"The Ronan Report" provides insight about the activities at the Western Maryland Health System in Cumberland, Maryland, and about the changes taking place in healthcare today from a CEO's perspective.

Friday, February 28, 2014

A Perspective on the Week

I have been so busy that I haven't had time to blog with everything going on from a business and personal perspective.  I have found that I really miss blogging during weeks like this one.  So, some things that I think that I think at the end of this week............first, thanks to all who responded to Friday's blog.  I received a number of great suggestions on a name for the Alliance between WMHS, Meritus and Frederick health systems.  At this point in the time, Trivergent looks like a winner (thanks, Clay Jones) provided we can get it trademarked.  We had our first candidate for the Chief Medical Officer's position in for an interview, which is great.  He is a seasoned, experienced CMO and on the surface could be a good fit at WMHS.  Our interim CMO is doing a great job and has thrown his hat into the ring, which is also great.  We had our second Board Planning Committee meeting this week.  Two major initiatives that the Committee is dealing with are the creation of our strategic plan for Fiscal Years 15-17 and completing a Master Facility Plan for our campus as well as all of our properties.  Our business is changing so rapidly that we are already doing a MFP on a new hospital.  Go figure.  I guess that it is important to remember that the new hospital was designed between 2004 and 2006; a lot of what exists today or is on the horizon for the future wasn't even being contemplated back in 2006 when construction began.  

Now for the personal.  I have had a cold for the last three weeks and I hate colds.  Last night it expanded into a fever and I was just feeling really lousy.   But, then you hear around the health system about the granddaughter of one of our employees dealing with brain cancer, an Alliance attorney diagnosed with pancreatic cancer and my own son-in-law not knowing whether or not the large tumors on his knee and femur are cancerous.  No matter what the diagnosis, he is in for a rough road ahead.  My problems under those circumstances were absolutely minuscule compared to theirs. Well, God speed to the three previously mentioned and their families. You all are in my prayers. Have a great weekend and get ready for more snow.............when will this winter end?????

Friday, February 21, 2014

Finding a Name for the Alliance

For the last nine months, the alliance of Western Maryland Health System, Frederick Regional Health System and Meritus Health has been trying to find a name.  We thought that we were okay with Alliance Health, and it turned out that there was an insurance company somewhere in the Midwest with the name Alliance Healthcare.  Then, we tried to move forward with Concordant Health; not the best name, but it seems that there are less and less names out there.  We just learned today that name is not available.  Concordant Health Solutions is a Michigan-based consulting company so, that name is out.  I don't quite understand that there can be derivations of the name Alliance Health and Concordant Health that others such as insurers, consultants and providers have used, but we can't.  

Now, I do remember a few years ago when Allegany College of Maryland dropped "Community" and added "of Maryland" to its name.  Allegany College of Maryland received cease and desist letters from Allegheny College in Meadville, PA, just north of Pittsburgh.  They said that the name was too confusing for potential students applying to their college.  Really?  If their students can't figure out the difference between Maryland and Pennsylvania, who would want them as a student at their college.  Then, it was that Allegany College of Maryland has campuses in Pennsylvania and that was too confusing for their prospective students.  I rest my case; who would want those navigationally challenged students anyway.  Allegany College of Maryland pretty much told them that we will use "of Maryland" extensively, but other than that, we weren't changing the name.

Getting back to the issue at hand, we need a name for our three health system alliance.  At this point, I would welcome any suggestions that you may have.  Give it some thought and let me know.  Thanks!

Thursday, February 20, 2014

Contrasting Writing Styles

Each day, I read the Wall Street Journal and the Washington Post in order to get two different perspectives on issues.  Yesterday was no different.  In reading the story about the Congressional Budget Office's announcement that increasing the minimum wage to $10.10 per hour by 2016 from $7.25 (a 40% increase) would eliminate 500,000 jobs; the spin that each newspaper put on the story was interesting.  

The Wall Street Journal focused on the benefits of such an increase on teenagers and the middle class; an unintended consequence and not really the poor.  That perspective was never given in the Washington Post article.  WP focused on a nationwide survey that said that the majority of Americans want to see an increased minimum wage to $10.10.  A perspective that the WSJ never mentioned.  The WP also interpreted the same CBO numbers as greatly benefiting the poor.   The rest of the articles pretty much mirrored each other.  

The articles continued with the White House economist saying that increasing the minimum wage would have zero effect on jobs.  Really?  Pretty much every article written about minimum wage speaks of some job loss with those who are supposed to benefit from the increase being negatively impacted. 

From my perspective, the minimum wage should be set by each city / county in a state and not national level.  The cost of living in NYC, Washington DC and LA is dramatically different than rural America.  This is the approach that is being encouraged in Maryland.  In those jurisdictions surrounding DC and in Baltimore, a higher minimum wage may be justified.  In western Maryland, a statewide or federally mandated minimum wage could possibly force many small businesses to close.  Tough issue with lots of different perspectives.

Wednesday, February 19, 2014

Way To Go Bill Russell

Yesterday, Jeannie Seifarth of the WMHS Leadership Institute shared a leadership tip on teamwork and it had a very recent quote from Bill Russell, the basketball great.  

You see, last week LeBron James was asked who his Mount Rushmore of all time professional basketball greats consisted of.  LeBron responded with his choices: Michael Jordan, Larry Bird, Magic Johnson and Oscar Robertson.  He added that he will be one of the top four greatest who will have ever played the game, as well.  

Left off of that list was Bill Russell the former Boston Celtic who was one of the greatest basketball players of all time.  Bill Russell's response to LeBron when asked by a sport's reporter about being excluded, "Hey thank you for leaving me off your Mount Rushmore.  I'm glad you did.  Basketball is a team game, it's not for individual honors.  I won back-to-back state championships in high school, back-to-back NCAA championships in college, I won an NBA championship my first year in the league, an NBA championship in my last year and nine in between.  That, Mr. James, is etched in stone.”  

Good for you, Bill, still blocking shots at 80 something. I am sure Bill was kidding to an extent with his comments because he has a great sense of humor.  But, his points are well taken—it takes a team.  

Certainly, LeBron is entitled to his opinion as well as his Mount Rushmore choices of basketball greats.  My problem is with his self-promotion that he will be the greatest to play the game.  Is he a great player, certainly, but we all know it.  We don't need to be reminded of it by him.  

Also, while I am at it, why does ESPN have to constantly generate a media controversy.  You would hope that players former and present wouldn't fall into the media's trap, but they do almost every time.  Thanks, Jeannie, I so enjoyed reading Bill Russell's response after reading LeBron's self-centered remark last week.

Monday, February 17, 2014

Treating Hunger As a Health Issue at WMHS

At WMHS, we are already doing a variety things in dealing with hunger in our region.  We have both a financial and governance relationship with the Western Maryland Food Bank.  Our Ladies of Charity pack backpacks for students in need each Friday and we support the Union Rescue Mission in a variety of ways from food to Christmas families.  Our Community Benefit contribution was $40 million in 2013 of which some of those monies addressed hunger in our region.  

In early March, we have a Ruby Potter disciple, Terie Dreussi-Smith, coming to present on "Bridges into Health: Strategies to Reduce Inequities and Improve Health Outcomes.” With the growing social needs, including hunger, we have invited Terie to present on strategies to assist us with our growing safety net responsibilities.  As a health system, we need increase food security for families in our community as there is a direct correlation between hunger and health status.  We also need to guarantee appropriate food intake, especially for our diabetic patients and others with diet-sensitive diseases.  

The care of our patients has changed so dramatically over the last three plus years, so treating hunger as a health issue makes perfect sense.

Thursday, February 13, 2014

Congress and the RAC Process

It was encouraging to see a letter from 111 members of Congress on February 10th related to the heavily flawed Recovery Audit Contracting process to Health and Human Services Secretary Sebelius.  The letter details the huge administrative burden that has been imposed on hospitals based on a flawed incentivized arrangement for Recovery Audit Contractors.  The RACs are paid a commission on the dollar amount of claims up to three years after services have been rendered.  Their commission ranges from 9% to 12.5% of the claims that they deny.  They pretty much deny every claim and once the appeal gets to the Administrative Law Judge (ALJ) level, the appeals are overturned since there are no incentives for the ALJ.  The problem is that the average ALJ can process 1000 appeals per year.  With the number of judges hearing appeals at 65 across the US, it would take a 77 years to get through the current backlog.

 Last month, CMS announced that it will now take up to 3 years to get a decision at the ALJ level.  The law states that a decision is required in 90 days.  The problem is that CMS can recoup funds at the first two appeal levels before the ALJ appeal.  So, CMS keeps their money, RACs receive their commission and hospitals that have provided the care are not paid for the care that has already been delivered.  What is important to note is that we have only lost one appeal at the ALJ level.  We are providing the appropriate care to our patients and that has not been lost on the administrative law judges.  Under any other circumstance, the RAC process would be shut down and its operators and beneficiaries would be charged with fraud.  But, because it's the federal government, it is allowed.  

Another interesting tidbit, yesterday CMS held a forum in DC to provide information on the RAC process.  Our Compliance Officer and General Counsel attended.  The gist of their message:  here are the things that you hospitals can do to bring improvement to the process.  They are finally looking to automate the process since it has been a mail process since inception.  They expect to be fully automated by 2016.  Where have we heard that before?

Wednesday, February 12, 2014

Since When Has Maryland Become Minnesota

Twenty-five years ago, I moved to Maryland, but this winter I now find myself living in Minnesota.  What happened?  In my neighborhood, we got about 8 inches of snow last Monday.  Then on Wednesday, two inches of ice.  To round out the week, another four inches of snow on Sunday.  And the entire time experiencing well below freezing temperatures.  To add insult to injury, another five to eight inches starting tonight and continuing through Thursday.  This morning, the temperature was ZERO.  The older I get the more I HATE winter.  My eventual destination post retirement will be Hilton Head and even there it's been winter.  I never imagined returning to Florida to live, but I may have to re-think that idea.  

I have also noticed that there hasn't been a lot of talk about Global Warming this winter.  Al Gore has quietly transitioned to dialoguing about Climate Change.  Could we do a better job of taking care of our planet?  Sure!  Is there more hype than substance to global warming and climate change, most definitely.  Remember, Spring is only 37 days away.

Tuesday, February 11, 2014

Private Sector CEOs Becoming Hospital CEOs En Masse

I read an article in Chief Executive magazine on the change that is occurring in hiring hospital CEOs. According to the article, hospital and health system boards are now pursuing replacement CEOs from private industry rather than experienced members from the hospital C-Suite.  They say that they want an outside perspective with the move away from a fee-for-service environment.  Sorry, but I am not buying it.  

With the changes occurring in health care today, there may be a unique situation whereby someone with a certain background is deemed to be well suited for a particular health system, but as a rule of thumb, no way.  The article cites a banker taking over a struggling health system in Miami.  They cite four additional examples where a consultant, a university president, a lawyer and a supple chain executive became hospital CEOs.  How many of them were hospital board members who thought that they could make the transition from oversight through governance to running the hospital, a business that Peter Drucker has called the most complex industry to run?  Again, there may be unique situations requiring a unique set of skills but the two-thirds of replacement CEOs expected this year coming from outside of health care ain't gonna happen.  

If CEOs from private industry think that there are too many regulations in their respective industry, try 122,000 federal health care regulations that health system CEOs have to be responsible for in their everyday work lives.  That doesn't include State regs, OSHA, IRS and list goes on.  They also have no experience in working with physicians unless you are the university president who could draw on his or her experience in dealing with faculty, which requires a different set of skills.  You just don't tell physicians that this is way it's going to be done so just go out and do it because I said so, as I have heard my business colleagues suggest from time to time.  

Now, I have seen an increase in the number of physicians being asked to become CEOs of a hospital.   If you have a physician who is a champion of the changes that are occurring in the health care delivery model, who embrace the triple aim of health care reform, who understand quality-based reimbursement, who are in tune with population health and is an adopter of evidence-based medicine, then you may have the right person for the job.  Taking someone from the private sector may work in certain circumstances, but not as the solution stated in the article.

Monday, February 10, 2014

An Exceptional Response, As Usual

Around 2:20 PM yesterday, a tour bus traveling from Altoona, PA, to Rocky Gap Casino went out of control and crashed.  The result of the crash was that 15 of the 26 passengers came to our Trauma Center and the remaining passengers were transported to UPMC Bedford.  Our Command Center was activated and the response was overwhelming.  The ED staff, the Lab, Radiology, Respiratory Therapy and a host of others, including many docs who were off, responded to assist.  For the most part, the passengers were treated for minor injuries and released.  Nonetheless, the dedication and teamwork when an incident like this one occurs is amazing and makes one proud to be associated with WMHS.

Friday, February 7, 2014

Taking That Very Difficult Step

This week our Alliance partner, Meritus Health in Hagerstown, announced that they were eliminating 120 positions by next week.  The cut will impact about 60 employees, including 43 with a reduction in hours.  As soon as the Meritus announcement became public, the other two Alliance Health hospitals were contacted by the local media in Frederick and Cumberland as to whether or not the staff reduction was related to the alliance.  The answer is no.  

Over the next few years, there will be less positions because of the alliance, but the objective is to control the reductions through retirements, turnover and attrition.  As few people as possible will be impacted through the creation of a Management Services Organization or MSO.  We are projecting considerable savings through the MSO, but at the same time recognize the importance of jobs in each of our communities.  The MSO savings will also allow us to save dollars that we would not be able to if we didn't form the alliance.  

We can certainly sympathize with both the leadership at Meritus as well as the employees as we took a similar step in 2012 when we had a net loss from operations.  When over 75% of our operating budgets are staff and “stuff,” there are only so many places to look for savings.  In FY'12, WMHS reduced our operating budget by $8 million; Meritus is projecting a $6 million to $7 million savings through their reduction.  

All hospitals are feeling the impact of changes in health care and we have to work together to ensure that care delivery improves while we reduce the cost of care.  This is why our new alliance, Alliance Health, with Meritus, Frederick and WMHS, is so important for both the current day as well as the future.

Thursday, February 6, 2014

CVS and Their Decision to No Longer Sell Tobacco Products

It is admirable that CVS has joined the many independent pharmacies across the county in deciding not to sell tobacco products.  Most pharmacies haven't sold cigarettes in decades, but as of October 1, 2014, CVS will cease their sales.  The impact on CVS is around $2 billion in cigarette sales alone, WOW!  Now you know why it took so long.  Still no word from Walgreen's, the primary competitor to CVS on their decision, but they can't hold themselves out as having a strong commitment to health care, but continue to sell cigarettes.  Then there is Walmart that continues to sell cigarettes while espousing their commitment to healthier communities.  An interesting tidbit on that subject; last year at a Governance Conference, one of the WMHS board members asked the Chief Medical Officer for Walmart who was talking about their commitment to health care now and into the future as well as lecturing hospital leaders on the cost of health care, why Walmart continues to sell cigarettes and unhealthy foods if they are so committed to health care?  His response was that they continue to study the matter, but recognize that something has to be done.  I guess not anytime soon since the sales of both continue and will most likely grow.  By the way, Target has never sold cigarettes in its stores, but there is welcomed news for smokers; the dollar stores that seem to be opening another new store on an hourly basis, at least in my area, are now selling cigarettes at their locations.  They say that their shoppers at these discount stores tend to be smokers and they are trying to meet their needs.  I guess they never thought to do something responsible and not sell cigarettes in an attempt to get their shoppers healthier so they are around longer to shop in their stores.  Oh well, congrats to CVS on your decision but why does the decision take eight months to implement

Tuesday, February 4, 2014

Vinnie, You Just Can't Help Yourself

I just read a blog by Vinnie DeMarco, who runs the Maryland Citizen's Health Initiative, on the new Medicare Waiver in Maryland.  It didn't take long into his blog for Vinnie to insult all Maryland hospitals.  He describes life for hospitals under the new waiver that pretty much reflects what WMHS and nine other Maryland hospitals have been involved with over the last four plus years under Total Patient Revenue.  But, then he goes onto describe how Maryland hospitals will try to game the system by encouraging costly patients to go to other hospitals and skimping on care by discharging patients to skilled nursing facilities.  

All of our work over the last three years, which resulted in WMHS dramatically reducing readmissions, admissions, ED visits, observation stays and ultimately reducing cost of care, which resulted in WMHS paying money back to the State based on our achieved savings, seems to be for not.  In addition, what Mr. DeMarco fails to realize is that we have truly bent the cost curve under value-based care delivery, that the Health Services Cost Review Commission has been monitoring the performance of all hospitals under the Total Patient Revenue payment methodology for the last three years and that they will begin to monitor all of the hospitals in Maryland as to their compliance with the waiver.  The bottom line is that if we don't meet a lot of predetermined targets, Maryland hospitals will lose the waiver.  All Maryland hospitals have agreed that is not an outcome that we want so, gaming the system isn't an option.  

He complains of hospitals preparing to deliver too little care.  Grant you, it is a delicate balance when you begin to provide care in the most appropriate setting which may be in an acute setting, but it also may be in a clinic, a physician's office, a skilled nursing facility or even in the patient's home.  You can't accuse hospitals of driving up volume and the cost of care in one sentence and failing to deliver care to the patient in the next.  After a great deal of hard work, TPR hospitals have figured out that balance as the remaining Maryland hospitals will in the near term.

In closing, I found Vinnie's last sentence interesting in that the Maryland Citizen's Health Initiative is going to work with every stakeholder possible, including providers, as we make this journey together.  He certainly has a funny way of setting out on this self-described "collaborative" journey.