The Daily Beat

What you should care about in healthcare today, from the editors of Becker's Hospital Review

Does cutting back charity care put hospitals tax exemption at risk?

In the first of what we hope will be many podcasts exploring the reporting behind Becker's Hospital Review cover stories, Financial Reporter Ayla Ellison sits down with Editor in Chief Lindsey Dunn to discuss charity care cutbacks by hospitals across the country, why the cuts are occurring even in states that opted not to expand Medicaid, and if the hospitals worry the reduced charity care could impact scrutiny over tax exempt status.

Read the cover story, "Is this the end of hospital charity care?"

Download the mp3 file of the podcast, or listen below.


How Geisinger engages patients


Alistair Erskine, MD, chief clinical informatics officer at Geisinger Health System in Danville, Pa., oversees how the health system uses clinical information to leverage evidence-based practices across the care continuum. Part of his role involves working to make clinical data available and actionable for clinicians, as well as patients.

As Geisinger and other health systems across the country work to improve population health, ensuring patients receive evidence-based interventions is critical. Getting data to physicians in near real-time helps to facilitate this. Geisinger believes this data should also be shared with patients, whose engagement is critical to the ultimate success or failure of preventive and disease management efforts. As a result, the health system recently launched two innovative programs to educate and engage patients about their care, which Dr. Erskine discussed at the Healthcare Leadership Forum conference held in Chicago this week.

Last summer, the health system gave more than 100,000 of its patients access to their entire clinical note through the MyGeisinger online patient portal. The program was an extension of the Robert Wood Johnson Foundation's OpenNotes pilot, which Geisinger participated in.

Today, the portal gets 11,000 hits a day and is used by 35 percent of patients, said Dr. Erskine.

Initially, some physicians were resistant to making the notes so open. For example, a patient would be able to see if a physician noted he or she was 'noncompliant.' However, most physicians have come around to appreciate the move, and many have reported patients asking questions that they may not have in the past, based on information they read in their record.

The opening up of patient records has also forced physicians to be more descriptive in their notes, which benefits both the patient and other caregivers who may reference the note. "What we're really expected to produce is a clinical receipt, not a clinical note," he said, describing the approach to notes most physicians had prior to OpenNotes. Now, physicians have more incentive to create a true clinical note.

Patient education with iPads
Geisinger has also brought a technology-forward approach to patient education. Patients undergoing certain procedures get to take home an iPad, usually for about a week, with educational information specific to their procedure. The information helps prepare them for the procedure and aims to smooth the transition to care after the procedure.

The iPad was attractive because it would allow clinicians to get interactive educational information to patients. However, the team ran into a bit of a roadblock in their efforts to get them into patients' hands: regulatory concerns. Geisinger's attorneys worried the iPads could be construed as an inducement. After meeting with CMS and a "whole series of other entities," the loaner iPads were cleared. As long as the patients didn't keep them, and use was limited to medical/educational reasons, Geisinger could move forward.


Dr. Farzad Mostashari: Why hospital leaders should embrace one of the PPACA's most promising provisions


Not that long ago, McAllen, Texas, seemed to be the epitome of a problem that has plagued the U.S. healthcare system for years — healthcare costs were soaring, but people weren't getting any healthier.

Healthcare costs in the mid-sized community of McAllen were some of the highest in the nation. In 2006, Medicare spent about $15,000 per beneficiary in McAllen, twice the national average and $3,000 more than the area's per capita income.

All that money was buying more care but not better care, found New Yorker staff writer Atul Gawande, MD. Based on data from Medicare and commercial payers, he discovered McAllen patients were getting more of everything, from diagnostic tests to surgeries to in-home nurse care, than patients in neighboring and demographically similar El Paso, Texas.

But all the extra procedures weren't adding up to better care quality. Patient outcomes were generally worse than they were in El Paso, a city in which Medicare spent half per beneficiary what it spent in McAllen, and McAllen hospitals were scoring worse on most of CMS' hospital quality metrics than their El Paso counterparts.

In his 2009 article "The Cost Conundrum," Dr. Gawande argued the problem in McAllen, and across the country, was a reimbursement structure that paid more for treating disease than preventing it, coupled with a general lack of accountability among providers for the cost and volume of care delivered.

Upon publication, Dr. Gawande's article caught the attention of President Barack Obama and helped guide his healthcare reform efforts. "He came into the meeting with that article having affected his thinking dramatically," Sen. Ron Wyden (D-Ore.) told the New York Times in 2009 about a meeting with the President. "He, in effect, took that article and put it in front of a big group of Senators and said, 'This is what we’ve got to fix.'"

One of the provisions of the resulting Patient Protection and Affordable Care Act was the creation of the Medicare Shared Savings Program. The Shared Savings Program was designed to reverse the trend of rising costs and slipping quality in places like McAllen. Under the program, providers come together to form networks called accountable care organizations and coordinate care for a patient population. These providers then receive a cut of the savings to the Medicare program if their efforts reduce utilization and cost.

In 2012, a group of physicians in McAllen enrolled in the MSSP and started the Rio Grande Valley ACO. To deliver care more efficiently, physicians used information already in their EHRs to identify the patients most likely to run up large Medicare bills. They then launched a variety of initiatives designed to keep these patients healthy, including proactively reaching out to high-risk patients, creating personalized chronic disease management plans and offering priority scheduling for patients recently discharged from the hospital.


You shouldn't text and drive. So why would physicians text and operate?

Technology, especially mobile technology, has done a lot of great things for the healthcare space. It's made record keeping and patient tracking easier, and it's helped providers make almost continual leaps and bounds in quality improvement, safety and value creation.

It can also be a dangerous temptation.

A few weeks ago, the particulars surrounding Joan Rivers' death grew more unsettling. An anonymous staff member at Yorkville Endoscopy alleged that Ms. Rivers' ENT physician snapped a selfie with the comedienne while she was anesthetized after an unauthorized biopsy. Ms. Rivers subsequently stopped breathing and was transferred to Mount Sinai Hospital in New York City, where she later died. The selfie incident is unconfirmed, though the allegations are enough to raise concern about where the physician's attention was truly paid while Ms. Rivers was on the operating table.

Last year, at Torrance (Calif.) Memorial Hospital, an anesthesiologist and nurse's aid covered an anesthetized patient in stickers and snapped her picture, thinking she'd be amused (she was a former hospital employee). Instead, she sued.

In a 2011 incident, an anesthesiologist at Medical City Dallas became distracted on a mobile device during a multi-hour surgery, according to the attending surgeon. He failed to notice the patient's dangerously low oxygen levels until 10 or 15 minutes after she her skin began to turn blue. The woman was pronounced dead during the surgery, a routine heart procedure.

However, the surgeon testified he hadn't thought much of the anesthesiologist's actions at the time. "You know, we see this sort of thing with these procedures. I mean, they're long procedures. We see this kind of thing, and usually…it doesn't seem to be a problem with relatively short procedures. What can I say? I mean, it happens," he said in his testimony taken for the subsequent lawsuit, filed by the patient's family against the anesthesiologist, surgeon and hospital.

The anesthesiologist, in his deposition, later said that while he didn't think surfing the Internet or social media during treatment was the best idea, it could be done. "I could do it safely," he said, according to a report from the Dallas Observer. The lawsuit is still pending.


Toyota is not lean


Lean and Six Sigma aren't the answer to improving your hospital. Being like Toyota is, but that doesn't mean the answer is gemba walks and value stream maps. Don't let the consultants fool you.

The Lean approach to process improvement gets a lot of attention in healthcare. First appearing in the 1990s, Lean management was touted as a way to remove waste and add value to processes. The theory was largely based on the practices of Japanese carmaker Toyota, a company that, at the time, was rapidly stealing market share from U.S. competitors.

Its success, combined with its leaders' unusual openness, made Toyota one of the most, if not the most, studied and written about organizations of its time.

Today, thousands of consultants help organizations, including those within the healthcare industry, implement Lean and Six Sigma techniques.

To be clear, Lean and Six Sigma are quite different, though they have similar goals.

Lean focuses on removing waste, improving efficiency and improving value through a set of specific processes and tools, many of which were derived from processes and tools observed at Toyota (e.g., gemba walks, value-stream mapping, Heijunka, just-in-time, etc.).

Six Sigma, which arose out of Motorola in the mid-1990s and was famously used by GE's Jack Welch, can be best described by an acronym: DMAIC — define, measure, analyze, improve and control.

Despite the popularity of these approaches — and the millions of dollars companies spend on them — neither has conclusively been shown to consistently improve company performance.

In fact, a 2007 study summarized by the Wall Street Journal found Six Sigma companies performed more poorly than competitors who hadn't implemented the program, as judged by stock performance of the Six Sigma companies compared to the S&P 500 (see Figure 1).

Figure 1 – Stock Performance of Publicly Traded Companies Implementing Six Sigma


When Implemented Six Sigma

Stock Performance During Period of Implementation-2007

S&P 500 Performance for Same Period

Home Depot

-8.3 %

July 2001




January 2000




July 2000




December 2003


Source: QualPro analysis of Six Sigma performance vs. S&P, January 2007.

A similar analysis — this time of companies that implemented Lean processes — performed by John Kenagy, MD, founder of healthcare consulting firm Kenagy & Associates, found Lean companies fared better, but still underperformed companies that skipped out on the Lean/Six Sigma bandwagon altogether (See Figure 2). Editor's note: Because the companies analyzed implemented Lean in the 1990s, Dr. Kenagy assessed the company's performance during 2000-2007 to mirror the periods examined by the QualPro analysis.

Figure 2 – Stock Performance of Publicly Traded Companies Implementing Lean


Time Period Assessed

Stock Performance During Period

S&P 500 Performance for Same Period


January 2000-2007




January 2000-2007




January 2000-2007




January 2000-2007



How did Toyota fare during this period?


January 2000-2007



The finding surprised many executives and Wall Street observers, but it wasn't actually surprising to the company that had originated it all: Toyota.

Toyota's success is not because it's Lean
Back in the mid-1990s, Toyota leaders were perplexed by this very issue: Hundreds of companies across all industries had replicated Toyota's tools and other Lean processes, but few were able to replicate Toyota's performance. Toyota wondered why, and reached out to two Harvard Business School professors — Steven Spear and H. Kent Bowen — to find out.

The carmaker knew its only competitive advantage was the Toyota Production System, and it wanted to engage in a discovery process around why TPS seemed so much more effective than Lean: Was there a critical component the Lean consultants missed?

Spear and Bowen studied for Toyota for four years, and discovered that indeed, there was a critical component missing:

"So why has it been so difficult to decode the Toyota Production System? The answer, we believe, is that observers confuse the tools and practices they see on their plant visits with the system itself. That makes it impossible for them to resolve an apparent paradox of the system — namely that activities, connections and production flows in a Toyota factory are rigidly scripted, yet at the same time Toyota's operations are enormously flexible and adaptable…the rigid specification is the very thing that make the flexibility and creativity possible," the two wrote in a Harvard Business Review report on their findings (emphasis mine).

Thus, Toyota has Lean processes and tools, but processes and tools aren't enough.

Dr. Kenagy, who spent two years studying Toyota during his time as a Harvard Business School visiting scholar, came to the same conclusion.

"In two years at Toyota, I never 5S'd anything, and I never went to a Kaizen event," he says. "Consultants observed 5S, poka-yoke, just-in-time, and those became Lean. It was the collection of the tools. They took the idea of Kaizen as continuous improvement, and made it an event."

But continuous improvement is not an event or project, it's just that: continuous.

The narrow, project-based focus is likely the reason so many companies have failed to realize the same results as Toyota.

"Projects don't change the baseline," explains Dr. Kenagy. "You have to move out of the project framework." But how do organizations do so?


Why P&G's CEO will succeed by doing what scares healthcare CEOs

What healthcare can learn from the leading consumer goods company and its decision to sell half its brands

In August, Proctor & Gamble announced it would sell off up to 100 of its nearly 200 brands — roughly half of its product portfolio.

Those brands with limited growth in recent years will be on the chopping block, said P&G leaders. While no brands have been specifically named for divestiture, Duracell and Braun are likely candidates, according to a Business Insider report.

The move is expected to reduce costs, improve profitability and reduce the complexity of the organization's structure and brand portfolio. Investors supported the move: P&G shares rose 3 percent after the company announced its intention to shed the brands.

"Reducing the breadth of brands will allow the company to dramatically simplify its operating structure and processes. Management will be reorganized into four sectors, each containing only a few business units. Research and development will be able to focus on core product types. Marketing will have fewer brands to maintain. And manufacturing and the supply chain can be streamlined," writes Kenneth Kaufman, chair of Kaufman Hall, of the decision in a blog post.

If P&G can't be all things to all people, can hospitals?


The NFL is a blow to population health. So why do so many health systems support the league?

In the heyday of population health, healthcare providers are exercising muscles that previously went unused. They are forging partnerships with nonprofits, public health organizations and businesses in their communities to improve health and well-being. But how much of population health involves not only endorsing what can improve our health, but also rejecting what hurts it?  

Repeated concussions can be devastating. The average helmet-to-helmet collision in the NFL lasts just 15 milliseconds. But players today are so strong, and so fast, that the head receiving the hit moves at an average of 14 mph in the opposite direction. One scientist describes it as the literal equivalent of a sledgehammer blow. Players below the professional level may not experience hits as severe as those in the NFL, but the sheer volume of impacts they absorb is staggering. The average high school football player receives up to 1,500 subconcussive hits per year.  

None of this information is new. The risks football poses to brain health have been widely studied and discussed, particularly since NFL Commissioner Roger Goodell testified before Congress in 2009. But what is becoming more pronounced is the link between the football, societal health and even healthcare costs. Earlier this month, Patrick Hruby wrote a painstakingly detailed piece for The Atlantic about the NFL's proposed (and loophole-rich) settlement with more than 4,500 former players who claimed hits received during their years in the league left them physically and mentally impaired.

The proposed $765 million settlement caps payouts for conditions such as dementia ($3 million), Parkinson's and Alzheimer's ($3.5 million) and chronic traumatic encephalopathy, which is only diagnosed after death ($4 million). After accounting for a series of reductions built into settlement terms and legal fees, Lester Munson with ESPN found a player who faced dementia after age 60 might end up collecting about $375,000 from the league. It's also worth noting that current and future NFL players are not eligible for cash awards under the settlement, regardless of what neurological conditions they might develop or already have.
"Why is this significant? Because brain damage isn't cheap," Hruby wrote. "Retirees who can't hold down jobs or keep their families together cost money. Retirees who need feeding tubes and ventilators cost even more money." The report cites an estimate from Frank Neuhauser, executive director of the Center for the Study of Social Insurance at the University of California, Berkeley, who told the Los Angeles Times that dementia and Alzheimer's patients can involve up to 30 years of medical care and income support.

Population health is a broad concept, so talk about the NFL might seem trite. After all, the pool of current and former NFL players is a tiny fraction of the general population. But the league's cultural influence is deeply ingrained into American culture.   

Football is the No. 1 participation sport in high schools across the country, according to the the most recent data from the National Federation of State High School Associations. More than 1 million high schoolers played football on a team in the 2013-14 school year. (This isn't counting younger players or programs that aren't affiliated with schools, such as Pop Warner leagues.) 

A significant number of these kids are ending up in hospital ERs from the sport, too. The nonprofit advocacy group Safe Kids Worldwide analyzed 2012 emergency room data, finding football resulted in both the highest number of all pediatric injuries for players ages 12 to 17. For players under age 19, the sport also resulted in the most injuries and concussions seen in the emergency room. 
Football is problematic to population health for its cognitive risks, but the NFL has sent mixed messages, at best, about social and mental health in recent weeks. Conversations about population health get hard when it comes time to identify who is most responsible for solving health problems, especially if they extend beyond the medical arena. Addressing issues of domestic violence and child abuse are not the sole responsibility of hospitals or health systems, but the current NFL crisis — and the attention thus lent to more sensitive health topics — leaves ample opportunity for healthcare providers to do some good. One place hospitals might want to start seems relatively obvious: They might want to reconsider their sponsorship deals with NFL teams.


Did Joe Swedish just prove all his critics wrong?

Joe Swedish was named CEO of WellPoint, the $70 billion health insurer serving one in nine Americans, in February 2013. His appointment left many in the industry scratching their heads: While he'd certainly been successful leading Trinity Health — revenue grew from $6 billion to $9 billion during his tenure, and he oversaw the system's merger with Catholic Health East to form the fourth-largest Catholic health system in the country — he didn't have experience at a health insurer.

WellPoint's shares fell 4.6 percent the day he was named head of the insurance behemoth. A Wall Street Journal report on the stock's loss quoted investors critical of Joe's "limited exposure to Wall Street," having spent most of his career at nonprofit systems.

JoeSwedishJoe might just have proven them all wrong yesterday. If you didn't hear, WellPoint's California entity, Anthem Blue Cross Blue Shield, announced a joint venture agreement with seven health systems in Los Angeles and Orange counties to partner on a new health network and insurance product that the insurer says will be priced 10 percent less than competitors. While it didn't name any competitors outright, any one with even a little knowledge of the California markets could see the writing on the wall: Anthem finally has a play to better compete with Kaiser.

The partnership, called Anthem Blue Cross Vivity (parent WellPoint plans to rebrand as Anthem by the end of this year), is the first of its kind in the country, bringing together seven competing health systems in a single entity that will equally share risk for its covered lives. The HMO-like product will be offered to large insurers in 2015. Enrollees who receive care at the seven participating health systems will face no deductibles for care (they'll be responsible for a "modest" co-pay, the amount of which is still being determined).

The model, if successful, could be expanded across the country, and there is little doubt that WellPoint would have a major success story on its hands if that's the case. Starting in California is a natural choice, as its providers have the most experience of any state in managed care.

While this is technically a narrow-network plan, it's not a narrow network as we know them today: This one includes the hospitals that employees most want to be treated at. Both UCLA and Cedars-Sinai, arguably the biggest-name hospitals in the LA market, have joined Vivity. Other partners include Good Samaritan, Huntington Memorial, PIH Health and Memorial Health.

Consumers who are seeing more and more of their paychecks going toward growing premiums and deductibles will likely be very attracted to this plan option. And as employers across the country struggle to deal with increasing healthcare costs, a product that offers 10 percent lower premiums and access to some of the most recognized and high-quality systems in a market is a no-brainer.

When Swedish was hired last year, some (including this publication) speculated the move signaled the insurer's interest in acquiring hospitals and health systems. In April, he quelled that rumor, saying: "To be clear, I do not currently see vertical integration as a likely path for WellPoint."

This deal isn't an acquisition, but it does demonstrate WellPoint's interest in partnering more closely with providers to take on risk. And, it certainly reinforces what was thought to be the health insurer's initial intention: to use Joe's experience on the provider side to aid in these efforts.


Peter Drucker's brilliant 47-year-old idea could transform healthcare

There's a theme arising in the various conversations I've had about leadership lately: The front-line employees are the ones with the real power to transform an organization, leadership just guides them.

This, of course, is an intuitive concept, but one that isn't always embraced by leaders.

It's also a core tenet of a theory I've written about previously on this blog — Adaptive Design. Adaptive Design essentially argues that innovation doesn't come from a "big bang" disruption, but instead results from iterative adjustments to current practices and business models.

Another caveat of the theory worth highlighting is that it turns the traditional management approach on its head. In traditional management, information is sent up the chain, with managers and executives filtering this information and making decisions on how work should be carried out. Management's decisions are then sent back down the chain, where they're implemented.

Adaptive Design argues there's just too much data available today to send data up to managers for every decision; doing so creates a bottleneck that slows the organization's ability to adapt and adjust to market changes.

"Traditional management works great until the work becomes complex, dynamic and unpredictable, and you can't get data up [to management] quickly enough," says John Kenagy, MD, an innovation researcher who developed the theory of Adaptive Design.

Instead, the most successful organizations will cultivate a culture of decision making on the front-lines, by instituting processes and methods that support and encourage it.

There seems to be a groundswell of interest around empowering front-line leadership, perhaps because executives have begun to realize healthcare is just too complex to rely only on the top of the organization for action.

The Mayo Clinic Center for Innovation earlier this month released a book, "Thing Big, Start Small, Move Fast," which details the health system's process for curating innovative ideas from its front-line workers.

And, Chris Van Gorder, CEO of Scripps Health in San Diego, who helped lead a $150 million turnaround of the system, has a book due out in October, "The Front-Line Leader: Building an Organization from the Ground Up," which explores this very idea.

The approach is a worthy one. Healthcare is incredibly complex, and front-line workers often have more expertise to guide decisions than executives far removed from these processes and direct patient care.

However, the idea of front-line decision making is not a new one. In fact Peter Drucker, the father of management theory, predicted the need for this shift 47 years ago.

In an article for McKinsey Quarterly published in 1967 and re-released for the publication's 50th anniversary, Drucker explains how the traditional management approach of leaving decision making (which he refers to as "thinking") at the top of the organization inhibits the development of the next generation of leaders:


Code Black: Putting a face on America's access problem

A new documentary takes viewers inside America's busiest ER at Los Angeles County Hospital, where patients are known to wait 12, sometimes 18, hours or more to receive treatment, because they have nowhere else to go.

Code Black, which received the Best Documentary award at the LA Film Festival, was directed by Ryan McGarry, MD. He balanced filmmaking with his ER residency, filming the stories of the hundreds of patients who came through the ER each day, and the physicians and nurses who treat them.

For those in the healthcare industry who haven't been to an urban safety-net hospital like LA County, the film is eye opening. Safety-net hospitals make up 2 percent of all hospitals but provide 20 percent of all charity care in the country.

McGarry began filming during his first year of residency at LA County's old public hospital, the birthplace of emergency medicine and home to the first emergency medicine residency in the 1940s.

Over the course of four years, McGarry profiles the patients and providers as they transition from the old LA County — and its chaotic, outdated and too-small ER — to a new multimillion dollar facility (required by state earthquake code), which in the words of one attending, "moved the ER forward two decades in a single day." This creates a unique opportunity to see the effects of healthcare's increasing regulation and bureaucracy on providers who previously were exempt (thanks to federal waivers).

The documentary sets out to define what it means to be a doctor at this time in America, explains McGarry.

At old LA County, quarters were cramped but camaraderie was high, and physicians and staff spent almost all their time on direct patient care. At the new LA County, forced to comply with a bevy of federal and state regulations, the doctors find themselves spending less and less time with patients, despite no slowdown in volume. Several scenes show physicians alone, logging in and out of EMRs, looking for one of several paper forms, or hunched over while filling out pages of paperwork.

Jaimie Eng, MD, an ER resident profiled in the film, explains the impact: "It takes four times as long to document than to treat the patient."
The film doesn't ignore the benefits of regulations, such as HIPAA's privacy protections, but shows that such regulations do take considerable time away from direct patient care.
"We're not comfortable with this...we became doctors to be with our patients," says McGarry.

McGarry doesn't debate the law's intention — "We all want privacy and we all think it's important," he says. But so many delays in care delivery are caused by minutes spent on HIPAA-mandated minutiae. Anything that takes time away from direct patient care is worth examining, especially during a Code Black — when the ER is overrun with patients waiting hours upon hours to be seen.

At LA County, patients presenting to the ER are given a score from 1 to 4, with 1 denoting patients with the most emergent conditions. At LA County, level 2 patients can wait from 10-15 hours to be seen.

The film puts a face (or rather, faces) on America's healthcare access problem and highlights some of the other "well-intentioned" policies that end up exacerbating access issues.

For example, a state-regulated nurse-to-patient ratio forces ER administrators to shut down a wing. In California, where nurses are in high demand, LA County's ER lost 15 nurses during a four-month span during filming. And, privacy regulation prohibit doctors from treating patients anywhere other than a private room, creating backlogs of patients as doctors wait for rooms to turnover.

"The message is there needs to be balance," McGarry said after the screening. "It seems like we've gone maybe a bit too far in the other direction. Well-intentioned policy doesn't really benefit you the patient or you the provider."