One More Mountain Dew

It’s been seven weeks since I last put any thoughts to paper in this space. My last item (“Killing Healthcare”) about the financial crisis facing hospitals and medical groups remains unfortunately in the continuing Covid-19 era still relevant. It’s been a depressing time. I really wish I could do something from here on the beach for the great people working in these organizations.

As if to confirm the ongoing crisis, a specialist doctor I know contacted me several weeks ago for advice. He had to close his office per state direction during the first three months of Covid and it devastated his practice financially. A solo practitioner not part of a larger healthcare entity, he was seeking possible salvation by exploring the possibility of giving up his independence. I did what I could to open some doors for him.

Something has changed, however, during the past seven weeks. The use of digital technology has allowed changes to occur in business models including in healthcare.

One modest example—as soon as the ban on visiting physician offices was lifted my primary care doctor’s office reminded me that I was now a little overdue for my annual physical, something I prefer to avoid but always get snared. I dutifully went to my scheduled appointment in an office newly configured and awash in hand sanitizers. I felt a little like Typhoid Mary. I surprised (disappointed?) my doctor by being in good shape for the shape I was in. He ordered some blood tests and said his nurse practitioner would contact me for a video conference about the results.

Video conference? That was new and a week later she and I were viewing each other as we discussed my results. She did seem disappointed that all my lab values were normal, something she says she seldom sees. I felt bad for her. She did get me on my Mountain Dew consumption. I felt good for her.

Video and digital technology seems to be the wave of the future and it is working. My gym is still closed but in the interval I threw away ten years of accumulated trash in the smaller of our two garages and installed a NordicTrack rowing machine and a very trendy Peloton bike which has a somewhat frightening cult following. I now have a nifty home gym. I did promise my wife she can use the rest of the garage to store her vast collection of Christmas decorations but I am hoping she forgets.

Each piece of my home gym equipment has a video component with live and on demand classes. They are fun and demanding and not every instructor is in his or her twenties. Each time I take a class I produce a variety of metrics which are stored for me to review. I can now confirm digitally that I am out of shape which my family has been confirming visually for years.

In both instances, the nature of my interaction has been changed, probably forever. Doctor visits will be changed even when Covid-19 is no longer in the forefront of our minds.

Similarly, I am not sure I will ever need to step into a gym again now that I have a high tech home gym and am a Peloton cult member. My username is “garycal” and sadly I am a member of the Peloton over 60 group. High five me digitally if you see me on the leaderboard (way down on the leaderboard).

So perhaps in this dismal time there is hope and something good will come from the forced changes we have all endured. I believe that to be so. In the meantime I will end this item as I need a Mountain Dew.

Killing Healthcare

Now that the initial surge in COVID-19 cases seems to be flattening, the cost in terms of lives is becoming clearer. Patients in nursing homes seem to be particularly vulnerable.

Caregivers including physicians, nurses and other bedside staff have paid a terrible price in coming down with the disease and sadly some have given their lives. As I indicated a few weeks ago, we need to become wiser in preparing for any new surge in COVID-19 or new virus which may afflict us in the future.

There is another horrible dimension to this pandemic which is only now becoming more apparent. COVID-19 has laid waste to the financial health of our healthcare system. It is killing the organizations we rely upon to care for us when we are sick. This includes integrated healthcare systems, freestanding hospitals and independent medical practices.

This financial carnage became apparent to me this week when I read Sutter Health’s “VOLUNTARY NOTICE OF EVENT RELATED TO COVID-19”. This was an eleven page disclosure to holders of its various bond issues and it paints a very concerning picture of the effects of the pandemic on Sutter’s financial status.

In this document, Sutter outlines the massive decrease in volume of all categories of patient care as well the extraordinary increase in expenses as it prepared for what could have been an overwhelming number of COVID-19 patients. As it has so far turned out, the number of people with the virus requiring hospitalization was not as great as some predicted. Hopefully, that will continue to be the case. Sutter like most health systems and hospitals had to be prepared for the worst.

This perfect storm of decrease in normal patient volume and increase in expense means that for the first quarter of 2020 ending March 30, Sutter had an operating loss of 236 million dollars. That is a staggering figure.

For the month of April, Sutter had an operating loss of 360 million dollars. That is an operating margin of negative 50.57%. These are sobering amounts for a heretofore financially strong health system. Sutter in its disclosure raised the possibility that if this trend continues it might be in violation of one or more of its bond covenants. Sutter’s disclosure statement can be found by going to the following article in the Sacramento Bee and clicking on the link in the article about Sutter: .

Sutter is not alone in its now weaken financial condition. Other large health systems are beginning to report similar situations. The Mayo Clinic, as one such example, has suffered massive financial losses as a result of this pandemic. Recovering from this magnitude of financial devastation will be difficult and many may not be able to do so without outside assistance.

I have been afraid to ask my successor at the smaller health system I spent 35 years as CEO what the financial impact of COVID-19 has been. We spent many years building our reserves for a rainy day but this virus is much more than a rainy day. I thought when I retired that I had left my organization in excellent financial shape. I worry about the long term effects of this scourge on healthcare in my community.

There has been some financial relief from the federal government and while appreciated it has not been nearly enough. There is hope that the next round of federal assistance currently being considered by the Congress will result in more financial aid but there are other damaged sectors of the economy competing for the same consideration.

California is considering how it might assist healthcare providers. Whether any significant aid is possible in light of the state’s burgeoning deficit due to COVID-19 is problematical.

I fear that if there is a second surge of this scourge later this year and it is recommended that we adopt the same closure of “elective” services, we will kill in a financial sense healthcare providers. Hopefully, we have learned lessons from the last few months which will allow a more nuanced approach to containing the virus while allowing healthcare providers to also survive.

Why Do We Have Hospitals—Revisited

National Nurses Week begins on May 6 as it does every year. The theme this year is Compassion/Expertise/Trust. Honoring the nursing profession is especially meaningful this year given the role nurses have played in the continuing struggle against the Covid-19 virus. Nurses are part of a team and their role is pivotal. Last year at this time I wrote and published in this space some thoughts about the nursing profession and how it affected my perspective on patient care throughout my career. Those thoughts from last year are I believe worth repeating and they follow.


Many years ago when I was newly promoted to Chief Operating Officer of a large hospital in Berkeley, I was asked by the Chief Nursing Officer who had been my peer but was now my subordinate this question:
Why do we have hospitals?

I offered several fumbling answers, each of which she told me was wrong. I was beginning to think she was trying to put newly promoted me in my place when she gave me the correct answer: Because patients need nursing care. That’s the reason they are admitted.

She was right then and she would still be right today. The fundamental reason why patients are in the hospital is because after everyone else has had a go at them, they require the care and attention of a nurse to recover.

While nursing care continues to become more dependent on technology and requires increasingly more education and training, it still is at its core a one-to-one relationship with the patient.

My introduction to the profession of nursing took place as part of my graduate education. I was in the minority of my graduate program cohort in that I had no clinical background. That’s how I found myself doing the duties of a nurse’s aide in a Bay Area hospital for four months before my first semester.

I worked alongside nurses and saw them using both high-tech and more importantly high touch in their care of patients. One situation I will never forget was watching late one night from across the intensive care unit a nurse brushing the hair of a seriously ill teen age girl who was crying, offering her comfort with her words. I watched that girl get calm and for the first time understood the importance of nursing.

Another time I was working in the emergency service when an elderly woman in cardiac arrest was brought in. She had been on a passenger train when she fell ill. My job was to fetch things for the doctors and nurses as they tried to revive her to no avail. When the patient was declared dead, one of the nurses asked me to remain in the room with her and the patient. She told me that what we were about to do was as important as all the efforts to save the patient’s life. Our job was to prepare the patient to be seen by her husband who was waiting elsewhere in the hospital. She said it was important that he see his wife as he remembered her and not as someone with tubes and other equipment connected to her. That nurse taught me that caring for the patient sometimes means caring for others as well.

I saw other nursing interventions that continue to move me emotionally even many years later. Often, it seems that the only person taking the time to truly understand the concerns of patients is the nurse.

I am proud that there are now nurses in my family. It is a great profession with many avenues of opportunity. Whenever I can, I encourage young people to explore nursing as a career.

While the nursing profession now has many important roles outside the hospital, I remain partial to hospital nurses because, after all, that’s why we have hospitals.

May 6 is National Nurses Day and that week is National Nurses Week. If you know a nurse, give her or him a thank-you for what they do. They deserve the recognition.

Becoming Wiser

“Any fool can know. The point is to understand.” Albert Einstein

Since COVID-19 began affecting my life, this fool has resisted adding to the items I have posted on this site. Instead, I have tried to understand the dynamics of this interesting and disconcerting time.

My life has changed and not for the better. It has been weeks since I have seen my seven grandchildren even though they live close by. I have been told over and over again in the media that because I am over a certain age I am fragile. I think the word is stamped on my forehead.

Because my daily exercise must now come from fast walks around the neighborhood rather than in a gym, I have to watch out for rattlesnakes in my path while I try to not be fragile. I am considering getting a Peloton exercise bike but the video instructors seem dauntingly fit and I am not.

I get excited when my wife and I go out to lunch occasionally by going through the drive-thru at Chik-fil-A and then finding a remote spot in the parking lot to eat. Sort of like high school.

Things have changed dramatically as well in healthcare. Politicians no longer seem concerned about price transparency, an issue I have always thought was more hype than real at least here in California. Now the number of ventilators and the supply of personal protective equipment consumes elected leaders.

Governors are elbowing each other to get on cable news programs. You can see New York tough and California cool everyday. Other healthcare related issues once thought to be important have disappeared because of a virus.

Hospitals and the people who work within them are now hailed by the pols as heroes and heroines rather than the source of wasted expenditures. They have always been worthy of praise but maybe COVID-19 is helping people to remember that. I hope that memory lingers on after the pandemic itself becomes a memory.

A pandemic reorients viewpoints and issue priorities. Maybe the fools are beginning to understand the fragility of healthcare institutions and public health. One can hope.

I have come to understand some issues that we within healthcare must become wiser about. We have allowed ourselves to worship without regard to consequences at the altar of reducing costs. That is how we find ourselves at the mercy of a totalitarian country which produces most of the basic supplies like masks and gowns used in healthcare facilities. We need to be willing to spend a little more so that other countries including our own are encouraged to produce such necessities. That’s called spreading the risk.

We need to reconsider in hospitals how staffing patterns are determined. There has been great pressure from the politicians and others to keep staffing at a minimum level consistent with patient need. This works until demand for services greatly increases and suddenly you have more patients than staff to care for them. We will need to build more flexibility to meet staffing needs in the next pandemic.

Becoming wiser will not come without costs. The current COVID-19 situation has laid waste to even financially strong healthcare organizations. When you hear about layoffs in the midst of the pandemic at organizations like Mayo Clinic, you know that things are bad. Will smaller healthcare organizations be able to survive?

Which brings me to a quotation by John Ruskin I have often written about and which hung on the walls of my office during my career:

“There is hardly anything in the world that some man cannot make a little worse and sell a little cheaper, and the people who consider price only are this man’s lawful prey.”

Here’s to becoming wiser.

Women of Influence

I was reading my local Sunday newspaper this weekend while on the beach. Reading the Sunday newspaper use to take at least one hour but now I can do it in twenty minutes or less. Change has wreaked havoc on this particular mode of communication.

This particular Sunday, however, there was an insert recognizing local “Women of Influence” complete with photos and brief biographies of each woman. My old organization’s three female senior managers were among the honorees. I was very happy to see that. Each has immense responsibility and was worthy of that recognition. As I wrote to them, the only change I would have made would be to call them “People of Influence”.

Reading about my former colleagues got me to thinking about the female senior managers who had influence on me or whose skills as managers impressed me and made my job as CEO easier.

I first thought of a woman who was an Assistant Administrator (now we call them Vice Presidents) at the hospital where I had my first administrative position. She was a graceful, experienced manager who was old enough to be my mother. I was a twenty-three year old senior manager (in those days it was possible to be hired into a senior management position right out of grad school) who had more opinions than wisdom. She tempered my opinionated self even though she was technically my peer.

One day, I was carrying on about an assistant administrator at the rival hospital in Berkeley whom I did not like simply because he was at the rival hospital. That made sense to me but not to her. She brought me up short and told me about how community-oriented that person was and what a great person of integrity he was. That person I did not like later became a colleague and even later a valued consultant to me. He remains a friend to this day. Thank-you, Margaret, for educating this ignorant young person.

A few years later, I became the chief operating officer of that hospital and the nursing function was part of my realm. We had just recruited a new chief nursing officer who had a strong academic background and even stronger views about what a professional nurse should be. She challenged me, not in a disrespectful way, to learn about the nursing profession. In a story I have told many times, she early on asked me why are people admitted to hospitals? I fumbled with my answers, finally saying it was a place for doctors to do their work. Wrong answer, she emphatically replied. Patients are admitted to hospitals because they require nursing care. As I thought about it, I realized she was right. One more woman of influence in my professional life. Thank-you, Geraldine.

When I became CEO at the place where I would spend almost thirty-six years, I brought the lessons I had learned in Berkeley. I was blessed over the years at the new organization with strong managers of both genders, most of whom did not hesitate to confront me if they thought I was wrong about something. Given my opinionated ways, there were many such discussions.

That first year as CEO, I had only one senior manager who was female. She was not particularly welcoming as she had hoped one of the other existing seniors managers would be named CEO by the board rather than an outsider. She was tough on the me, making it clear I would not have a reserved parking space. Never having had one it was no loss although I wondered who was the CEO in this relationship. As we developed a relationship which would always be a little rocky, I appreciated the zeal she brought to her job and the loyalty she earned from others. Thank-you, Alison for making sure my head size did not grow.

As the years went by and my organization grew, so did the number of senior managers until one day, I realized that half of my senior managers were female which was at the time unusual. It was not because I was somehow enlightened. It was simply a process of elimination during the recruitment process—the best got the job.

That group of female senior managers were the key to what became an explosive era of growth. In the process, they became role models for other women in the organization. Most had a long tenure; two were with me for thirty years or more and they were all fantastic managers. Thank-you Deborah, Elnora, Kathy, Margy, Bridgit and Pam.

The three female senior managers recognized this week joined the organization in 2014-15. They inherited a culture that they have made better. They walk in the shoes of some great senior managers of both genders but each in her own way is putting her stamp on the organization. Thank-you Aimee, Traci and Nicole.

When I read about the glass ceiling women face in other industries, I have to laugh. How backward is it to think that women are not as capable as men? Healthcare proves that wrong everyday.

Covid-19: Close To Home

Normally I prefer in this space to address issues in healthcare which have wider applicability rather than being just NorthBay Healthcare focused. After all, I retired almost three years ago after being NorthBay’s CEO for over 35 years. It was good to be the king. It’s even better being on the beach.

However, NorthBay Healthcare and, more specifically NorthBay VacaValley Hospital, was the center of media attention for two days beginning last Thursday. Fate delivered to NorthBay VacaValley Hospital the first known Covid-19 patient in the nation who had no travel history to China or known exposure to a Covid-19 carrier.

Important questions were raised about how this virus could have been transmitted to the patient given the apparent lack of exposure to someone who had been afflicted with it. Local, state and federal public health officials are pursuing the answer.

Meanwhile, the media has been in a frenzy about this new viral disease which so far seems to be relatively mild in effect for most people. General assignment reporters recast themselves as public health sleuths while asking inane questions of real public health experts. Cable news programs depending on their political leaning blamed either the President or the Speaker of the House for just about any development involving Covid-19. It became a political virus too.

NorthBay’s Vice President of Public Affairs (the person who twisted my arm ten years ago to write a blog for NorthBay so blame him for my continued blogging) particpated in a televised press conference with public health officials. He did a great job of explaining how the hospital had followed the guidelines of the Centers for Disease Control and Prevention before transferring the patient to the University of California, Davis Medical Center which also followed the guidelines. The media seemed to be looking for a villain among the various officials at the press conference but in a fast moving situation my impression was that everyone did the best they could given the circumstances.

Locally, I have heard of many concerns. People seem to forget we endured a world-wide pandemic in 2009 (the H1N1 or “swine flu”) which also had a China connection. Social media this time seems to be having an outsized effect on people and is stoking fear.

One of the things we often forget is how dependent we are on hospitals and the people who provide or support patient care. Every day these people put themselves at some risk as they help patients get better. To me, the staff at NorthBay VacaValley Hospital who treated this patient are heroes and heroines deserving of recogniton and acclaim. I wish I could thank each and everyone for their dedication to caring for the community.

Unfortunately, several NorthBay staff have already tested positive for Covid-19 and many others are being continually tested. Now that the virus has escaped the confines of cruise ships and hospitals, all of us are going to have to become both more observant of good hygiene and more responsible for isolating ourselves from others should we fall ill.

I suppose I am completely biased but I believe NorthBay’s management has performed admirably in a fluid, uncertain situation. Ironically for this situation, my favorite President, John F. Kennedy, once pointed out the following: “When written in Chinese, the word ‘crisis’ is composed of two characters. One represent danger and the other opportunity.” Covid-19 is both.

A final comment. Last Friday morning, the day after the news of the NorthBay patient made international headlines, I was at NorthBay’s medical fitness center which is directly across the parking lot from NorthBay VacaValley Hospital. In the locker room I was asked by someone who knows of my previous NorthBay position if I had any information about what had happened the day before. As I began thinking about how to carefully compose an answer about Covid-19, he further elaborated his concern by saying that he and others wondered why the power was off for a hour in the morning which prevented any workouts.

Perspective and proportionality is everything.

Trefoils and Lemon Cookies

When I accepted an offer way back in the dim recesses of history to become the CEO of the hundred and ten bed primary care hospital which would become NorthBay Healthcare, the Board Chair told me that his colleagues really wanted me to find a house in the service area. It was important, he said, that my family and I be looked at as part of the community the hospital served. At the time, I was commuting thirty miles from the eastern fringe of what would become Silicon Valley to Berkeley so I said I would do my best to comply. Not having a commute seemed attractive.

1981 was a grim year for buying a new home. Mortgage rates were at 16% and new housing starts were at an all time low. After several months of futility, I told the Board Chair that I had finally found a suitable home but it was in another county and would require a commute. He looked me in the eye and said “Try harder”. I got the message and eventually found a house which was our home for thirty years. I never liked that house but my family truly became part of the community.

I thought of this history because of several things which happened to me recently. Last week I was minding my business in the waiting area of a car wash when a woman in nursing scrubs came in. She paused and looked at me and asked “Are you Gary Passama?” That question always causes my heart to skip a beat. Why, I wonder, was she asking?

As I suspected, she was a NorthBay nurse and had just completed one of her regular 12 hour shifts. She said we had met at her new employee orientation six years ago and liked what I had said about NorthBay’s culture. She then pointed to her name badge and I congratulated her on her degree. No, she said, that was not what she wanted me to see. I took a closer look and then I saw what she was so proud of. She had a daisy symbol on her badge which meant she had been recognized as an extraordinary nurse as part of a program from the Daisy Foundation. She deserved great praise for this achievement and I thanked her for the great patient care it represented. She turned red in the face and started fanning herself. It was wonderful to be able to recognize her personally even though I am almost three years on the beach.

The next day I was with one of my daughters-in-law in a local supermarket. My job during these forays is to keep my twin two year old grandsons distracted in their stroller while their mom races up and down aisles food shopping. We got to the checkstand and there was a NorthBay nurse whom I have known for at least twenty-five years. We hugged (I know, I probably violated at least five laws but they do not apply when you are on the beach). She saw my grandsons and told me that she had just become a grandma for the first time. We talked about the joys of being a grandparent.

Later that week I was standing in line at a Panera Bread store. My mission was to buy two chocolate chip cookies. I was ashamed of myself as I watched other customers order kale salads and other such curiosities. As I looked around I spied another NorthBay person. She is NorthBay’s face to businesses as well as resource for the public’s questions about health plans and Medicare. I violated the law again as we hugged. She is a bubbly person with a great personality and an iron will. We talked about healthcare in general and our families.

I bring up these instances because I fear that as healthcare has become more corporate in nature we are losing a connection to the community, something that board chair felt was very important. When you live in the community served by your organization, you cannot avoid praise as well as criticism. I think that makes you a better manager and your organization more responsive.

NorthBay’s main competitors are Sutter and Kaiser. They have many other geographic areas that also require management attention. Their local top managers cycle through every few years but never become a part of the community. That weakness is a competitive advantage for a local healthcare system or small business competing against a big guy. A NorthBay senior manager living in the community has no place to hide.

One more story to tell—this week as my wife and I were leaving a pizza joint (no kale salad was on the menu, thank goodness) we heard “Mr. Passama, Mrs. Passama!” We turned to our right and there in front of the next door store was a small table staffed by very young Girl Scouts selling Girl Scout cookies. Behind them were two women who were the moms of the girls, both of whom were NorthBay staff members and former middle school students of my retired Science teacher wife. They were the ones calling our names.

I am a sucker for Girl Scout cookies. My favorite are the Trefoils, a shortbread cookie. While my wife talked to her former students, I listened to the sales pitch from the girls. They were well trained. When they learned I liked Trefoils they made sure I got a box. They then began extolling the virtues of a new cookie available for the first time this year–lemon cookies. I took two boxes. That made a total of $15.00. I gave them a twenty and told them to consider the $5.00 change as a donation. That sparked a brief argument among the girls as the donation apparently could be applied to two different possibilities. I suggested they take a vote but the oldest girl said she had already marked the donation in a specific column on the order sheet and that was that. That girl will someday be running Sutter or Kaiser or even better, NorthBay.

I am glad I tried harder and became part of the community that our relatively small but mighty healthcare system served. What I missed out on the national stage was more than made up by feeling like I had made a positive impact locally.

I also liked the lemon cookies. Try them the next time you see a Girl Scout in your community selling them.

Cylinders of Death

One of the great advantages of being figuratively on the beach is that you have more time to occasionally really be on the beach. Put another way, I just got back from spending eight days on a beach on the island of Kauai. If you bear with me I will by the end of this brief piece find a way to tie my Kauai beach experience with a few healthcare comments.

We have been to Kauai several times and compared to the rest of the islands in Hawaii it is by far the most laid back island. Life is slow and languid. The island is very rural. Even the one city of any size is not particularly large. Nothing much happens on Kauai. That’s the whole point of Kauai.

There are the chickens thoughout Kauai. They are everywhere. It seems that Hurricane Iniki which devastated Kauai in 1992 destroyed every chicken coop on the island. The birds took flight to the extent chickens can fly and left the roost. Kauai, being a verdant place, made it possible for the chickens to flourish. The roosters and hens did what roosters and hens do and they quickly multiplied.

Today chickens are everywhere in Kauai. I encountered them on my daily morning beach walks.

We found chickens running around thousands of feet above sea level at the top of Waimea Canyon. Then there were the chickens running around the many open air restaurants hoping for a crumb or two despite the signs (ignored by tourists) not to feed the chickens.

I became convinced that the Kentucky Fried Chicken stores on the island simply opened their doors early every morning after sprinkling bread crumbs and in walked their daily supply of nuggets. Kauai chickens are most definitely free range birds.

When not counting the chickens and avoiding the occasional aggressive rooster, I indulged my love of hot dogs. Kauai is the home of Puka Dog, a hot dog stand made famous by the late gourmand Anthony Bourdain. Most of the time this place has so much business that the line is organized like the lines at Disneyland. You wait your turn while confined by cordons of rope and silver posts.

The Puka Dog Menu

We avoided the lines by eating lunch there twice at 10 a.m. It gave the bored employees something to do while they awaited the hordes. You choose your dog (besides a real hot dog you can opt for a polish dog or if you are from California a vegan dog), the relish you would like (choosing from such exotics as mango, banana and other ridiculous relishes) and whether you would like their special mustard and/or plain ketchup.

The hot dog is long and plump and is dropped into a bun which looks like a small loaf of bread with a long deep hole that traverses its length. The condiments are dropped down the same hole. It’s a big meal. The Puka Dog staff seemed insulted when I asked for just ketchup on my dog. One person I know refers to the Puka Dog as the “Cylinder of Death”. I rounded out my meal with a lemonade and a bag of Maui Chips. Why they don’t serve Kauai chips remains a mystery.

I did have time on Kauai to think about healthcare, especially after I consumed my second cylinder of death. I like to visit urgent care centers when I travel to get a feel for them. As I have indicated previously, I have reservations about their utility. I did scope one out twice during my Kauai stay. It was located in a small but upscale shopping center. Upscale shopping centers in the Hawaiian islands are defined as having a Tommy Bahama store.

The Kauai urgent care center seemed devoid of patients both times I took a look. There was not even a chicken in the waiting room. Perhaps they get busy later in the day after tourists have had their Puka Dog.

I did try to keep up to date on healthcare matters on the mainland by reading several recent issues of Modern Healthcare I took with me. I noted with interest that CommonSpirit Health would be having only one CEO with the retirement of one of its Co-CEOs after just one year of this dual arrangement. I had predicted this outcome in an entry on this site. These arrangements come about because the boards of merged organizations don’t like to make hard decisions.

I also noted that Modern Healthcare said that CommonSpirit Health had a $227 million operating loss in its first year. Outside financial analysts are beginning to get concerned. As I have also noted previously, big is not always better. In fact, it often makes performance improvements of all kinds more difficult. There is no virtue in being ponderous.

A final comment—-another recent issue of Modern Healthcare I read on the chicken island had this headline: “As competition heats up, hospital outpatient visits see first dip in 35 years”. The headline was a little misleading as the “dip” was in emergency visits. Otherwise, hospitals saw an increase in outpatient net revenue of 4.5% which was more than twice the 2.1% increase in inpatient net revenue. The hospital haters don’t get it——hospitals are more than holding their own against so called disrupters in healthcare.

It is nice to be back on the mainland where chickens know their place.


Unholy Alliance Part 2

If there has been one thing I have been consistent about both during the thirty-five years I was a healthcare system CEO and continuing on to my tenure now on the beach, it has been my view that the information collected during the patient care process belongs to the patient and no one else. As a provider of care we maintain custody of that information but it is not ours to give away or sell.

That was the focus of a blog I published in November (Unholy Alliance) which discussed the arrangement which Ascension Health had with Google to share patient data (“Project Nightingale”). The Wall Street Journal ran an article exposing this arrangement and raised questions about it appropriateness, particularly since it was a secret endeavor done without patients’ knowledge.

The Wall Street Journal in a more recent article again explored this subject. WSJ related how some prominent healthcare organizations like Intermountain Health and the Mayo Clinic were considering or have struck deals to provide patient data, some of which might with a little effort allow individual patients to be identify. Kaiser apparently also did some consideration of a similar data sharing arrangement.

It is not just healthcare providers who see patient data as a desirable asset. Health plans think such information belongs to them to use as they see fit. There are no uniform safeguards to protect patient confidentiality.

Its gets more dismaying. Cerner, a major provider of electronic medical records to providers, seems to think that the information which flows through its servers is its data to use or exploit as it deems appropriate. Apparently they had second and third thoughts about such data monetization and decided–for now–not to allow access to their data trove to outside organizations. Cerner would better serve its clients by providing a more efficient and less expensive suite of software. That would be a major achievement to crow about.

Google and Amazon seem to be the most active in attempting to entice healthcare providers to allow them to aggregate such data and in the process provide addtional revenue to the providers. The sale of this patient data is always couched in language which suggest that the common good will be enhanced. Disease processes will be better defined and the efficacy of treatment modalities better understood. I have no doubt that is true but do not believe Google, Amazon or any of the nerd herd are trustworthy recipients of this data. Nothing in their past history is a confidence builder in this regard.

Google, whose self proclaimed mission is “to organize the world’s information and make it universally accessible and useful”, has a dismaying tendency to take action and then beg for forgiveness later. I get the impression sometimes that they would like to be the “University of Google” with the prestige that would give them. If so, hopefully they will have a football team which will be smart enough to keep their helmets on at all times.

All of this is beside the point if you accept the thesis that your personal health record belongs to you and no one else. It is not for sale to others. We in healthcare forfeit our patients’ trust if we enter into such arrangements with the likes of Google or Amazon or Apple or Microsoft—make your own list. Healthcare organizations need to be more forthright about this matter and assure those it serves that their data will not be sold to others.

This is an area which continues to attract the attention of politicians which can be a mixed blessing. Bottom line though is that my healthcare record is my business and it is not for sale without my permission. Take my information off the market.

Dinosaurs Can Evolve

Amazon, the slayer of dinosaurs like WalMart and Target, is suddenly finding that the dinosaurs are biting back and it hurts. That was the subject of several articles in the business press at the end of 2019. I believe this revival of the erstwhile retail dinosaurs has some parallels to healthcare.

Until recently, Amazon has been a devastating competitor in the retail space. Online ordering and the absence of costly stores has allowed Amazon to grow very quickly. Free or low cost delivery made purchasing from Amazon even more attractive. WalMart and Target with their many stores found competing against Amazon difficult. A new paradigm was rising.

That is until WalMart and Target took a look at their business and how Amazon was leveraging online ordering to their disadvantage. Amazon, they realized, did its order fulfilment from massive warehouses located around the country. Could that seemingly insurmountable strength be a weakness?

WalMart in particular and Target to a lesser extent began online order fulfilment using the inventory in their thousands of stores. If necessary, orders could be shipped from the store or, even better from a cost viewpoint, customers could pick up their online purchases at local stores. This past holiday season, both WalMart and Target made it very easy to do such pickups. These dinosaurs had in effect mini-warehouses much closer to the customer than did Amazon. The dinosaurs suddenly became more formidable.

Amazon is now beginning to open stores to assert its presence. I frequently visit a bookstore they have in Walnut Creek, CA. I also visit another Amazon store in Berkeley which only stocks the best selling items in a number of categories. Amazon also owns Whole Earth Food stores (better know as “Whole Paycheck” due to their high prices and air of genteel nonsense— they make you feel good as they shamelessly pick your pocket). Amazon is looking more and more like the dinosaurs it thought it had replaced.

So what is the parallel with healthcare? For years the mantra has been that hospitals are dying. The first book on that subject that I can recall dates to the early 1980s. The author of that book is now a senior citizen pundit who no longer necessarily believes in the death of hospitals. The thesis underlying the hospital death notices was that technology would reduce the need for hospitals and services would be provided in less costly outpatient locations. Outpatient locations with their lower cost were to be the Amazons of that healthcare era.

Except, all the hospital doomsayers were wrong. First of all, technological advances also led to increased use of hospitals for some diseases. More to the point, like Walmart and Target, hospitals did not roll over and bow to the pundits’ outpatient gods. Hospitals big and small morphed into healthcare systems. In many locations, hospitals are the central focus of a campus and are surrounded on their sites or nearby by various outpatient centers they own.

Hospitals are like WalMart Super Centers. Easy to find with all that a customer (or patient) may need. That convenience plays a huge role in allowing hospitals to adapt to changing circumstances. Hospitals did not die. They evolved and in the process made care more accessible.

This reality is hard for many to accept. There are entrepreneurs still trying to form urgent care companies and imaging center companies. The economics work fine as long as they can find venture capital companies dumb enough to fund them. The dumb guys do exist. The fact is, though, that none of these companies have amounted to much or moved the needle in terms of healthcare cost.

Hospitals in their new form, like WalMart and Target in retail, have become effective competitors with self-proclaimed disrupters. The lesson here is to never underestimate the ability of dinosaurs to evolve.