Cartoon – We need to cut costs
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Kaufman Hall: 1 in 4 hospitals have no cost reduction goals for the next 5 years
Click to access 2017-State-of-Cost-Transformation-in-U.S.-Hospitals.pdf
Approximately 25 percent of hospital and health system executives have no cost reduction goals for their organizations over the next five years, despite 96 percent of executives noting that transforming costs is a “significant” or “very significant” need for their organization, according to survey findings published by Kaufman Hall.
As hospitals and health systems face a myriad of pressures, including regulatory challenges, the rise of narrow networks and consumer demands, healthcare organizations need to reach a cost position that is equal or lower to competitors. For the majority of hospitals and health systems, achieving such a position will require a 25 percent to 30 percent reduction of costs over the next five years, according to Kaufman Hall.
The report, titled “2017 State of Cost Transformation in U.S. Hospitals: An Urgent Call to Accelerate Action,” presents the results of an online survey of more than 150 senior executives from U.S. hospitals and health systems to determine where the industry stands with transforming the cost of care.
Here are six insights from the report.
1. While almost all (96 percent) of executives identified cost reduction as a “significant” of “very significant” need, more than half (51 percent) of respondents said they have no cost reduction goal or a goal of only 1 percent to 5 percent in the next five years.
2. Only 5 percent of hospitals or health systems have a cost reduction goal of more than 20 percent over the next five years.
3. Seventy-five percent of executives indicated that their cost transformation success is average or below average.
4. Nearly 70 percent of executives acknowledged that they must close the discrepancy between their current operating performance and financial plan.
5. Almost 80 percent of respondents noted that they must proactively revise their cost structure with the industry switch to value-based care.
6. According to the report, a lack of accurate data, along with a lack of insight into costs and savings opportunities, may be the reason for limited cost reduction measures.
Study: Hospitals on doctor-buying spree raise legal questions
Bigger and fewer doctor practices drive up prices for patients, employers and taxpayers, several studies confirm.
Hospitals have gone on a doctor-buying spree in recent years, in many areas acquiring so many independent practices they’ve created near-monopolies on physicians.
Research published Tuesday throws new light on the trend, showing that large doctor practices, many owned by hospitals, exceed federal guidelines for market concentration in more than a fifth of the areas studied.
But it goes further, helping answer some of health policy’s frequently asked questions: How could this happen? Where are the regulators charged with blocking mergers that have been repeatedly shown to drive up the price of health care?
The answer, in many cases, is that they’re out of the game.
Doctor deals are typically far too small to trigger official notice to federal antitrust authorities or even attract public attention, finds a paper published in the journal Health Affairs.
When it comes to most hospital-doctor mergers, antitrust cops operate blind.
“You have a local hospital system and they’re going in and buying one doctor at a time. It’s onesies and twosies,” said Christopher Ody, a Northwestern University economist and one of the study’s authors. “Occasionally they’re buying a group of five. But it’s this really small scale” that adds up to big results, he said.
The paper, drawing from insurance data in states covering about an eighth of the population, found that 22 percent of markets for primary care doctors, surgeons, cardiologists and other specialties were “highly concentrated” in 2013. That means that, under Federal Trade Commission guidelines, a lack of competitors substantially increased those doctors’ ability to raise prices without losing customers.
The research didn’t sort physician groups by ownership. But other studies show that large, predominant practices are increasingly owned by hospitals, which see control of doctors as a way to both coordinate care and ensure patient referralsand revenue.
According to one study, hospitals owned 26 percent of physician practices in 2015, nearly double the portion from 2012. They employed 38 percent of all physicians in 2015, up from 26 percent three years earlier.
In the study by Ody and colleagues, only 15 percent of the growth by the largest physician groups from 2007 to 2013 came from acquisitions of 11 doctors or more.
About half the growth of the big practices involved acquisitions of 10 or fewer doctors at a time. About a third of the growth came not from mergers but from hiring doctors out of medical school or other sources.
Federal regulations require notification to anti-monopoly authorities only for mergers worth some $80 million or more — far larger than any acquisition involving a handful of doctors.
Very few of the mergers that drove concentration over the market-power red line — or even further — in the studied areas would have surpassed that mark or a second standard that identifies “presumably anti-competitive” combinations.
But the little deals add up. In 2013, 43 percent of the physician markets examined by the researchers were highly or moderately concentrated according to federal guidelines that gauge monopoly power by market share and number of competitors.
(A market with three practices in a particular specialty, each with a third of the business, would be at the lower end of what’s considered highly concentrated. A market with one doctor group doing at least 50 percent of the business would be highly concentrated no matter how many rivals it had.)
Bigger and fewer doctor practices, fueled largely by hospital acquisitions, do drive up prices for patients, employers and taxpayers, several studies confirm.
Part of the increase results from a reimbursement quirk. Medicare and other insurers pay hospital-based doctors more than independent ones. But another part comes from the lock on business held by large practices with few rivals, Ody said.
“It’s a problem,” said Martin Gaynor, a health care economist at Carnegie Mellon University and former head of the FTC’s Bureau of Economics. “All the evidence that we have so far … indicates that these acquisitions tend to drive up prices, and there’s other evidence that seems to indicate it doesn’t do anything in terms of enhancing quality.”
The American Hospital Association, a trade association, declined to comment on the study since officials hadn’t seen it. But the AHA often argues that “hospital deals are different” and that doctor acquisitions keep patients from falling through the cracks between inpatient and outpatient care.
The FTC has moved to block or undo a few sizable doctor mergers, including an orthopedics deal in Pennsylvania and an attempt by an Idaho hospital system to buy a medical practice with dozens of doctors.
But the agency largely lacks the tools to challenge numerous smaller transactions that add up to the same result, said Ody.
An FTC spokeswoman declined to comment on the study’s findings.
Ody urged state attorneys general and insurance commissioners to look more closely at doctor combos. Sometimes state officials can question mergers overlooked by federal authorities. Or they can block anti-competitive practices, such as when hospitals seek to exclude competitor physicians from insurance networks.
Beyond that, “I hope that people notice this [research], and I hope people think creatively about what kinds of solutions might be appropriate for this,” he said. “I don’t know what they are.”
Who are you?
Abstract: This is an article about integrity and its importance as a critical success factor in business.
A very good friend of mine suggested I write an article entitled, “Who are you?” After thinking about this concept, I decided that this is a very good question. Who are you? What are you made of? What are your values, morals, mores, ethics and guiding principles? What are the tenants of your faith? To what power do you ultimately ascribe?
My living has shown me that a lot of people wax eloquently about their high values and standards. I have heard my fill of this around churches. My experience has taught me that in the course of life, you will be tested. Sometimes the test is over a big issue with substantial consequences and a high level of visibility. At other times, the test is trivial. The only witnesses will be you and your God. Will that test show that you are who you say you are when it really matters? Will your proclamations be affirmed by your actions?
I was coming back to my mountain house one day. As we approached, we saw the man of the family that was renting the house next door and two of his small children coming out of our driveway with all of our firewood they could carry. When I confronted the man with his children as witnesses, he offered to pay me for the wood. I told him that if he needed the wood bad enough to feel compelled to enlist his small children in the act of theft by taking, I did not want his money. He offered to return the wood. I asked him if he was inclined to return the wood, why would he steal it in the first place? I told him that if he had asked me in advance, I would have given him enough wood to build a campfire for his family. I told him to enjoy the stolen wood. I did not want it back. I think the man was so ashamed that he did not know what to say. I hope his encounter with me burned an image onto his mind and the minds of his children they will never forget. I wonder how the children’s opinion of their father might have been permanently altered by their encounter with me? The children were not old enough to think about who they are but I wonder if what their dad was doing with them was consistent with other values he was supposed to be teaching them? I wonder if the man will remember his encounter with me when his children become teenagers and get involved in considerably more serious thefts? I wonder if he will connect the dots back to the day he was teaching his children that theft was acceptable? Who was this man? Is who he really is consistent with who he tells others he is? Who will his children grow up to be?
I have seen my fill of bizarre behavior in healthcare organizations. People that will say or do anything to advance their cause in the organization. Business partners that are actively or complicity involved in less than honorable dealings. I worked with a man who had a very simple test of integrity: Does the other person do what he says he will do or not? If you cannot trust someone to do what they say they will do, what can they be trusted about? I have developed a serious problem dealing with people I do not trust. I know that this is more the rule than the exception in politics where anything goes but I choose to avoid dealing with people who have demonstrated they cannot be trusted.
When my children were growing up, I taught them that there is a major problem with integrity. You can spend an entire lifetime developing integrity, respect and rapport among your acquaintances that can be permanently destroyed in a matter of seconds when a breach of honor or integrity occurs. After the breach, there is no cure. People aware of the indiscretion will never trust you again because they have no way of knowing if what you are saying this time is true or not. Along the way, I came across the following poem. It had a profound effect on me and my children and probably has something to do with them going up to be the adults they are. Their formative years were very highly influenced by their grandparents. Do not underestimate you ability to have an effect on others, especially children. Remember the Randy Travis song ‘He Walked On Water?’ I cannot listen to this song without tearing up because Randy is singing about my mother’s father, a man whose shoes I could never hope to fill.
Your Name
You got it from your father,
it was all he had to give.
So it’s your’s to use and cherish, for as long as you may live.
If you lose the watch he gave you, it can always be replaced.
But a black mark on you name son, can never be erased.
It was clean the day you took it, and a worthy name to bear. When he got it from his father, there was no dishonor there.
So make sure you guard it wisely, after all is said and done. You’ll be glad the name is spotless, when you give it to your son.
So, who are you? Are you who you say you are? Who do others say you are? Do you have to tell people who you are or is it evident in your living? What will you do when you are tested? I can say from personal experience that I have been tested and I failed a test when I was younger in an effort to protect my self-interest by going along with something that I knew was wrong. While I have been forgiven, I have never been able to forgive myself. I have been tested since then and I will not make the same mistake twice if for no other reason than the pain of bearing the guilt and remorse is not worth it. What would you do if the stakes of the test was your job? What if you did the wrong thing and still got the outcome you were trying to avoid? Would you judge the risk as having been worth taking? My experience has taught me that it is not worth it to take such a chance in the first place regardless of the risk.
An acquaintance of mine has been charged with felonies by the government related to alleged falsification of reporting related to a corporate integrity agreement among other things. Did he know the reporting was incorrect? The trial will make that determination. If the erroneous reporting was intentional, the result will be devastating. The government has asked the court for his assets to be forfeited. He and his family will be severely impacted regardless of the outcome of this dispute. Sadly, the government’s case has carried so often when healthcare compliance is involved that political candidates like John Osoff run on the claim that they will save the government by curtailing abuse of the Medicare program. The Attorney General recently made news by announcing that he was bringing charges against over four hundred people at the same time alleging they defrauded the Medicare program. Anyone involved in making any kind of disclosure to the government that does not take the potential consequences of inaccurate disclosures whether intentional or not seriously is a certifiable idiot in my opinion. That someone would spend a single second contemplating whether or not to do the right thing when compliance is involved says everything about who they really are.
Willie Nelson said in a song that, “Regret is just a memory written on my brow and there’s nothing I can do about it now.” While you cannot change anything that has happened before, you can change a lot going forward. If you owe anyone an apology for anything you regret, strongly consider doing it.
I would like to thank my dear friend Linda Jackson who is one of the strongest and most incredible people I have ever met for inspiring this article.
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Healthcare: It’s complicated
http://www.theactuary.com/features/2017/07/its-complicated/
It has been a little over seven years since the US began implementing healthcare reform at the national level, following the passage of the Patient Protection and Affordable Care Act (ACA), also known as Obamacare. However, the future of the law’s programmes has never seemed more uncertain now that the United States House of Representatives has passed legislation repealing and replacing many of the ACA’s key provisions.
While the ACA and the proposed replacement legislation are fundamentally different in their approaches to financing and regulating healthcare, they do have one thing in common: both are extraordinarily complicated.
Actuaries have had a front-row seat as healthcare reform has unfolded, and they are in a unique position to help address the challenges our complex system presents – whether that involves setting premium rates, calculating reserves, or just trying to explain healthcare policy to their Facebook friends. After all, actuaries were working to promote the financial stability of our complex healthcare system long before the ACA came along.
Even so, one might ask: Why is the American healthcare system so complicated? Does it have to be that way? Most stakeholders acknowledge that our current system has room for improvement, although opinions vary widely on what to do about that. In part, the complexity of our system is rooted in our history.
The healthcare system that we have today wasn’t formed in one fell swoop. Instead, it has been stitched together gradually over the past century by policymakers working to meet the challenges of their times. For example, the prevalence of employer-sponsored insurance was at least partly driven by price-wage controls implemented by the federal government in the 1940s during the Second World War, together with very favourable tax treatment. When the employer-sponsored market began to flourish, healthcare coverage became unaffordable for the non-working population – in particular, low-income workers, seniors, and disabled individuals – and the Medicare and Medicaid programmes were born. Currently, healthcare in the US is provided and funded through a variety of sources:
- Employer-sponsored insurance – either self-funded by the employer or insured through a carrier
- Individual major medical insurance – currently subsidised by the federal government for many individuals under the ACA
- Medicare, Medicaid, and military health coverage – subsidised by federal and state governments and increasingly administered by privately managed care organisations
- Other – for instance, the Indian Health Service, care provided to correctional populations, and uncompensated care provided to the uninsured.
It’s therefore not surprising that the policies being proposed today are an attempt to fix the problems we currently face, such as expanding access to affordable healthcare, reducing the cost of healthcare, or improving the quality of care received by patients.
However, our system has evolved in such a way that trying to implement a solution is like trying to solve a Rubik’s Cube – it is hard to make progress on one side without introducing new problems into other parts of the puzzle. For a Rubik’s Cube, successful solvers focus on both the local and global picture, and sometimes must make short-term trade-offs to achieve a longer-term solution. Unfortunately, the short-term nature of political pressures make it difficult to implement longer-term strategies for healthcare. Yet, we see many areas where actuaries can be instrumental in addressing the challenges presented by our complex healthcare system.
Complex times call for complex models
The ACA made sweeping changes that impacted almost every source of coverage listed above. The most profound changes, besides the expansion of Medicaid coverage, were the changes made to the individual and small employer health insurance markets. These already small markets were fractured into several separate pieces (grandfathered business from before the ACA became law, ‘transitional’ business issued before 2014, and ‘ACA-compliant’ business issued in 2014 and beyond). The only constant has been change, with many regulatory changes occurring each year (often after premium rates were set by insurers) and with the stabilisation programmes intended to mitigate risk during this time of change often paradoxically increasing uncertainty. This led some to question whether these markets were inherently too unpredictable to be viable, whereas others felt that the markets were finally starting to stabilise before the election changed everything.
Besides predictability problems caused by regulatory or political factors, two challenges facing health actuaries during these transitional years have been (1) the lag between when market changes are implemented and when data on policies subject to the new rules becomes available, and (2) the difficulty in predicting consumer behaviour in reaction to major changes in market rules such as guaranteed issue and community rating. How many of the uninsured would sign up? How price-sensitive would members be when they renewed their coverage each year? How will changes in other sources of coverage (such as Medicaid expansion) impact the individual market? How will potential actions by competitors affect an insurer’s risk?
Despite the daunting nature of these challenges, actuaries have, out of necessity, found ways to try to address them. For example, faced with the data lag problem, they explored ways to augment traditional claim and enrollment data with new data sources such as marketing databases or pharmacy history data available for purchase. Such sources can be used to develop estimates of the health status of new populations not previously covered by an insurer. Many actuaries also developed agent-based stochastic simulation models that attempted to model the behaviour of consumers, insurers and other stakeholders in these new markets. Such models continue to be used to evaluate the potential outcomes of future changes to the healthcare system, and will probably be essential should efforts to repeal and replace the ACA prove successful.
Information problems: what is a rational actor to do?
Most goods and services in the US have a price tag that consumers can use to ‘shop’ for the option that they feel gives them the best value for their dollar. Healthcare is different. If you ask how much a healthcare service will cost in the US, the answer is “it depends”. List prices such as billed charges for hospitals and physicians and average wholesale prices for pharmaceuticals are increasingly meaningless, given the enormous contractual discounts and rebates that typically apply. The same service may have wildly different prices depending on who is paying for it, and prices may not correlate well with either the clinical value the service provides to the patient or the actual cost to the healthcare provider who renders it. Layered on top of this complex foundation are the often arcane policy provisions that determine a member’s ultimate cost for a claim.
Moreover, even if a patient can determine the cost of treatment at different healthcare providers, making an informed choice often requires clinical knowledge the average person is unlikely to possess. Also, many of the most costly services are non-discretionary and often emergent in nature. In other words, even if a consumer wanted to shop they would be hard-pressed to do so.
All of this means that it is exceedingly hard for various stakeholders – patients, doctors, even insurers – to know the true cost of a service at the point of care, much less manage it. Yet a lot of effort has been spent in trying to better align cost incentives for providers and patients. Past efforts have often used crude methods, such as high deductibles paired with health savings accounts, to create incentives. Current efforts such as value-based insurance designs, which vary cost sharing based on a patient’s clinical profile, use more nuanced approaches to encourage patients to use high-value care. Moving from fee-for-service to value-based payment models for reimbursing healthcare providers has been a focus of both private and public payers in the US.
While such initiatives show promise, they come at the price of even more complexity – and it isn’t always clear that this price is worth paying. The proliferation of more complex benefit designs and provider contracting arrangements can exacerbate the price transparency problems that existed even in the relatively simple fee-for-service world.
Actuaries are well equipped to help insurers, providers and consumers navigate these waters. For example, repricing healthcare claims in an equitable way using actuarial techniques, such as comparing reimbursement rates with a standard fee schedule, is
an efficient way for providers and payers to evaluate cost levels consistently across contracts that may use very different reimbursement methodologies.
Actuaries also have a role to play in developing tools to support clinicians and consumers in understanding the financial dimensions of their healthcare decisions.
Technology: the cause of, and solution to, all our cost problems?
For better or worse, Americans seem determined to seek technological solutions to our health problems, even when lifestyle changes in diet and exercise habits might be just as effective.
Technological advances drive a significant portion of healthcare cost increases, and while many do result in profoundly valuable new therapies, some provide only marginal benefit over existing options at a significantly higher cost. Finding ways to leverage our love of technology to achieve health outcomes more cheaply would be a worthy goal, and one where an actuary could make a difference. Work to use machine learning (for example, in radiology), smarter medical devices, and other data-intensive methods to improve healthcare are still in their infancy, but show promise. From a policy perspective, actuaries could assist in designing novel approaches toward rethinking the incentives for clinical innovation, such as linking payment for new therapies to their clinical value relative to alternatives.
Will the US ever change its relationship status with healthcare from “it’s complicated” to something less ambiguous? In the near term, the answer seems to be “no.” But perhaps we can hope that – with a little help from actuaries – even a complicated relationship can be a good one.
Hospital Impact: Amid turbulent times, high reliability organizations must learn to be resilient
Over the past few years, healthcare organizations have joined the likes of nuclear power plants, air traffic control systems and naval aircraft carriers in the journey to become high reliability organizations (HROs).
An HRO is one that has been successful in avoiding disasters despite being in a high-risk field where accidents are expected. But how do we remain resilient and maintain the five principles of a HRO during this chaotic time in healthcare, when we are being asked to do more with less?
The five principles inherent to becoming a HRO are:
- Preoccupation with failure: Do not ignore any failure, no matter how small. Small deviations often times can lead to tragedy.
- Reluctance to simplify: Do not explain away problems. Reject simple diagnoses. Attack failures head on and conduct root cause analyses.
- Sensitivity to operations: The best picture of what is occurring comes from the front line. Front-line employees are closer to the work than executive leadership, and are better positioned to recognize failure and identify opportunities for improvement.
- Commitment to resilience: The ability to anticipate trouble and improvise when the unexpected occurs.
- Deference to expertise: Expertise, rather than authority, takes precedence. When conditions are high-risk and circumstances change frequently, on-the-ground subject matter experts are essential for assessment and response.
We know that system performance in healthcare hinges on the ability to match demand for care with the resources that are needed to provide it. Given the present uncertainty of the Affordable Care Act, the divestiture of hospitals across the country in order to remain solvent, along with decreased payer reimbursement, can providers continue to adopt the five principles of a HRO and maintain resilience in this high-pressure industry?
Remaining adaptable and foreseeing challenges that threaten your mission must become part of your everyday thinking in order to achieve resilient performance.
“HROs give their employees the tools they need to do their jobs, but more importantly, a voice to speak up when processes and systems go awry.”
The inception of accountable care organizations invoked many academic debates, as efforts to drive reform forward resulted in false starts that stopped momentum before it could build. The idea of transformational change has existed for years now, and revolutionary change across the healthcare system is now our reality.
Traditional healthcare reimbursement models are being replaced by new payment methodologies and incentives built around the concept of value and shared risk. Responding to this momentous change is imperative for the long-term viability of all hospitals and health systems.
We now know that evolving with the ever-changing healthcare environment is imperative for the long-term viability of all hospitals and health systems. Health systems must examine their current capabilities and capacity to exist within a value-based environment, and be willing to restructure care delivery when and where necessary, and do it efficiently without compromising the HRO mindset.
An organization’s past success or current position in the market will not shield it from the force of reform, and with that comes inherent risk. HROs give their employees the tools they need to do their jobs, but more importantly, a voice to speak up when processes and systems go awry.
So how do the best managers continue to lead in turbulent times? They remember their fundamental purpose. The more turbulent it gets, stop, assess and reassess the situation and lead with a calm and reassuring manner. Project the organization’s mission, purpose and top goals. Use the daily morning huddle to debrief, reset and refocus before jumping back into the chaos. Eventually you will move through it.
Find opportunities to remind your team of their purpose and mission when things get chaotic. Purpose, above all else, is the source for engagement and motivation in the workplace.
During turbulent times, communication inevitably breaks down. When people stop talking and listening, all the fears and difficulties associated with change come out in force. The role of a manager during periods of change must evolve from encouraging communication to brokering communication. Do not leave effective communication to chance.
When new variables are constantly being introduced at work, setting priorities gets harder. The more things change, the harder it is to prioritize decisions on a day-to-day basis. As a leader in a HRO, your role must evolve to meet this gap.
Above all else, do not forget to listen. When things are crazy at work, your ability to listen is crucial. Even if you do not have all the answers, sometimes just allowing your team to vent, talk things through with you, helps them to see the bigger picture. The sheer act of communication through listening and understanding, can make the difference between a team that stays positive and productive and a team that becomes toxic.
As we all know, the crazier things get; the more mistakes are likely to happen. When pressure and stress are running high, say so. Being transparent with your team gives them perspective and a new appreciation for the work being done. What you don’t want is for the team to be fearful of what’s coming next. Fear brings out the worst in people.
As we move through the next decade, you can expect increasing technological advances that will change the healthcare industry drastically. Digital tablets that aid in patient engagement, radio frequency identification for tracking patients, and electronic health records that reduce medical errors while increasing quality of care are just a few. These advances have propelled the healthcare industry into a new realm of progress.
As we look to the next 10 years, the development of even more advanced technological tools will continue to shift the day-to-day responsibilities of those working in the industry. We must stay preoccupied with safety. We must continue to embrace the principles of HROs.
With the healthcare system undergoing so much change, successful organizations will be those that proactively design strategies that are facile, while cultivating a questioning attitude. It is the core attributes of HROs that organizations must possess today and well into the future, in order to flourish in this new healthcare paradigm. Ask yourself what inspires your team, then do it.
Darlene A. Cunha, MMHC, BSN, RN, ACHE is an accomplished senior healthcare executive, whose focus is leading change for clinical, quality and operational excellence.
Investigations about safety issues result in few meaningful consequences for hospitals
Investigations into hospital safety issues rarely result in consequences that spark meaningful improvements, according to USA Today. That can leave patients in the dark and vulnerable to unnecessary infections.
An article in USA Today outlines a system stacked against public admissions of safety issues and potential risks of infection. A recent investigative report on sewage leaking down the walls and floor of an operating room in MedStar Washington Hospital Center represented the first public glimpse of a health department investigation into the matter.
In a statement, the president of MedStar Washington Hospital noted the hospital had corrected its plumbing issues, but Lisa McGiffert, director of the Safe Patient Project run by Consumer Reports, says the system as it stands does little to demonstrate public accountability. She suggests that hospitals must be forced to undertake internal and external audits following safety lapses.
Larry Muscarella, author of the Discussions in Infection Control blog, told the newspaper that penalties or fines issued in such cases rarely provide enough incentive for substantive change. In some cases, he says, hospitals face “little or no consequence” from citations by state agencies.
That leaves patients without information that could be crucial when it comes to deciding where they want to go to seek treatment. This compounds a related issue where, despite a general trend toward increased transparency intended to give patients information to make informed choices about their care, some hospitals have dragged their feet on releasing quality data.
Concentrating on short-term financial incentives that lead hospitals away from more substantive quality improvements actually could end up hurting the bottom line in the long run, according to trauma and emergency surgeon David Kashmer, M.D. He points out that hospitals that implement error-prevention programs see a median savings of $250,000.
“We have advanced quality tools available, but unfortunately we see some centers where, because of the culture or the situation, [they] don’t use them,” he says.
Arbitrator awards fired Swedish Health whistleblower surgeon $17.5M
A substantial payout for a fired whistleblower has Swedish Health crying foul. The organization will now challenge the arbitrator’s award in court.
David Newell, M.D., blew the whistle on a high-profile case involving neurosurgeons who double-booked patients for surgeries at a Swedish Health hospital in Seattle. The fallout from that case was sufficiently brutal for the CEO of Providence St. Joseph, which acquired Swedish, to take out a full-page ad in The Seattle Times apologizing to the organization’s employees and patients.
Now, The Seattle Times reports, an arbitrator has agreed with Newell’s claim that Swedish fired him in retaliation for his whistleblowing activities, and awarded him $17.5 million. The award reportedly includes $15.5 million in lost earnings and another $1 million for emotional distress.
Swedish Health contends it fired Newell after he failed to immediately disclose he had been arrested in a prostitution sting, as required by his employment agreement. The organization also protested the amount of lost earnings requested, noting that the figure represented nearly 10 times his annual compensation in 2014, and that he would have needed to perform more than 3,000 complex brain-aneurysm procedures in a year to reach such an amount.
Guy Hudson, M.D., the CEO of Swedish, blasted the ruling in a statement (PDF). “For this arbitrator to award Dr. Newell $17.5 million—at a time when many people cannot afford healthcare or fear losing their insurance, and when there is an epidemic of sex trafficking and exploitation of women—is unconscionable and outrageous,” he said.
But the newspaper reports that in a recent court filing, Newell’s attorney maintained that evidence presented showed Swedish Health’s actions “were part of a pattern of targeting and interfering with established neurosurgeons’ practices, retaliatory behavior, and a disregard for patient safety.”
In a similar case, a court recently ruled in favor of a Boston-based surgeon who lost his job at an upstate New York hospital after speaking out about concurrent surgeries performed there by another doctor. Lost wages in that case totaled $88,277.
Cartoon – Elbonian Debt Crisis
Cartoon – To put it in Layman’s Terms
HENRY KOTULA 