings accounts when they make the of-pocket” costs aren’t a problem since
like their plans. They rarely use them. switch to a high-deductible plan, those they have remained stable at about 10%
It’s the inverse of the 20-80 rule, which funds are quickly exhausted by a seri- of total healthcare spending. But that ig-
predicts 20% of the population will con- ous illness. nores premiums, which, as we just saw,
sume 80% of healthcare services. That HSAs are particularly inadequate for are climbing rapidly; and it ignores that
means 80% of the public is responsible people with chronic conditions, which most out-of-pocket spending falls dis-
for 20% of spending. Indeed, half the now affect 4 out of every 10 Americans. proportionately on the very sick, who
population accounts for just 3% of total The high deductible must be paid anew have few options.
healthcare consumption—a mere $276 every year. We know what happens when sick
a year on average. people are confronted with higher co-
No employer should take solace from There’s also a hidden drain on pays and deductibles. They stint on care
satisfaction ratings that are based on un- household finances from rising pay- with little capacity to distinguish be-
familiarity with the system. That support check premiums for employer-based tween high-value and low-value care.
could evaporate in an instant. coverage. Last year’s Kaiser Family Employers across the country are
It’s already fraying. A large majority of Foundation employer survey showed aware of these problems. Over the past
these healthy breadwinners aren’t fret- the average premium for a family-based couple of years, the share of workers
ting over out-of-pocket spending since plan reached $20,576. Workers paid forced into high-deductible plans has
they pay so little. They’re far more wor- $6,015 or 30% of the total out of their plateaued. Some employers are forging
ried about the portion of premiums that paychecks. That’s 10% of the median innovative partnerships with providers
come directly out of their paychecks. household income. to work on lowering costs.
Moreover, recent trends in employ- That total has edged up over the last But when the economy hits its next
er-based coverage have put millions decade as employers shifted a growing rough patch, as it inevitably will, isn’t
of families at risk of unaffordably high share of total costs onto workers. Their it likely that employers, who already
expenses. They are joining the millions premiums shot up 7.1% a year on aver- subsidize public programs, will resume
more—the 20% of people with serious ill- age over the decade compared with just shifting more of their own costs onto
nesses—who are already feeling the pain. 4.8% for the employer share. their workers? That’s when we’ll find out
The number of employees in high- Enough numbers. The bottom line is if the public is truly committed to em-
deductible plans—defined in 2019 as simple. None of the recent moderation ployer-based coverage. l
26 Modern Healthcare | January 27, 2020
Achieving significant healthcare reform requires
a congressionally mandated commission
By Randy Oostra
s CEO of ProMedica, an Ohio-based integrated healthcare network, it is
beyond disturbing whenever I read about more research demonstrating that
A Americans comparatively live shorter lives and experience more disease—
despite our spending vastly more for healthcare than any other country.
We desperately need healthcare ex- Randy Oostra sum, improve population health, re-
ecutives to step up and lead a wholesale is president and duce spending growth and address the
redesign of how care is delivered and CEO of Toledo, social factors that increasingly are un-
paid for in this country. Ohio-based derstood as major factors in affecting
As readers are likely aware, for the first ProMedica. health outcomes.
time in 100 years life expectancy has de- It is currently our view that such a
clined for three consecutive years. The commission would need to address five
number of non-elderly uninsured has principles: healthcare coverage must
been increasing since 2017 and is now be universal and affordable; emphasis
nearly 30 million. Nearly half of those must be placed on primary care, behav-
insured are underinsured, the same per- The evidence dictates an urgent need ioral health and healthy aging; social
centage as before passage of the Afford- for major healthcare reform. service supports need to be integrated;
able Care Act. A widely reported 2018 Over the past year, representatives healthcare spending must be made ef-
Federal Reserve poll found 40% of adults from ProMedica and several other ficient, meaning of increasingly higher
could not afford an unexpected expense healthcare networks throughout the value, measured as outcomes achieved
of $400. A more recent Gallup poll found country have held preliminary meetings relative to spending; and finally, but by
that 13% of adults, or 34 million Ameri- with germane congressional commit- no means least, the healthcare work-
cans, admitted knowing someone who tees and leadership offices advocating force must meet the demand for ser-
died because they could not afford nec- for a congressionally mandated national vices, especially in serving care needs in
essary medical care. healthcare commission. rural areas and in behavioral health.
Healthcare spending, currently at There are numerous examples of We will continue to meet with con-
more than $3.6 trillion, is projected to congressionally created commissions. gressional staff through this session.
reach $6 trillion by 2027, or one year af- A November report from the Congres- Our hope is that leaders independent
ter bankrupting the Medicare trust fund. sional Research Service identified well of party affiliation will appreciate—for
Nearly $1 trillion of that spending is con- over 100 established since 1989, includ- at least three reasons—the importance
sidered waste. (See related story, p. 18.) ing the 1997 National Bipartisan Com- of, and the necessity for, a healthcare
Pay-for-performance models, such as mission on the Future of Medicare, reform commission: The failure to pass
accountable care organizations and bun- which helped lead to passage of Medi- surprise-billing legislation in 2019 again
dled-payment arrangements, have yet to care Part D legislation in 2003. While demonstrates Congress’ difficulty in
come close to bending the cost curve. commissions have had mixed success, setting aside partisanship; polling data
We continue to measure quality with- the stakes have never been higher. We show healthcare is the most import-
out accounting for value or outcomes see no alternative. ant issue voters take into consideration
relative to spending. Social service when evaluating 2020 candidates; and,
supports remain largely unaddressed. A commission—preferably time-lim- as genuine and passionate as Medicare
Healthcare disparities continue to per- ited and comprised of bipartisan ex- for All campaign pledges are, successful-
sist. All this and more leaves physicians perts representing the diversity of ly legislated healthcare reform should be
and other clinicians with unprecedented healthcare and social service provid- methodically examined.
rates of burnout, major depressive disor- ers—would make policy recommen- We invite your participation in joining
der and unacceptable rates of suicide. dations to Congress that would, in us in this effort. If not now, when? l
January 27, 2020 | Modern Healthcare 27
Too much of
too, are for the most part paid on
the cost. And often they wouldn’t be
FFS models, thus incentivizing them
the most effective choice.
is out of providers’ control
on volume instead of quality and
America is at a turning point in
The article “MedPAC recommends
efficiency. Even under ACO models,
healthcare. Are we going to continue
data suggest there is minimal impact
with open access or are we moving
3.3% raise to hospitals in 2021”
on total costs.
(ModernHealthcare.com, Jan. 16)
to a socialized model that offers
Second is patient autonomy. We
healthcare to all? I seriously don’t
noted: “The Medicare Payment
think most Americans are ready for
Advisory Commission voted to
can educate, counsel and follow
European and Canadian models of
up with home care, but patients
recommend increasing payments
healthcare in which a higher power
ultimately choose how they want
to hospitals, but it wants them to costs of care is flawed. Physicians, access to these meds, regardless of
rely less on fee-for-service and boost to manage their health. Despite decides who gets care and when.
quality and efficiency.” aggressive initiatives, we continue to Denise Adema
The concept of hospitals being experience epidemic obesity, Type Fort Myers, Fla.
accountable (penalized) for the 2 diabetes and smoking-related
entire cost of patient care is ludicrous conditions associated with lifestyle
for a variety of reasons. choices. We don’t live in a police
First, absent hospital-owned state, and cannot legislate behaviors. A focus on prevention
physician practices with very tight Finally, there’s the cost of drugs. is imperative
parameters on practice patterns, the With the unbridled advertising of the to achieve ‘wellness equity’
assumption that hospitals have any latest, greatest med on every single
measurable control over outpatient TV program, patients are demanding Regarding the Breaking Bias
column “Racism in the U.S. remains
pervasive; it must be recognized and
confronted” (Jan. 20, p. 24), I applaud
the sentiment and the effort; this
Send nominations must be a priority.
Investing in being more proactive
for 50 Most in prevention is key to what I call
Influential Clinical “wellness equity.” The article warns
Executives “we will continue to see black
women dying from pregnancy-
related complications at three to four
Modern Healthcare is accepting nominations for its annual ranking
times the rate of white women, and
of the 50 Most Influential Clinical Executives. The program, previously
black infants dying before their first
the 50 Most Influential Physician Executives and Leaders, is now open
birthday at more than twice the rate
to all licensed clinicians with an executive title of senior vice president of white infants.”
or higher. But there is so much more to the
Judging will focus on actions the nominee took in the past year to stats and information such as the
help the organization achieve or exceed financial, operational and fact that black women, on average,
clinical goals; steps the nominee has taken to establish or contribute start prenatal care later than whites.
to a culture of innovation and transformation (local and national levels); Providing such information to
and examples of how the nominee has addressed the Quadruple Aim the population at risk as well as a
of improved community health, a better patient experience, lower costs focused effort to offer prenatal care
and reduced clinician burnout. will provide a better chance for
The deadline for nominations is March 2. A ballot with 150 names will full-term and healthy-weight births.
be posted for voting shortly after the nomination period closes. Modern Minorities should not accept at face
Healthcare’s senior editors will make final determinations on the ballot. value the despairing information
Judging for the final ranking of the 50 Most Influential will be based on and know the whole story of how
readers’ votes as well as input from Modern Healthcare’s senior editors. not to become a statistic. You are not
For more information on required materials and to submit a dying because your skin is black.
nomination, please visit ModernHealthcare.com/50Most.
28 Modern Healthcare | January 27, 2020
Announce your Promotions, New Responsibilities, Retirements or New Hires
Eden Prairie, MN
Impact Advisors announced that
Dr. Amar Desai, previously
president of HealthCare Partners,
John Klare has joined its team
will now serve as president and
to lead the firm’s Performance
Excellence service line, an Optum,
chief executive officer of Optum
extension of its management California. In this role, he is
consulting services designed to responsible for all care delivery
help clients improve their operating and organizations in California including
financial performance. Klare has more than HealthCare Partners, Monarch HealthCare,
30 years of experience in the healthcare North American Medical Management
industry with proven success at previous (NAMM) California, and AppleCare.
organizations where he has grown both Together, these groups represent one of the
service offerings and associates, creating largest integrated care delivery networks in
high-performing practices. the country, comprised of both employed
clinicians and affiliate providers – all
dedicated to providing high-quality
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AI helps Nebraska
hospital reach patients
before they fall
By Jessica Kim Cohen
a patient was getting out
A PATIENT is tossing and turning in of bed, so they could re-
her bed. She sits up, maybe moves the spond with enough time
Cameras mounted on the walls of the
covers around. It might seem like a nor- to prevent a possible fall.
inpatient rehab unit allow an AI system
mal interruption during a night’s sleep, About three years ago, Bryan Health to watch for cues that a patient is getting
but it’s enough movement for an arti- began collaborating with Ocuvera, a ready to leave their bed.
ficial intelligence system to trigger an company that uses AI to predict when a
alert that lets nurses and technicians at patient is about to leave their bed.
Bryan Medical Center know the patient For patients deemed at risk of getting tient privacy, according to Steve Kiene,
might need help—and they should up from bed unattended, nurses mount Ocuvera’s CEO. “The data is not person-
check out the situation, stat. a camera on the wall across from the bed. ally identifiable,” Kiene said. “You’re not
The concern for staff at the Lincoln, The AI system—trained on 200,000 hours getting a high-def video of a patient.”
Neb., hospital’s inpatient rehab unit is of video—reviews the patient’s move- Bartelt said the inpatient rehab unit,
that a patient might be trying to get out ments, watching for cues like moving a which now has more than a dozen of the
of bed. And without the proper support, blanket or changing positions. company’s cameras, is working on mea-
they’re prone to fall. The AI system then pushes an alert to suring improvements in patient falls
Patient falls account for roughly 10% the smartphones of nurses and techni- over time. So far, she said the hospital
of problems documented in the ECRI cians on duty. The alert includes a video has noticed a “steady decline in the last
Institute’s database of patient-safety in- stream to help the staffer decide whether there years of our unattended falls.”
cidents, said Robert Giannini, an ECRI the patient needs help. It’s difficult to tie how many of those
patient-safety analyst—making them are linked to the AI system, as Bryan
the second most-common event report- That video component makes sys- Medical’s unit has continued using tra-
ed by providers. tems like Ocuvera’s look “somewhat ditional bed-exit alarms alongside the AI
That’s a serious risk to patient safety— promising,” said Ismael Cordero, a senior system. But the AI tends to alert nurses
with roughly one-third of falls among project engineer at the ECRI Institute. An roughly 2 minutes before a patient gets
hospitalized patients resulting in an in- AI camera system could possibly provide out of bed, and Bartelt said it takes nurses
jury—and it carries a financial risk, too. more sophisticated analysis than tradi- just 1.5 minutes to respond to an alarm.
The CMS doesn’t reimburse for costs at- tional bed-exit alarms—pads or sensors “If I can have 30 to 45 seconds advance
tributed to patient falls, which can leave spread across a patient’s bed, which alert notice that one of my patients is trying to
hospitals on the hook for thousands of nurses when pressure is lifted from them. get up without calling for help, that’s go-
dollars if a patient sustains an injury. “It’s not just telling you there’s been ing to make a huge difference,” she said.
“Inpatient rehab facilities have a high a shift in weight, but actually giving you Cordero noted that health systems
concentration of patients either with a an image of the patient’s movements,” interested in a predictive alert system
functional disability and/or a cognitive Cordero said, noting weight-based should consider the additional cost,
disability, so (patients) have a very high alarms could be fooled by a patient since many hospital beds come with
fall risk,” said Christie Bartelt, nurse turning over or reaching for a book. built-in exit alarms.
manager in Bryan Medical’s inpatient Ocuvera’s system uses Azure Kinect, Ocuvera charges for each hour that
rehab unit. Since all patients in the unit a developer kit from Microsoft Corp., one of its cameras is used, and there’s
are at moderate to high risk for falls, which includes a depth camera. Unlike no capital cost to purchase the system,
they’re asked to call a nurse before get- a traditional camera, a depth camera Kiene said. He declined to share what
ting out of their bed. provides a black-and-white outline of a the per-hour fee is, as the startup is still
But not all patients remember to do scene based on the distance of objects— “fine-tuning” pricing for the system, but
so. For those patients, the nursing team such as the patient—without identifying said it’s meant to be a “fraction” of what
needed to figure out how to predict when details. That’s important to maintain pa- a human sitter would be paid. l
30 Modern Healthcare | January 27, 2020
voters’ list of concerns
The 2020 election season officially gets underway next Monday with the Iowa Democratic
caucuses. The New Hampshire primary follows on Feb. 11. Then it’s off to Super Tuesday on
March 3. Early polling continues to show that healthcare will weigh heavily on voters’ minds as they
cast their ballots, especially the cost of care.
Gallup asked voters if it is the government’s
responsibility to ensure people have
Gallup felt healthcare was
extremely important …
56% Healthcare costs top of those surveyed by
54% 52% 54%
50% 50% 52% 51%
… but the breakdown by party shows a partisan divide
46% 44% 45% 45% 45% Democrats 49%
42% 42% 42%
% saying yes % saying no
’10 ’11 ’12 ’13 ’14 ’15 ’16 ’17 ’18 ’19
of those surveyed of those surveyed by in the VICE News/Ipsos survey said
by Gallup were VICE News/Ipsos said they would be more likely to support
73% dissatisfied 75% they were concerned 55% Medicare for All if it meant they would
with the total about being able to not have to pay for healthcare services
cost of healthcare afford healthcare or prescription drugs
Percentage of respondents 57% White Top Out-of-pocket costs 64%
in the VICE News/Ipsos healthcare Prescription drug costs 57%
survey who said healthcare 39% Hispanic ssues Quality of healthcare received 44%
costs were the leading
problem facing the 30% Black Difficulty in getting affordable 40%
country right now or sufficient insurance
Source: Morning Consult/Bipartisan Policy Center
Sources: Gallup healthcare system polling, Morning Consult/Bipartisan Policy Center 2020 Healthcare Priorities report, VICE News/Ipsos Survey for the Brown & Black Forum
GETTYIMAGES/MODERN HEATHCARE ILLUSTRATION January 27, 2020 | Modern Healthcare 31
‘There is always a way
to find common ground’
Hospitals took some bumps and bruises last year as public angst over surprise billing, MH: At the J.P. Morgan
patient lawsuits and the high cost of care swelled. Many of those policy debates will Healthcare Conference
continue in 2020, but American Hospital Association Board Chair Dr. Melinda Estes a couple of weeks ago,
wants consumers and policymakers to hear a broader story. Estes, the 47th physician to several well-performing
serve as board chair of the 122-year old organization, wants to elevate the perception of health systems talked about
hospitals in public discourse. The CEO of St. Luke’s Health System in Kansas City, Mo., their plans to expand their
is also focused on spreading innovation across the industry. Estes spoke with Modern footprints or grow their
Healthcare Managing Editor Matthew Weinstock. The following is an edited transcript. innovation programs. How
concerned are you about
independent and rural
MH: One of your priorities with our patients, with many communities are hospitals being left behind?
as AHA board chair is to our neighbors, where they often the largest employer,
strengthen the perception live, and looking at other providing good jobs in the Estes: We are worried
of hospitals with both factors that impact their community and are a driver because certainly all
policymakers and consumers. health. The second piece is of the health and vitality of a hospitals are not in the
How can the AHA work on that? trying to continue to elevate community. same position. When we
hospitals and health system And when you look at talk about innovation,
Estes: One of the things leadership into national some of the conversations we tend to talk about
that I’d like to do this year policymaking roles because that are going on in the disruptive innovation or
is work together as a field we need to be sure that as country, one of the things transformational innovation
to shed light on and shape healthcare policy is being that worries our patients and we immediately go to
the conversations about made, that our patients’ is will their hospital be the technology sphere. …
how all of our members— needs are at the core of what there for them when they The flip side of that is there’s
big and small, rural and we’re trying to accomplish. need them to be. There’s an a lot of process innovation
urban, teaching, specialty opportunity then to tell that that does not require large
hospitals—are working MH: Do you feel like some part of the story. dollars, does not require
toward the dual missions of that messaging gets lost tremendous technology
of providing great care because of the debate over MH: Do you mean be there in investment. That’s one
while helping to move our surprise billing or hospitals terms of the financial struggles of the things the AHA is
country’s health system suing patients? some hospitals are facing? working on with our Center
forward. for Health Innovation and
There are so many Estes: What happens Estes: Correct. Given the at conferences for rural
examples on a daily basis sometimes is when you turbulence that we find in hospitals—how do we
of the good work that have an issue like surprise our industry, I think many scale that lower-level
hospitals are doing in billing that takes front of our patients understand innovation to a broader
their communities. And and center, you lose some that hospitals are a bit group of the field?
increasingly not just looking of the other conversation overwhelmed at times and
at the H as the four walls around the day-to-day want reassurance that we MH: The center is 2 or 3 years
of a hospital, but the H as work that’s being done, the will be there to provide the old, right?
health in the community, impact on communities, care they need when they
reaching out and engaging the fact that hospitals in need it. Estes: It is 2 years old.
32 Modern Healthcare | January 27, 2020
“We need to be sure that as healthcare policy is being made, that our
estimator tools … I think
patients’ needs are at the core of what we’re trying to accomplish.”
there’s real opportunity
for us to take the good
work that’s been done and
MH: What are your perceptions
particular is that technology,
officer is a member. I think
of how it has evolved?
much of the conversation
particularly the electronic
MH: Are there areas around
price transparency where
health record, is both a
Estes: I was fortunate
around that table right now
has been around surprise
godsend and a burden. The
to chair the inaugural
you think there is room to
work with the CMS?
innovation center leadership
billing and putting together
third one is this notion that
a series of principles that we
as we take on more and more
group. I might highlight one
risk, are there things that
can, as a field, agree to.
Estes: My personal bent
thing, which is the design
But this ties in very much
we, as providers, can come
is that there is always
studio work that is being
a way to find common
together to do to approach
to the work that has gone
done. There was a desire
that in a little different way?
to tackle two or three big physicians and clinicians in St. Luke’s chief financial have very good price-
on at the AHA for a very
problems that impact all of long time around value and when both parties have
us in healthcare. MH: How do you think affordability. Affordability the same goal, which
One is behavioral health about the debate over price in my view translates often is to move American
networks because there transparency in relation to the to what a consumer pays out healthcare to provide
continue to be a shortage perception of hospitals with of pocket. Given the number the best care for our
and a maldistribution of policymakers and consumers? and complexity of insurance patients that we can. How
behavioral health resources arrangements and other some of the regulations
in our country. The second Estes: Transparency is an arrangements, it has not have been proposed has
is the usability of the important issue and the been very easy for us to tell been problematic, but I
electronic health record. One AHA has put together a price somebody what they have certainly believe that there
of the things we hear from transparency task force; to pay. A lot of our members will be common ground. l
There’s more to learn about
advancing your community’s health.
June 2, 2020 | Salt Lake City, Utah
Learn more: ModernHealthcare.com/SDH
January 27, 2020 | Modern Healthcare 33
Largest healthcare investment banks
Ranked by amount of loans underwritten in 2019
($ IN MILLIONS)
Mitsubishi UFJ Financial Group
2 BOOKRUNNER LOANS UNDERWRITTEN NUMBER OF LOANS MARKET SHARE
3 Bank of America 37,208 86 11.0
4 JPMorgan Chase & Co. 35,867 105 10.6
5 Citigroup 18,492 44 5.5
6 Wells Fargo 17,430 54 5.1
7 Barclays 13,564 47 4.0
8 BNP Paribas 10,623 30 3.1
9 Deutsche Bank 10,211 37 3.0
10 Mizuho 9,039 33 2.7
11 HSBC Bank 8,811 34 2.6
12 Goldman Sachs 7,568 40 2.2
13 Credit Suisse 7,207 26 2.1
14 PNC Bank, N.A. 5,700 19 1.7
15 Sumitomo Mitsui Financial Group 5,385 38 1.6
16 Crédit Agricole CIB 4,711 25 1.4
17 U.S. Bancorp 4,144 9 1.2
18 RBC Capital Markets 4,020 21 1.2
19 SunTrust Robinson Humphrey 3,989 22 1.2
20 Jefferies Financial Group 3,792 25 1.1
For more information on the data used to compile this chart, contact Dealogic,
1345 Avenue of the Americas, 49th Floor, New York, NY 10105; Dealogic.com; [email protected]; 212-577-4431
Information in this chart may be subsequently revised at the discretion of the editor.
For more information on our research, contact Megan Caruso at 312-649-5471 or [email protected]
FOR MORE charts, lists, rankings and surveys, please visit modernhealthcare.com/data.
34 Modern Healthcare | January 27, 2020
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January 27, 2020 | Modern Healthcare 35
squashed in Utah
exual innuendo apparently doesn’t play in
SUtah. At least not in taxpayer-funded public health
Condom wrappers with cheeky phrases that put
a sexy spin on state pride met a quick demise in the “This is the place” against a bed in the background; and
Beehive State as Gov. Gary Herbert ordered the state “Enjoy your mountin’.” The condoms were part of the
health department to stop distributing them as part of an department’s “HIV and Me” awareness campaign.
HIV-awareness campaign. While sexual innuendo may meet resistance in Utah,
The intervention came hours after the designs it was rewarded here at Modern Healthcare in the 2019
became public this month. Herbert, a Republican, said Healthcare Marketing Impact Awards.
he understands the importance of educating residents SPM Marketing & Communications garnered the Gold
about HIV prevention, but doesn’t approve using sexual Award for Integrated Campaign/Advocacy for its “Save
innuendo in a taxpayer-funded campaign, the Associated Yours” sexually transmitted infection campaign for the
Press reported. Chicago Department of Public Health, with ads urging
Among the slogans the governor objected to were: “Save the buns,” “Save the wieners” and “Save the
“Greatest Sex on Earth,” a spin on the state’s license-plate kitties” followed by “When you get tested for STIs” with
ski slogan “Greatest Snow on Earth”; “SL,UT,” a play on pictures of the relevant foodstuffs (and pet).
abbreviations for Salt Lake and Utah; “UINTAH sex?”; Obviously, Gov. Herbert wasn’t one of the judges. l
If it’s winter, it means the crows
have descended on Mayo
hen winter creeps into referring to the patients who come to Mayo for treatment
WRochester, Minn., it’s time. from around the world.
Time for thousands of crows. The crew tries “to keep the downtown area free of the
In mid-November they descend en masse on the city’s mess that they create,” Michael Schaber, park operations
downtown (and Mayo Clinic campus) splashing souvenirs of manager for the city, told Outliers via email. Schaber
their presence on sidewalks, vehicles, streets and buildings. said they “utilize crow distress calls, blank pistols, high-
In other words, crow poop. powered lasers and lights, airsoft guns and any other
Fighting the problem created by this murder of crows (as method that may keep the crows from roosting in the
such clusters of the birds are called) has become a $40,000 downtown area.”
line item in the city’s budget. Rochester along with other Schaber said that because Mayo Clinic is a private
cities use nonlethal means to fend off the winged invaders, institution, it handles the foul fowls on its property.
including a special crew known as the “crow patrol,” “To keep the number of crows at bay around our
according to a recent story on NPR. campus, Mayo Clinic does use motion-activated
While congregating crows are a problem in other cities, ultrasonic devices to discourage crows from roosting
Rochester’s main reason for trying to discourage the birds in the trees in high-traffic areas,” Mayo Clinic said in an
is the Mayo campus, crow patrol member Sally Vehrenkamp email. l
told NPR. “It’s very disgusting for them to walk in,” she said,
36 Modern Healthcare | January 27, 2020
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