Latest / Becker’s Healthcare Podcast / David Dunkle, CEO, Johnson Memorial Health

Transcript

David Dunkle, CEO, Johnson Memorial Health · Becker’s Healthcare Podcast

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• 0:31
  Hello, and welcome to the Becker's Healthcare podcast.
• 0:35
  My name is Will Riley.
• 0:37
  I'm joined today on the podcast by David
• 0:40
  Dunkel. David is CEO of Johnson Memorial Health.
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  Welcome to the podcast, David. Hey, Will. Thanks
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  for having me. It's great to be talking
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  to you again. So, David, start off. Tell
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  us a little bit about yourself.
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  Tell us about, Johnson Memorial and, what's going
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  on. Yeah. So a little bit about myself.
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  So I started out health care as a
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  family physician,
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  practiced for eighteen years. I actually went to
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  college in the town where my work now,
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  where my hospital is. I'm kind of lifer,
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  stuck around, so I practiced for about eighteen
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  years. Was involved in different medical staff,
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  positions, chief of staff a couple times, and
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  moved into vice president medical affairs. In 2019,
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  became CEO of the organization. So really in
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  really enjoy it.
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  Love the community. We're in a growing suburb
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  just South of Indianapolis. But Johnson Memorial Health,
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  it's a one hospital system, about 900 employees,
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  about a $120,000,000
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  in net patient revenue.
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  But, really, we we really stress quality and
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  safety. Again, we really look at that strategically
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  as a differentiator. And when you when you're
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  counting a hospital, you fight that, is it
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  a Band Aid station moniker? And you always
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  worry about that. So we we always said
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  we're never going to skimp on safety and
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  quality, and it shows. We're CMS five star
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  organization.
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  Though though it's embargoed, we're very happy with
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  our LeapFrog score that'll be publicized very shortly.
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  So, again, just a great organization. We always
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  put you know, we say everything we do
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  is put the patient first. We mean it
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  because when you're a community hospital, that's what
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  you have to do. And patients have to
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  know that when they
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  come to your hospital, they're getting as good
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  a care as anywhere else in the state.
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  Yeah. Okay. Tell us a little bit about
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  that community. Is it urban, suburban, rural, and
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  what's the kind of payer mix? So it's,
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  you know, it it's a mix because we're
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  just South Minneapolis, so it's suburban away, but
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  it's also if you go a little more
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  south and from our location, it gets pretty
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  rural. And you do have people that, you
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  know, I still remember as a family doctor,
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  you know, someone saying, yeah. I come in
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  to go to the mall one time a
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  year and get my physical. Yeah. So, I
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  mean, you know, that that that's the kind
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  of thing. But, unfortunately, our payer mix is
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  not advantageous at all.
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  It's
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  we are just it's a it's a mix
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  of
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  there's a lot of nursing facilities, large ones,
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  in in our community.
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  So, large Medicare mix, large Medicaid mix. Overall,
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  we have 70% governmental payer. Okay. So it
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  it that puts a lot of pressure on
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  on that I think, you know, when you
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  when I start conversation in the community, a
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  lot of people don't realize. In Indiana, medic
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  Indiana Medicaid, 57¢
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  on the dollar total cost of care. And
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  I think nationally, we know Medicare is about
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  82¢ on the dollar. So it's hard for
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  people to understand, but 70% of our business,
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  we're losing money. You know? And, you know,
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  and that puts more pressure on that 30%
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  of the commercial payers. And, you know, and
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  it's kind of you know, you call them
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  payers, but they don't pay. So that that's
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  that puts a lot of more pressure on
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  community hospitals like ours. And, again, like lots
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  of hospitals, we wanna stay independent, but it
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  gets harder and harder every year to really
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  when you look at the landscape of what's
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  happening and you look nationally at how many
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  rural hospitals are closing, and it's disappointing because,
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  you know, that's the lifeblood of a lot
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  of communities. Not only are you know, the
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  rural hospitals tend to be the largest employer
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  in the county, but, again, that's where those
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  people go for care. And you wonder as
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  you see these hospital closures, are people gonna
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  travel to a medical center that's thirty five,
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  forty, fifty minutes away? How long are they
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  gonna put off their chronic condition before they
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  have a much worse,
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  health outcome? And, again, that that as a
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  family physician, especially, you know, obviously, I don't
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  see patients who aren't administered. You never stop
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  being a physician. You never stop caring about
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  patients. Yeah. Right. And I can imagine then
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  the current legislative agenda has some concerns for
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  you.
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  Yeah. It's it's rough. You know? Understatement. But
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  Yeah. I mean, especially, we're just continuously being
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  asked to do more with less. Uh-huh. And
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  we're already seeing our charity care already going
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  up. Indiana, like many states, is is you
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  know, they've tightened the Medicaid enrollment.
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  We have more people come to our ERs
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  that that,
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  do not have insurance, so we try everything
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  we can to obviously get them signed up.
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  You know, that is. That's a strain in
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  the organization. Then what happens again is people
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  put off the care that they need until
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  now
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  they have a worse health outcome. Now they're
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  being admitted because they're in kidney failure or,
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  you know, they have a a bad pneumonia
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  when, yeah, they could've been treated with antibiotics,
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  you know, a couple weeks earlier. So it
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  puts a strain on the system. We're definitely
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  seeing that, though we, you know, we work
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  hard. We work hard to get people signed
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  up who are eligible for Medicaid. We get
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  you know, we try to get people benefits.
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  We obviously work with payment plans, that type
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  of thing because Yeah. Again, we wanna we
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  wanna we wanna provide care to everyone. Yeah.
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  Yeah. Okay.
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  So that's the environment. And then,
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  one of the narratives we've been exploring on
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  the podcast over the the the last few
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  days here has been, around the rise of
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  technology and the rise of artificial intelligence.
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  And and talking about that as a a
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  new wave of technology
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  where health care has been pretty conservative
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  about investing in technology in the past, but,
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  actually, that seems to be a little flipped
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  when it comes to artificial intelligence.
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  And people are really enthusiastically
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  adopting it in clinical and administrative workflows.
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  So before we get into, like, the practicalities
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  of it for you,
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  do you agree with that? Is are you
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  seeing that too? Is there, like, real enthusiasm
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  for this technology in a way you haven't
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  seen before? Yeah. Definitely. And then and the
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  thing is too because, you know, with the
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  AI or some other, you know, technology,
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  you're actually looking at long term cost savings.
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  You know? And, again, there's always that upfront
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  cost, which for organizations like ours that have
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  very thin margins, if margins at all, you
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  always have to worry about it. But when
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  you have the opportunity, you know, you look
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  at, like, rev cycle and fighting denials, that
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  kind of stuff. Well, AI works twenty four
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  seven. It works on weekends. It doesn't take
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  vacation. It doesn't get sick. And so long
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  term, that can pay off. And, again, you
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  you're taking human error out of it. So,
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  you know, that's really where there there is
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  a lot of potential ROI. And, again, so
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  you had but for us, it's like it's
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  like deploying any type of, you know, capital.
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  It's does is there ROI? Is it what's
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  implementation?
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  How long does it take? How long until
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  until you see the benefits?
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  Everyone because when you talk about things like
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  ambient listening technology, I mean, everyone sees those
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  you know? Again,
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  physicians love it. You know? And you talk
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  about decrease in pajama time, that kind of
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  stuff. But, again, that has a cost. And,
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  again, I still joke and, you know, I'm
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  old school family doc who you see 35,
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  40 people every day with the dictaphone. Right?
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  You dictate you know, you put in a
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  couple batteries, and guess what? You know, the
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  next day, amazingly, your notes are on your
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  chart at, you know, $9 an hour. And
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  you know what? You don't have to worry
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  about any cyber attack happening into your dictaphone.
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  So that was because, again, you know, that's,
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  you know, that's a big cost to cybersecurity,
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  that type of thing. But but AI and
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  for patients, they don't realize too when you
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  go and you get and you're having a
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  hip replacement, and AI has been utilized to
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  make that perfect cut. So the surgeon makes
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  a perfect cut to navigate, you know, the
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  best approach, and that's and we're seeing great
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  clinical outcomes. So I think the growth of
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  AI, the sky's the limit, and it is.
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  And I'm enthused about it because I do
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  again, I think it will ultimately result in,
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  one, better patient care, but, two, hopefully, better
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  reimbursement for organizations
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  who utilize it correctly.
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  But how do you think about
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  making those investments? Because you've you've painted a
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  picture that's quite difficult, right, from an operating
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  perspective. Like you said, all this stuff costs
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  money. Yeah. So how do you decide how
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  to allocate that those resources? Well, it's difficult.
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  And I think for organizations like us, it's
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  really finding partners who you trust. You know?
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  And, again, when you're a smaller organization like
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  us, you're never gonna be the first to
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  adopt the latest technology. Because, again, a lot
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  of that is just affordability. We can't afford
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  to make a mistake. We can't afford to
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  make an investment that doesn't pay off because
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  capital is so limited. You know, I joke
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  because I've been at conferences, and I've heard,
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  you know, CEOs of big organizations say, boy,
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  I could just make a list of all
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  the big mistakes I've made and, you know,
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  where I've deployed capital in the wrong areas.
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  I can't do that. You know, I joke
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  with my executive team, like, every you know,
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  it's it's a lot of pressure when every
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  hit has to be a home run. And
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  so I think it's you know, really, you
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  have to trust your partners and trust that
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  things have been properly vetted, and then you
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  do look at things. Yeah. And, again, you
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  have to talk to your stakeholders. Who's it
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  affect? Is it affecting your rev cycle team?
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  Well, let's talk to the CFO, rev cycle
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  director. Let's talk to those frontline people, and
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  you gotta get them enthused about it. You
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  know, that's the the biggest problem you've seen
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  in other organizations is when they roll things
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  out too quickly or you don't explain it.
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  Again, as a family physician,
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  you know, you always explain things so people
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  know they get they get, you know, they
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  get on board of what the treatment plan
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  is. It's the same with AI. I think,
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  you know, education
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  is is is is top of the top
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  of mind for all of all that. Yeah.
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  Okay. You've talked about the payer environment a
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  couple of times, talked about the promise of
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  some of this technology in terms of revenue
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  cycle application.
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  You mentioned, I think, 30% of your payer
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  mix is commercial.
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  What so it sounds like the dynamic there
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  is is difficult. Can can you tell us
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  more about that? Yeah. It's very difficult. As
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  I said, we have so much pressure to
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  optimize, you know, our our our contracts with
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  payers. And, you know, and it's very disappointing
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  me, again, being a clinician. And we and
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  we had we had a CFO leave.
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  So in the interim process, I had to
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  get a lot more involved in the day
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  to day work with the revenue cycle director,
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  work with HIM, and really looking at some
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  of these denials that we were receiving. And
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  it's just egregious
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  when, you know, you have a inpatient stay,
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  and they ask the same
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  chart notes eight times on the same patient
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  and, you know, things like that. And, again,
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  you're talking about timely filing, slowing slowing things
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  down, and I I just don't understand
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  how we have to fight so hard to
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  get paid for the care that we've already
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  delivered. And a lot of people don't realize
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  some of the other practices, you know, now
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  we'll you'll you'll get a letter
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  from a payer that says, hey. You know
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  that hospitalization a year and a half ago
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  from missus Smith? Well, now we think we
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  overpaid you, and you owe us this amount.
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  Right. And you have thirty days to respond.
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  You know? It's it's just the
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  you you feel like you're getting bullied. Right.
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  And and that is really it's disheartening because
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  when you have thin margins and the payers
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  are allowed to do everything they can not
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  to pay you for the care that you've
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  already delivered. You've already paid the physician. You're
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  paying the nursing. You're paying for the equipment.
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  They've had you everything's paid for, and then
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  you just have to constantly try to get
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  paid
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  what you deserve, and that's difficult. And then
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  for a small organization like ours, I tell
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  people that I one of the problems with
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  medicine is, you know, again, we're a five
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  star CMS hospital, great leapfrog scores. If you
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  come to my hospital, I guarantee you, you
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  know, your risk of a fall,
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  catheter associated infection, a central line infection or
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  slim to none. And we haven't had a
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  cat I mean, I don't wanna jinx it,
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  but we haven't had a central line infection
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  in three years. Right. So you can come
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  to me and say
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  you need procedure x. You can go to
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  another hospital, big system hospital,
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  not far,
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  CMS, two star,
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  bad safety scores, same procedure, same everything. They
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  get x plus something. They're getting paid more.
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  When your environment as a patient, you're in
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  a less statistically less safe environment. How is
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  that right? Right. You know? And and that's
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  why there needs to be more parity. There
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  needs to be more parity. A gallbladder here,
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  you get paid this. A gallbladder there, you
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  get paid the same. And
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  but, unfortunately, I think without the only way
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  that will ever occur is legislatively.
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  You know? And it's we
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  hospital is being pushed
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  so much, and it's a monopoly. It's monopoly
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  behavior on the on the payers. I mean,
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  in Indiana, you look at the largest,
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  five hospital systems in the state. I think
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  they they control 49%
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  of all commercial beds. The four largest
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  payers control 97%
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  of commercial beds, so that's where the monopoly
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  is. And but they but I give the
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  payers credit. You know? They win they win
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  the public opinion
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  poll. Oh, hospital prices are crazy. Your health
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  insurance is so high because hospitals just they're
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  greedy.
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  Well, look who's making the money. You know?
• 12:25
  Look at the payers and and, again and
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  you have to break it down to they
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  have and where's the fiduciary responsibility? If you
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  if you are a leader and a payer,
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  your fiduciary responsible
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  responsibility is to maximize profit for your shareholders.
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  My responsibility is to take care of patients.
• 12:43
  That is misalignment. Yeah. And until there's more
• 12:45
  pressure
• 12:46
  for those things to be aligned, patient care
• 12:49
  to be at the forefront of everything we
• 12:50
  do,
• 12:51
  then you're gonna you see small hospital closures
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  all across the country. And that, again, just
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  makes me sick. Yeah. Do you think that
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  I mean, I wonder if how can technology
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  help with that? Because we've talked about automation
• 13:04
  of revenue cycle. Right? So, theoretically,
• 13:07
  it's now much easier to create a perfect
• 13:09
  claim than it ever has been.
• 13:12
  Right? And and get that process happening much
• 13:14
  faster than it's ever happened.
• 13:16
  Is that is is that a is that
• 13:18
  a promise?
• 13:19
  It it it's promising, but there's you can
• 13:21
  get a perfect claim. It doesn't mean the
• 13:23
  perfect claim is going to be reimbursed. That
• 13:25
  is the issue. You know? And, honestly, I
• 13:28
  think I think that payers should be fined
• 13:31
  if you have a perfect claim denied. And
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  I think that's where technology
• 13:35
  to your point, you have a perfect claim.
• 13:37
  It could be proved it's a perfect claim.
• 13:38
  The the payer knows it's a perfect claim,
• 13:40
  and they've denied it. They should be penalized
• 13:42
  just like we can get penalized or you'll
• 13:45
  get clawed back and that type of thing.
• 13:47
  So, yes, I think that's a great point.
• 13:49
  You know, that that'd be a great use
• 13:50
  of the technology. And the thing is we
• 13:52
  have the technology. We have the technology approved.
• 13:54
  It's a clean claim. But, you know, the
• 13:56
  other thing you always have to be aware
• 13:58
  of, payers change the rules all the time.
• 14:00
  Right? They post something on Mhmm. Their website
• 14:02
  where, oh, you know, we're not paying for
• 14:04
  readmissions anymore, just like CMS.
• 14:07
  Right? Just just a little posting so you
• 14:09
  you get you know, it they can make
• 14:11
  they can make decisions, you know, like in
• 14:13
  Indiana. You can make a decision that affects
• 14:15
  every hospital in the state, but I can't
• 14:17
  call my friend another hospital and say, hey.
• 14:18
  What are you getting reimbursed for a cholecystectomy?
• 14:21
  What are you getting reimbursed for this? That's
• 14:22
  collusion. You know? And that gets back to
• 14:25
  monopolistic behaviors of the payers. Yeah. And, again,
• 14:27
  it's the small hospitals are getting squeezed, and
• 14:29
  you have to ask yourself,
• 14:31
  again, do we really just want big systems?
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  Because that's what's gonna happen. And so small
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  hospitals are dying breed, especially hospitals
• 14:39
  that
• 14:40
  aren't rural enough to qualify for three forty
• 14:42
  b or or, you know, rural health payments,
• 14:44
  that type of thing. That is that's a
• 14:46
  dying breed. Yeah. Okay.
• 14:48
  How do you let's let's end maybe with
• 14:51
  a with a thought on on leadership. Right?
• 14:53
  Yeah. Because it's quite difficult environment that you're
• 14:55
  describing. How do you keep your team
• 14:58
  motivated, engaged,
• 15:00
  on the I think it's when you health
• 15:02
  care again, it there's pressures. But, honestly, when
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  you can
• 15:06
  take sick people and make them better, when
• 15:09
  you see when you can do a surgery
• 15:11
  on someone who can hardly walk and you
• 15:12
  see the improvement, when you deliver babies,
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  it's joyous. I mean and, you know, it's
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  and it is. It's culture. And I'm lucky
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  our organization,
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  it just has a fantastic culture. We wouldn't
• 15:22
  be a CMS five star hospital without that
• 15:24
  culture, without that dedication to the patient. That's,
• 15:26
  you know, that's that's what you do. So
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  I think when you stay focused on the
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  patient
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  and
• 15:31
  the rest is noise. Right? That's why are
• 15:34
  we in health care? It's for outcomes. It's
• 15:36
  for the people that we serve. And as
• 15:37
  long as you keep that at the forefront
• 15:38
  of what you do,
• 15:40
  the the culture will be there. Awesome.
• 15:42
  David, thank you so much for sharing your
• 15:44
  thoughts with us today. It's been really interesting
• 15:46
  talking to you. Thank you. Thank you. I
• 15:47
  really appreciate being here. Thanks.