Healthcare Voices podcast series: with David Dunkle, Johnson Memorial

Hello, and welcome to the Becker’s Healthcare podcast. My name is Will Riley. I’m joined today on the podcast by David Dunckel. David is CEO of Johnson Memorial Health. Welcome to the podcast, David. Hey, Will. Thanks for having me. It’s great to be talking to you again. So David, to start off, tell us a little bit about yourself, tell us about Johnson Memorial and what’s going on. Yeah, so a little bit about myself. So I started out in healthcare as a family physician, practiced for eighteen years, Actually went to college in the town where I work now, where my hospital is. I’m kind of a lifer, stuck around. So I practiced for about eighteen years, was involved in different medical staff positions, chief of staff a couple of times, and moved into vice president of medical affairs. In twenty nineteen, became CEO of the organization. So really enjoy it. Love the community. We’re in a growing suburb just south of Indianapolis. But Johnson Moral Health, it’s a one hospital system, about nine hundred employees, about one hundred and twenty million dollars in net patient revenue. But we really stress quality and safety. Again, we really look at that strategically as a differentiator. And when you’re counting a hospital, you fight that, is it a Band Aid station moniker? And you always worry about that. So we always say we’re never going to skimp on safety and quality. And it shows. We’re a CMS five star organization. Though it’s embargoed, we’re very happy with our LeapFrog score that will be publicized very shortly. So again, just a great organization. We say everything we do is put the patient first. We mean it because when you’re a community hospital, that’s what you have to do. And patients have to know that when they come to your hospital, they’re getting as good a care as anywhere else in the state. Yeah. Okay. Tell us a little bit about that community. Is it urban, suburban, rural? And what’s the kind of payer mix? So it’s a mix because we’re just south Minneapolis, so suburban away. It’s also, if you go a little more south and from our location, it gets pretty rural. And you do have people that I still remember as a family doctor, someone saying, Yeah, I come in to go to the mall one time a year and get my physical. That’s the kind of thing. But unfortunately, our payer mix is not advantageous at all. It’s a mix of there’s a lot of nursing facilities, large ones, in our community. So large Medicare mix, large Medicaid mix overall, we have seventy percent governmental payer. So that puts a lot of pressure on that I think when I start conversation in the community, a lot of people don’t realize. In Indiana, Indiana Medicaid, zero five seven on the dollar total cost of care. And I think nationally, we know Medicare is about zero eight two dollars on the dollar. So it’s hard for people to understand, but seventy percent of our business, we’re losing money. And that puts more pressure on that thirty percent, the commercial payers. You call them payers, but they don’t pay. So that puts a lot more pressure on community hospitals like ours. And again, like lots of hospitals, we want to stay independent, but it gets harder and harder every year to really, when you look at the landscape of what’s happening and you look nationally at how many rural hospitals are closing. And it’s disappointing because that’s a lifeblood of a lot of communities. Not only do rural hospitals tend to be the largest employer in the county, but again, that’s where those people go for care. And you wonder, as you see these hospital closures, are people going to travel to a medical center that’s thirty five, forty, fifty minutes away? How long are they going to put off their chronic condition before they have a much worse health outcome? And again, as a family physician, especially, you know, obviously, I don’t see patients who aren’t administered, you never stop being a physician, never stop caring about patients. Yeah, right. And I can imagine then the current legislative agenda has some concerns for you. Yeah. It’s it’s rough. You know? No understatement. Yeah. I mean, especially, we’re just continuously being asked to do more with less. And we’re already seeing our charity care already going up. Indiana, like many states, is is you know, they’ve tightened the Medicaid enrollment. We have more people come to our ERs that do not have insurance, so we try everything we can to obviously get them signed up. That is. That’s a strain on the organization. Then what happens, again, is people put off the care that they need until now they have a worse health outcome. Now they’re being admitted because they’re in kidney failure or they have a bad pneumonia when they could’ve been treated with antibiotics a couple weeks earlier. So it puts a strain on the system. We’re definitely seeing that, though we work hard. We work hard to get people signed up who are eligible for Medicaid. We try to get people benefits. We obviously work with payment plans, that type of thing. Because, again, we want to provide care to everybody. Yeah. Yeah. Okay. So that’s the environment. And then, one of the narratives we’ve been exploring on the podcast over the last few days here has been around the rise of technology and the rise of artificial intelligence. And talking about that as a new wave of technology, where healthcare has been pretty conservative about investing in technology in the past, but actually that seems to be a little flipped when it comes to artificial intelligence. And people are really enthusiastically adopting it in clinical and administrative workflows. So before we get into the practicalities of it for you, do you agree with that? Are you seeing that too? Is there real enthusiasm for this technology that you haven’t seen before? Yeah, definitely. And the thing is too, because with the AI or some other technology, you’re actually looking at long term cost savings. And again, there’s always that upfront cost, which for organizations like ours that have very thin margins, if margins at all, you always have to worry about it. But when you have the opportunity, you look at rev cycle and fighting denials, that kind stuff. Well, AI works twenty fourseven. It works on weekends. It doesn’t take vacation. It doesn’t get sick. And so long term, that can pay off. And again, you’re taking human error out of it. So that’s really where there is a lot of potential ROI. And again, but for us, it’s like deploying any type of capital. Is there ROI? What’s implementation? How long does it take? How long until you see the benefits? Everyone because when you talk about things like ambient listening technology, everyone sees those again, physicians love it. And you talk about decrease in pajama time, that kind stuff. But again, that has a cost. And again, I still joke. And I’m an old school family doc who used to see thirty five, forty people every day with a dictaphone, right? You dictate, you put in a couple batteries, and guess what? The next day, amazingly, your notes are on your chart at nine dollars an hour. And you know what? You don’t have to worry about any cyber attack happening into your dictaphone. Because, again, that’s a big cost to cybersecurity, that type of thing. But AI and for patients, they don’t realize, too, when you go in and you’re having a hip replacement, and AI has been utilized to make that perfect cut so the surgeon makes a perfect cut to navigate the best approach. And we’re seeing great clinical outcomes. So I think the growth of AI, the sky’s the limit. And it is. And I’m enthused about it because I do, again, I think it will ultimately result in, one, better patient care, but two, hopefully better reimbursement for organizations who utilize it correctly. But how do you think about making those investments? Because you’ve painted a picture that’s quite difficult, right, from an operating perspective. Like you said, all this stuff costs money. So how do you decide how to allocate those resources? Well, it’s difficult. And I think for organizations like us, it’s really finding partners who you trust. And again, when you’re a small organization like us, you’re never going be the first to adopt the latest technology. And again, lot that is just affordability. We can’t afford to make a mistake. We can’t afford to make an investment that doesn’t pay off because capital is so limited. I joke because I’ve been at conferences and I’ve heard CEOs of big organizations say, boy, I could just make a list of all the big mistakes I’ve made and where I’ve deployed capital in the wrong areas. I can’t do that. I joke with my executive team, it’s a lot of pressure when every hit has to be a home run. And so I think it’s really you have to trust your partners and trust that things have been properly vetted. And then you do look at things. And again, you have to talk to your stakeholders. Who’s it affecting? Is it affecting your rev cycle team? Well, let’s talk to the CFO, rev cycle director. Let’s talk to those frontline people. And you’ve got get them enthused about it. That’s the biggest problem you’ve seen in other organizations is when they roll things out too quickly or you don’t explain it. Again, as a family physician, you always explain things so people know they get on board of what the treatment plan is. It’s the same with AI. I think education is top of mind for all that. Yeah. Okay. You’ve talked about the payer environment a couple of times, talked about the promise of some of this technology in terms of revenue cycle application. You mentioned, I think, thirty percent of your payer mix is commercial. So it sounds like the dynamic there is difficult. Can can you tell us more about that? Yeah. It’s very difficult. As I said, we have so much pressure to optimize, you know, our contracts with payers. And, you know, and it’s very disappointing to me, again, being a clinician. And we had a CFO leave, so in the interim process, I had to get a lot more involved in the day to day, work with the revenue cycle director, work with HIM, and really looking at some of these denials that we were receiving. And it’s just egregious when you have an inpatient stay and they ask the same chart notes eight times on the same patient and things like that. And again, you’re talking about timely filings, slowing things down. And I just don’t understand how we have to fight so hard to get paid for the care that we’ve already delivered. And a lot of people don’t realize some of the other practices now you’ll get a letter from a payer that says, hey, you know that hospitalization a year and a half ago from Mrs. Smith? Well, now we think we overpaid you and you owe us this amount. And you have thirty days to respond. It’s just the you feel like you’re getting bullied. And that is really it’s disheartening because when you have thin margins and the payers are allowed to do everything they can not to pay you for the care that you’ve already delivered. You’ve already paid the physician. You’re paying the nursing. You’re paying for the equipment. Everything’s paid for, and then you just have to constantly try to get paid what you deserve. And that’s difficult. And then for a small organization like ours, I tell people that one of the problems with medicine is, again, we’re a five star CMS hospital, great leapfrog scores. If you come to my hospital, I guarantee you your risk of a fall, catheter associated infection, a central line infection are slim to none. I I don’t want to jinx it, but we haven’t had a central line infection in three years. So you can come to me and say you need procedure X. You can go to another hospital, big system hospital, not far, CMS, two star, bad safety scores, same procedure, same everything, they get X plus something. They’re getting paid more. When your environment as a patient, you’re in a less statistically less safe environment. How is that right? You know? That’s why there needs to be more parity. There needs to be more parity. A gallbladder here, you get paid this. A gallbladder there, you get paid the same. But unfortunately, I think without the only way that will ever occur is legislatively. And it’s we hospitals are being pushed so much, and it’s a monopoly. It’s monopoly behavior on the payers. I mean, in Indiana, you look at the largest five hospital systems in the state. I think they control forty nine percent of all commercial beds. The four largest payers control ninety seven percent of commercial beds. So that’s where the monopoly is. But I give the payers credit. They win the public opinion poll. Oh, hospital prices are crazy. Your health insurance is so high because hospitals just they’re greedy. Well, look who’s making the money. Know, look at the payers. Again, and you have to break it down to they have and where’s the fiduciary responsibility? If are a leader at a payer, your fiduciary responsibility is to maximize profit for your shareholders. My responsibility is to take care of patients. That is misalignment. And until there’s more pressure for those things to be aligned, patient care to be at the forefront of everything we do, then you’re going see small hospital closures all across the country. And that, again, just makes me sick. Yeah. Do you think that I mean, I wonder if how can technology help with that? Because we’ve talked about automation of revenue cycle. Right? So theoretically, it’s now much easier to create a perfect claim than it ever has been. Right? And and get that process happening much faster than it’s ever happened. Is that is that a is that a promise? It it it’s promising, but there’s you can get a perfect claim. That doesn’t mean the perfect claim is going to be reimbursed. That is the issue. You know? And, honestly, I think I think that payers should be fined if you have a perfect claim denied. And I think that’s where technology, to your point, you have a perfect claim. It could be proved it’s a perfect claim. The payer knows it’s a perfect claim and they’ve denied it. They should be penalized, just like we can get penalized or you’ll get called back and that type of thing. So yes, I think that’s a great point. That’d be a great use of the technology. And the thing is, we have the technology. We have the technology approved. It’s a clean claim. But the other thing you always have to be aware of, payers change the rules all the time. They post something on their website where, oh, not paying for readmissions anymore, just like CMS. Just a little posting so they can make decisions. Like in Indiana, you can make a decision that affects every hospital in the state, but I can’t call my friend at another hospital and say, hey, what are you getting reimbursed for a cholecystectomy? What are you getting reimbursed for this? That’s collusion. And that gets back to monopolistic behaviors of the payers. And again, it’s the small hospitals are getting squeezed. And you have to ask yourself, again, do we really just want big systems? Because that’s what’s going to happen. And so small hospitals are a dying breed, especially hospitals that aren’t rural enough to qualify for 340B or rural health payments, that type of thing. That is that’s a dying breed. Yeah. Okay. How do you let’s let’s end maybe with a with a thought on on leadership. Right? Yeah. Because it’s quite a difficult environment that you’re describing. How do you keep your team motivated, engaged? I think it when you health care, again, it there’s pressures, but honestly, when you can take sick people and make them better, when you see when you can do a surgery on someone who can hardly walk and you see the improvement, when you deliver babies, it’s joyous. And it is its culture. I’m lucky our organization, it just has a fantastic culture. We wouldn’t be a CMS five star hospital without that culture, without that dedication of the patient. That’s what you do. So I think when you stay focused on the patient and the rest is noise, right? That’s why are we in health care? It’s for outcomes. It’s for the people that we serve. And as long as you keep that at the forefront of what you do, the culture will be there. Awesome. David, thank you so much for sharing your thoughts with us today. It’s been really interesting talking to you. Thank you. Thank you. I really appreciate being here. Thanks.