Beware The Hopper

I apparently did everything wrong as I pursued a career in healthcare. That is the conclusion I must come to after reading–actually listening to—an excellent new book with the intriguing title of “When-The Scientific Secrets of Perfect Timing” by Daniel H. Pink.

According to the book which asserts that timing plays a big part in outcomes, research shows that ambitious people should change their employer every three to five years to maximize their chances for success, however that may be defined. Given that criteria, I failed as I had only two employers in a career of forty-five years–one for 10 years and one for thirty-five years. I feel totally inadequate.

I took this failure one step further. I was always suspicious of candidates for positions on my senior management team who did job hop frequently. If they did it to someone else, they would do it to me.

The few times I did hire someone with such a job history, sure as heck, they left after less than five years. In their minds that must have been good for their careers but it was not good for the organization as far as my retro mind was concerned.

Most of my senior managers hung around for at least ten years. I knew it was important that they have challenges which went beyond their job descriptions to keep them engaged and growing. So strategic planning was a group effort of all senior managers who each had their unique insights to bring to the process. We always used different planning processes to keep all of us interested, including me. Staying and growing in place does not necessarily mean stagnation.

We also later in my tenure developed with the help of outside consultants and inside experts a robust career development and succession planning process for all managers, including senior managers. Just developing that process as well as the ongoing management of it was of particular interest to some of the senior managers.

I also tried to convince senior managers when the opportunity arose to take on new responsibilities which did not necessarily fit within their comfort zones. The kind of senior managers I had for the most part readily accepted that challenge.

Sometimes, though, it was clear that for a senior manager to progress in their career they did need exposure to a different organization. One such senior manager was in a highly specialized job area and he came to me one day after ten years of tenure to tell me he was leaving to become CEO of a small healthcare support business completely out of his area of comfort. He felt he needed to break his mold.

We kept in contact as he spent seven years in that CEO position and then moved back into a hospital as a VP over a variety of services. After three years in that position, a great opportunity became available on my senior management team so I asked him if he would like to come home which he did. He was happy as a VP in that other organization but the lure of coming back was too strong. In his case, this was not job hopping but a thoughtful career development plan.

I believe that it takes more than three to five years to beome effective in a senior management position and that organizations and managers suffer when job hopping occurs. As the book’s title indicates, “When” is important but how long is equally significant.

One final comment about “When”. Late in the book, the author speaks to the power of endings. He offered several examples of endings done right. One was a restaurant which whenever someone spent a certain amount of money gave that customer a card listing three charities. The customer was asked to pick one of the charities so that the restaurant could makes a donation in his name as a mark of appreciation for his patronage.

If you are going to be a job hopper every three to five years, it may be a good idea to keep your endings in mind. Perhaps, a personal note to each of your colleagues thanking them for helping you or a Starbuck’s gift card—anything that indicates your appreciation. Completing that circle is important, particularly for job hoppers.

Baseball, Healthcare and Scads

Last week I was at a retirement ceremony for yet another of the senior managers I worked with before I hit the beach. This person wore many hats and was superb. She was particularly good at strategic planning and the anticipation of trends to help guide the future of NorthBay Healthcare. As far as I am concerned, she was the epitome of out-of-the-box thinking. After thirty-two years of such guidance at NorthBay, she left the organization with grace and great appreciation from those of us who had worked with her.

At the retirement ceremony I discussed with her top assistant in planning, also a long-time staff member, the tremendous amount of data which is now available courtesy of the deservedly maligned electronic health records providers now use. These creations have made the medical record the focus of patient care rather than the patient herself. Work flows have had to bend to accommodate the needs of the record monster.

One huge problem—while the electronic health record is capable of collecting scads (“scads” is a highly technical term meaning “a lot”) of data, it is not very good at regurgitating the information in a useful fashion. That, in turn, has led to the creation of a legion of consultants who for a handsome fee will try to make sense of the information flood. Think of the electronic health record as a shark circling the patient and the data gurus as the pilot fish feeding off the parasites on the shark. Everyone benefits except those whom the sharks are feeding on–the patient, the hospital and the doctor.

I know that seems a harsh judgment, but it was the reality I saw and which was reconfirmed this week when I spoke to the planning assistant. The billions of dollars which providers were incentivized to spend for electronic health records have resulted in much information with no place to go. The electronic health record vendors have gotten rich by selling a product which is a dead end.

It may be that we are asking and expecting too much of the electronic health record at least in its current form. More information can be overwhelming and that could in itself lead to errors.

Baseball teams now use analytics to develop game plans and govern decision making during the course of a game. Some of these baseball geeks can even be found in the dugout during games dodging tobacco spittle from the grizzled manager. However, the data points they use are relatively small in number and are based upon using past tendencies to project future outcomes. Even then, when you get down to the real nitty-gritty (another highly technical term), the team with the best players wins. What comes first, good data or good players and what is more important?

As I pondered this in a disorganized fashion at the retirement ceremony, I thought back to the many decisions this planning vice president and I made over the years and how often we made good decisions with only a little data available to us. Her creativity was just as important as data and led us to do things which the data either was silent on or indicated we should not do. Maybe we had bad data or perhaps intuition and vision still have a role to play in guiding an organization’s future. That vision thing can be very useful.

Like in baseball, data can be useful. Also like in baseball, the healthcare system with the best players wins most often in spite of what the data indicates. That senior manager who retired last week proved that.

What A Deal!

There are weeks when I spend most of my time on the beach (my way of saying being retired) being a grandfather. The past week was one such week.

Instead of thinking deep thoughts about our purportedly wayward healthcare situation and putting the resultant thoughts into writing, I spent more time than usual with my grandchildren.  In many ways, that time spent is more satisfying than the years I spent as a healthcare system CEO.

Still, a few things caught my eye that are worthy of comment.  Kaiser Permanente, whose top management specializes in virtue seeking while spending other people’s money, received criticism this week for sponsoring “Thrive City” at the new home of the Golden State Warriors opening this September in San Francisco. I commented about this two weeks ago in “How Not To Spend Money”.  Normally, when Kaiser does these kinds of things, they escape criticism.  Not this time. About time someone in journalism woke up.

On Sunday the San Francisco Chronicle ran an article based upon some research they did on the amount of money Kaiser was committing to this virtuous project.  Kaiser had been steadfastly ignoring requests for the dollar amount.  According to the Chronicle, it may amount to as much as $295 million over a twenty-year period.  That’s a lot of virtue devoted to a fabulously rich basketball team by a nonprofit health plan. I want some.  Any.

Earlier this year, Kaiser committed to another virtuous project to the tune of $200 million to help with the homeless problem in areas where they have facilities.  The homeless problem is real but is this commitment of resources what the purchasers of Kaiser health insurance want to pay for?  I doubt it.

Keeping on the Kaiser theme, the June 17 issue of “Modern Healthcare” contained a brief item regarding Kaiser’s displeasure with a healthcare system in Honolulu which was planning to bill directly Kaiser patients who used its emergency service now that its contract with Kaiser has expired. The nerve!

The thrivers at Kaiser were upset because, well, just because. Kaiser wants to pay the healthcare system what Kaiser considers an “usual and customary rate” for its members and does not want its members directly billed.  Put another way, Kaiser wants to determine what it should pay when another healthcare system helps it thrive.  Kind of like going into a grocery store and telling them what price you will pay for a loaf of bread.

Sound familiar?  I wrote about a similar situation in California in “Chumps” in February.  I related how NorthBay Healthcare had won a legal judgement against Blue Shield in a similar situation and how NorthBay and other providers in California were proceeding in similar fashion against Kaiser.  Everyone deserves to thrive.

So, let’s sum up the situation. So far this year Kaiser has committed almost half a billion dollars for virtuous actions unrelated to the direct provision of healthcare, sticking that bill to the public and private employers who buy health insurance from them.  At the same time, they expect other providers to subsidize these wonderful endeavors by gratefully accepting what Kaiser wishes to pay for services provided to their members.

What a deal!  This is why being a grandfather makes more sense sometimes than being in healthcare.

P.S.:  The thrivers also announced last week plans to build a new $900 million headquarters in Oakland.  It’s good to be the king or at least a virtuous thriver. That makes almost $1.5 billion dollars in non-healthcare  spending so far this year.  Hope those paying health insurance premiums take note.

What Gives?

“Get your facts first, then you can distort them as you please.”

Mark Twain

I was listening to a travel podcast recently about President Trump’s decision to immediately stop visits to Cuba by Americans. The podcast hosts were very upset and one said that the immediate impact would be on 800,000 passengers who had booked a cruise which included Cuba as part of the itinerary. That caught my notice.

I am not interested in the politics of the decision. I am interested in the cavalier use of statistics to make a point. There is no way that 800,000 cruise ship passengers will be affected by this decision. Given the number of ships calling on Cuba this year and their size, that is a dubious number.

We see this same careless use of statistics in healthcare where the stakes for being wrong far outweighs that of a disappointed passenger. Careless use of statistics means resources may be wrongly deployed to everyone’s detriment.

For instance, take the Institute of Medicine’s 1999 report, “To Err Is Human”. The report was a shocker with its estimate that between 44,000 and 98,000 people a year died in hospitals as the result of medical errors. Even one such death is one too many.

That report resulted in a great deal of concern as it should have. Hospitals and medical professionals made changes in care including things as simple as being more diligent about hand washing between caring for patients. That effort continued as incentives both positive and negative were created by the government and others. No one I knew in healthcare was happy about the idea of patients needlessly suffering or dying.

Fast forward now fourteen years to 2013 when the Journal of Patient Safety published an article estimating that there were between 210,000 and 440,000 hospital deaths due to medical errors. All the efforts to decrease the number of preventable deaths noted by the Institute of Medicine in 1999 seemed to have had no impact at all. It was discouraging. There was a question which should have been asked: What gives?

Two years later in 2015 the Leap Frog organization, which attempts to give hospitals letter grades for quality using a problematic methodology, estimated that there were 205,000 preventable deaths in hospitals. That was followed three years later by another estimate by Leap Frog of 160,000 preventable deaths. Again, I have to ask the question, what gives?

The common thread to all these statistics is this word: “estimate”. That is a word which needs clarification by the people issuing these reports. The words “estimate” and “estimated” could simply be another way of saying we don’t know.

Estimates are not facts; they are guesses. In baseball, no one says that Buster Posey’s batting average is estimated as being .294. Should we not expect a more rigorous committment to facts and statistics in healthcare when dealing with important matters?

When you have a range from 44,000 to 440,000 deaths, you have a lack of preciseness which is troubling. Furthermore, when the estimates increase significantly after a decade of process improvements directed at reducing such deaths, you have to wonder whether the report issuers have their own error problems. Or maybe they are just lousy estimators.

I certainly knew during my career as a healthcare system CEO and a board member of a risk retention company providing professional liability insurance of medical errors which led to needless suffering and/or deaths. There is no defense for any such occurrence and every and all effort should be made to eliminate the errors. There were too many such errors.

We have a problem but we do not know exactly how big a problem it is. We need more than just estimates if we are going to be able to measure how effective we are in reducing preventable deaths to zero. Of equal concern is we don’t know how many faulty “estimates” are being used in other areas of healthcare to drive decision making in important areas. Perhaps there is a need for a report on “To Estimate Is Human”.

How Not To Spend Money

Now that I have been on the beach for over two years I find myself beginning to question certain practices by healthcare providers.  Things that made sense to me when I was in an office rather than on the beach no longer make sense.

For instance, for some reason I have been attending University of California football games in Berkeley for over 50 years.  It is certainly not for the thrill of victory which seldom occurs.  In a sorry commentary, Cal fans were ecstatic last season when we won just enough games to be invited to the “Cheez-It Bowl”.  The Rose Bowl for Cal fans is the impossible dream.

Cal football games in recent years have been a further source of aggravation since Sutter Health, a competitor to NorthBay Healthcare, is an official sponsor of the football program and their logo is plastered around the stadium.  Losing football games is apparently not aggravation enough.

Sutter Health is also the official sponsor of the Oakland As baseball team which makes me happy that I am a lifelong San Francisco Giants fan.  Of course, Dignity Health is the “official health care provider” of the San Francisco Giants so if these two teams ever again compete against each other in the World Series, not likely this year, it will be Sutter versus Dignity.    May the best healthcare system win.

Recently announced deals have  moved beyond just plastering logos around stadiums. Whole geographic areas are being given new names.  Kaiser has struck a multi-year, multi-million dollar deal with the Golden State Warriors to name an 11 acre area around their new Chase Center Arena in San Francisco “Thrive City”.  I suspect the deprived homeless in the neighborhood will not be welcomed to pitch their tents in that swanky area.

Similarly, Dignity Health has struck a deal with the Los Angeles Galaxy soccer team to name their stadium “Dignity Health Sports Park”.  Now that Dignity has merged with Catholic Health Initiatives to form CommonSpirit Health, will they change the stadium’s name?  Hopefully, the team will play with a degree of dignity and commonspirit and there will be no flopping on the field at the first sign of contact. Many soccer players act more like gymnasts than “footballers”.

All these activities are usually deemed “community benefits” which is an obligation nonprofit organizations have to justify their tax exempt status.  The large system CEOs prattle on about how spending this money aids the community, not to mention the sport teams owned by fabulously rich individuals.  That’s hogwash.  They just want to make sure they have good seats at the games.

Nonprofit healthcare organizations should not be adding to the bottom lines of well off sports teams and they certainly should not be pretending anyone else benefits from their largess other than the sport moguls. Shame on them.

It is not just the big guys who get involved in these expensive deals.  Many smaller healthcare organizations sponsor events or other activities which are at best tangentially related to their missions.  The cost of these deals are proportionately less but still significant.

Viewing these activities from the beach I have to wonder whether the money could be better spent.  Should  sick people really have to bear the expense of these vanity activities?  Could the money be better spent on free vaccination clinics or free sport examinations for high school athletes?

I can hear the protests from the healthcare organizations which inappropriately devote their resources to non-healthcare uses. It is a branding effort they will say as if the fans really care. No, it is just a fun way to waste other people’s (patients) money.

I have no problem with advertising to the public about the services a healthcare organization has to offer.  I consider that a legitimate expense and a worthwhile endeavor. Similarly, any effort by healthcare providers to educate the public about healthcare concerns through publications, health fairs and the like should be encouraged. There is a benefit to that.

Spending millions of dollars over multiple years on what are essentially corporate vanity efforts is not defensible.   The next time you hear about layoffs by a healthcare system or the closing of a service or the increase in health plan insurance premiums, ask yourself if perhaps Thrive City should close instead.

From where I sit on the beach, healthcare providers lose credibility when they spend money this way.

Lawful Prey

When my father passed away in January, my siblings and I had to make the necessary arrangements for his funeral.  We turned to a trusted funeral director and began making decisions.

What casket should we select?  We saw a variety of caskets with prices attached.  We were not experts on “value” with regard to caskets and the prices were almost meaningless to us in a time of emotional turmoil.  We ended up selecting one similar to what we had chosen for our mother nine years previously.

We then had to choose from an array of other services, each with a price attached.  We did our best but we were not in a position to “shop” each item to see if we could get a better price.  In the end it was trust in the funeral director which guided our decisions.

I thought about trust and prices this week when President Trump announced an effort to make healthcare prices more “transparent’.  He was joined by both Democrats and Republicans in favor of such an effort.

It is all political sleight of hand.  For the purpose of this entry I am going to narrow the focus to hospital pricing, something I know a bit about.

At least in California, hospital prices are readily available at .  As the site explains:

“A hospital charge description master, also known as a chargemaster or CDM, contains the prices of all services, goods, and procedures for which a separate charge exists. It is used to generate a patient’s bill. As required by the Payers’ Bill of Rights, each hospital is required to submit a copy of its chargemaster, a list of average charges for 25 common outpatient procedures, and the estimated percentage change in gross revenue due to price changes each July 1.”

There are thousands and thousands of individual hospital prices in each chargemaster.  You cannot get more transparent than that.   Hospitals are required to maintain such detailed lists of prices by Medicare even though Medicare does not pay hospitals on the basis of its prices.

Medicare is a price fixer.  If you need to take care of Medicare patients, you have to accept their reimbursement which is driven by the vagaries of the federal budget.  The same is true for Medicaid (MediCal in my state).

The shortfalls from the poor reimbursement by these government programs results in cost shifting, i.e., charging patients with private insurance or no insurance more than would otherwise be necessary.  Here is a rule of thumb–the greater the number of Medicare and Medicaid patients served by a hospital, the higher will be its prices.

Selecting a provider though is more than just a matter of pricing.  If we have insurance or Medicare or Medicaid, we are for the most part unconcerned about prices. There are pundits who say that for  price transparency to work patients need to bear more of the cost of care they receive.  While I think that is true, it is not a viable position politically.

From my experience as a patient and as a healthcare manager now retired, trust in my physician’s judgement and in the hospitals where I have had a good experience has always been more important than pricing.  I don’t want the cheapest surgeon or hospital; I want the surgeon and hospital I have reason to trust.  That is what the worthies in Washington and Sacramento don’t understand.

So big deal.  We have transparency, at least in California, for hospital prices.  There is no indication that access to that information makes a significant difference in patient decision making.  Until patients have much more skin in the game, which is unlikely, that will remain the situation.

What is going on now is pure political posturing by both parties.  Here is a bit of advice I give to the poseurs in D.C. and Sacramento.  For all the years I was active in healthcare I had a quotation hanging in my office by John Ruskin, a 19th century critic and, ironically, a socialist.  It was the first sentence of the first paragraph of Ruskin’s “The Common Law of Business Balance” which follows:

“There is hardly anything in the world that someone cannot make a little worse and sell a little cheaper, and the people who consider price alone are that person’s lawful prey. It’s unwise to pay too much, but it’s worse to pay too little. When you pay too much, you lose a little money — that is all. When you pay too little, you sometimes lose everything, because the thing you bought was incapable of doing the thing it was bought to do. The common law of business balance prohibits paying a little and getting a lot — it can’t be done. If you deal with the lowest bidder, it is well to add something for the risk you run, and if you do that you will have enough to pay for something better.”

I hope people keep this “law” in mind as healthcare undergoes a necessary review of costs and benefits. What would be real “price transparency” would be to show side by side with real prices what Medicare pays for the same service. Then citizens would see the hidden healthcare taxes they are paying as the lawful prey of political hawks.


A New Song

Modern Healthcare in its May 13 issue contained yet another article about what makes an organization a “health system”.  It looked at what is now a decades long process of local hospitals being swallowed up by larger hospital chains, both nonprofit and for profit, to form much larger “systems”.

The article said that one pundit feels that “to qualify as a system, the organization must actively managed the cost of care by minimizing waste and eliminating avoidable clinical complications.”  It is the McDonald’s approach—-minimize costs and produce a consistent degree of quality.  Whether forming large hospital chains accomplishes that is debatable.

There is no question that when hospitals merge the excuse is always it will result in better care provided more cheaply.  After all, who would propose decreased quality at a higher cost?   Most of the time, though, what you are looking at is simple empire building and great opportunities for hungry consultants who feast on these arrangements.

There is a coterie of pundits who for the past twenty years have been making the case for big is better even though many of the bigs continue to struggle. The song has not changed nor have the singers. Time perhaps for a new song and new singers.

The May 15 issue of that prestigious medical journal, USA Today, contained an article about  the grades assigned by one pundit-laden organization to hospitals based upon care outcomes.  The methodology used by this organization is always a little shaky but I thought one finding was interesting.  Using the familiar A-F grading scale many of us endured before participation awards took their place, there were eight hospitals in the greater San Francisco Bay Area who earned a “D”.

A closer look at those eight  hospitals showed that five were part of large multi-hospital chains.  The other three hospitals were county hospitals.  There are in the Bay Area several relatively small and excellent healthcare systems which serve very limited geographic areas.  They had better grades than the large guys.  Nothing scientific about that finding but still kind of interesting.

My thesis for many years has been that locally based and focused healthcare organizations do a better job of meeting community health needs than the big guys and have a better chance at prospering even in a rapidly changing economic environment.

When you are subject to corporate offices with corporate  rather than local goals, you cannot do what needs to be done to best serve the community.  Maybe adopting the McDonald’s approach makes sense to central planners who don’t have to burden themselves with local conditions but it is detrimental to effective healthcare.

Furthermore, these big chains become burden by overgrown bureaucracies and absurd mission creep away from the core business of healthcare.  Their top managers become virtue seeking ambassadors of good will rather than focused managers.  The bigger the organization, the more this is so.

I had other comments on the fallacy of “bigness” in my “Big Blobs” entry here in January.

So what is the answer?  I believe that many of these larger healthcare organizations, particularly in the nonprofit sector, need to be unwound.  The fact that they even happened represents a failure of management and governance.  The lack of evidence to justify these increasingly complicated and odd-looking organizations speaks to that.

You can get quality care at a reasonable price but it needs to be a bottom-up, not top down approach.  The smaller and more locally based the healthcare system, the more likely this is to happen.

Small is better. That should be the new song.


Continue reading “A New Song”