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Note: This piece was originally published over the weekend in our Sunday newsletter. Want content like this delivered to your inbox before it hits our blog? Subscribe here.

The Big Story: UnitedHealth Posts Higher Quarterly Revenue, Raises Earnings Guidance

“The healthcare and health-insurance giant, the first industry heavyweight to report first-quarter results, posted double-digit revenue growth at both its Optum and UnitedHealth care units.”

Must be nice.

The State of Play

While insurance companies appear to be doing well, our hospitals are staring at some bleak Q1 numbers. Why? Well, consider that:

• COVID-19 relief funds are drying up.
• Patient volumes for many services are below pre-pandemic levels and may or may not recover in Q2.
• Demand for staff exceeds supply. When there’s not enough staff, some patients needing care can’t get it (feeding the problem above).
• The cost of the staff hospitals do have is through the roof and unsustainable.
• Inflation is clocking in at 8.5 percent. That’s producing multiple ripples. Cost-conscious patients may be reluctant to spend to get the care they need – especially for preventative care. And staff pay raises are unlikely to keep up with the cost of living, making retention all the more difficult.

What to do? A traditional response by health systems to these pressures would be to cut costs through layoffs or service closures.

• But many systems already cut services and staff deeply during the pandemic. Few today will let go of staff in such a competitive marketplace.
• The high cost of care is a barrier to all but the most urgent patient volumes. This only becomes more acute during periods or massive inflation, when, pound for pound, everything costs more – whether ground beef or gasoline or medical equipment.

One possible source of at least partial relief is renegotiated payer contracts. We’re hearing from more provider organizations in our network that they’re considering – or undertaking – new negotiations. Payers will likely respond aggressively, and with increasing tension between the two, patients are at risk of getting caught in the middle. And that’s never good.

However, some payers are willing to come to the table in recognition that we’re all in this together and the distinction between payer and provider is merging. Where those constructive conversations can take place, it serves as an example of the wider opportunity for partnerships of all stripes – which also include joint ventures with private equity back partners, shared-service alliances with other systems or outright sales for scale and financial stability.

For health system communicators, get ready for change. Again. Here’s how to brace for it:

• Be at the table. Find the time and the path to being part of the strategic conversations happening in your health system today, across executive leadership, operations, finance, legal and government relations.
• Know your story. In times of stress or change, leadership teams can have multiple stories they want to tell. The perspective of communications chiefs is invaluable to helping leadership stay focused on the core messages while maintaining the agility to respond to the changing environment.
• Be responsibly transparent. Times are still hard. Change will continue. Know that you will need to tell this difficult story and explain some hard truths to the community you serve. But it’s better that you tell the story first than letting someone else twist it for their own purposes.
• Have coffee with a reporter. Build relationships with local media as much as you can. Reporters these days often have wide mandates and cover a lot of topics. That means the nuance inherent to big issues facing the local hospital or health system isn’t always reflected in coverage. Be a year-round resource for local business reporters who may have a byline on the story about your next payer battle.
• Be ready for the fight. The stakes have increased, and payers are pushing hard. Provider organizations want to focus on delivering care, not arguing about money. But that, unfortunately, is necessary.
• Keep the conversation going. Whereas payers are constantly negotiating contracts – it’s their business model – any given hospital is only doing that every few years. Ensure your team is keeping an eye on trends, communicating to stakeholders about what you’re doing as an organization and updating your playbook for the next negotiation.
• Don’t accept a turnkey approach. Payers are working from a thick, and broadly consistent playbook. Still, every story, every negotiation, every community served looks a bit different. As payers are becoming increasingly aggressive, you need to ensure that your plan reflects your unique needs.
• Be grounded. Bring everything back to your mission, your calling and your duty to serve.

This piece was originally published over the weekend in our Sunday Quick Think newsletter. Fill out the form to get that in your inbox every week.

Note: This piece was originally published over the weekend in our Sunday newsletter. Want content like this delivered to your inbox before it hits our blog? Subscribe here.

The Big Story: Healthcare workers fear for the future after ex-Vanderbilt nurse found guilty in 2017 death of patient

“A local trial focused on a former Vanderbilt University Medical Center nurse has sparked nationwide interest. RaDonda Vaught was found guilty on Friday of criminally negligent homicide, after accidentally giving a patient a fatal dose of the wrong medication. ‘I’m terrified that I’m now in a profession where, God forbid, I do make a mistake,’ said one nurse outside of the courtroom.”

Where We Are Today

2-minute read

That quote serves as an intense summary of the concern felt by caregivers across the country, and it adds another layer of pressure on provider organizations already struggling to fill nursing roles. A joint statement by the American Nurses Association and Tennessee Nurses Association says, “The criminalization of medical errors is unnerving, and this verdict sets into motion a dangerous precedent. Like many nurses who have been monitoring this case closely, we were hopeful for a different outcome. It is a sad day for all of those who are involved, and the families impacted by this tragedy.”

The whole situation is awful. The tragedy of Charlene Murphey’s death and everything surrounding it. The worry this adds to an already exhausted healthcare workforce, many of whom were considering their future in the profession before the verdict. And it adds to the trouble that no provider organization needs with staffing the number one concern across the country.

We will continue to watch and discuss this situation and potential fallout. It’s a tense moment that will further strain the relationship between staff and administration. It’s also one that could exacerbate existing challenges both for individuals and healthcare institutions. For now, a few brief thoughts for leaders of provider organizations:

• Your radar is on. Keep it up. This verdict and the circumstances surrounding it will reverberate for a long time. Have an ear out for how it’s being discussed – by the public, by healthcare professionals, by other stakeholders within the industry.
• Your nurses are talking about the situation and your organization needs to hear what they’re saying so you can understand the concerns. You know your organization the best, so be present in whatever way makes the most sense for your culture. But be there – whatever that means for you – to hear from your nurses.
• Bring everyone around the table. Clinical leadership, operations, legal, HR. Have conversations about how the organization’s mission, vision, values – as well as its commitment to supporting caregivers in a culture of safety – should be applied in this moment. You’re likely to already be having some of these conversations. We encourage you to ensure that everyone is represented and that the discussions are rooted in your mission to serve and to care.
• Begin looking at how your organization can support and protect your nurses from an operational standpoint. Work with your team to identify areas where things can be tightened up to limit the chance an error will occur, or where an error is even an option. Nurses are under so much pressure, any place where that pressure can be reduced and safety improved is worth a look.
• When appropriate, let your nurses know what you’re doing and how you’re working to support them. Be clear and honest about your organization’s position and the thoughts of leaders within the organization.
• If you find yourself trying to say something but unsure of what it is, that probably means there’s more to learn. Go back to the start and listen some more.

This piece was originally published over the weekend in our Sunday Quick Think newsletter. Fill out the form to get that in your inbox every week.

Note: This piece was originally published over the weekend in our Sunday newsletter. Want content like this delivered to your inbox before it hits our blog? Subscribe here.

The Big (?) Story: Jury sides with Sutter Health in federal antitrust case

“A jury sided with Sutter Health on Friday in the long-running federal lawsuit accusing the health system of anticompetitive business practices that drove up healthcare costs by more than $400 million.”

What it Means for Health Systems

(3-minute read)

The short version of what the Sutter result means: One specific health system won one specific legal battle.

That’s it.

Time for more? Read on.

The California health system’s case is making waves in the healthcare trades and among industry insiders. Understandably so. A large system received a favorable jury verdict regarding alleged anticompetitive practices in an environment where that outcome was far from a foregone conclusion.

But while Sutter can take a breath, the provider side of the industry can’t. Or at least shouldn’t. Because this legal result does nothing to change the big-picture issues that are facing hospitals and health systems. Remember that this case began a decade ago and has focused on insurer contracts and antitrust issues, which have direct implications for the cost of care and patient access. Those topics are as hot today as they were 10 years ago.

A few key points stand out when looking at the decision. Note: We’re not making any statements about the legal issues. For that, we’ll recommend this concise piece from our friends at Bass Berry & Sims.

• “It’s complicated.” In coverage of the jury’s decision, the words “technical” and “complex” came up repeatedly. It was clearly (and rightfully) a challenge for the experts to break down for the jury. The implication is that the complexity of the case made it difficult to clearly determine that Sutter had done wrong. So the default, when faced with a binary choice, was to side with Sutter. Another Modern Healthcare article that discussed this case and its “cousin” case – which Sutter settled – makes this very point. It’s that subtle philosophical difference between “innocent” and “not guilty.”
• The narrative continues. What happened in the courtroom isn’t likely to mean much in the court of public opinion. The fortunes of one health system aren’t likely to alter the ongoing barrage by critics who maintain that hospitals are Big Business focused on profit over mission, they engage in willful anticompetitive practices, they harm patients through financial malfeasance.

So, yes, the case may have an effect on contracts in California going forward. But this verdict is a sidenote when it comes to the overall trends in healthcare and public perception thereof.  The critics are simply reloading.

So how should providers react?

1. Unless you’re Sutter, don’t relax. Talk to your legal team. Appreciate that the federal case was an overreach and perhaps too detailed for the plaintiffs to win. Certainly don’t assume that the FTC, DOJ, insurers or anticompetitive activists will back off.
2. Evaluate the opposition. A single legal loss in a high-stakes and very large scale, systemic dispute won’t deter those siding with the plaintiffs. If anything, hospital critics now have more information about what works and what doesn’t when it comes to pushing the anticompetitive narrative. They’ll use their notes to build a stronger and, presumably, clearer case for next time. Frankly, we’ve consistently seen that hospital critics do a pretty good job of telling a compelling story. Expect this setback to both encourage them and provide them with new resources to further refine their narrative.
3. Prepare for more. Continue reviewing both your operations and your communications. As always, get everyone in the room for discussions about how your organization is approaching the myriad financial issues raised by critics. Look for gaps and misalignment between clinical, ops, marketing and comms, government relations, community outreach, legal and payer relations. Then, for the marcom team specifically, double down on telling your organization’s story.
4. Speaking of payer relations… the Sutter case with several other recent high-profile public provider-payer disputes, show how quickly things can escalate once that tension first appears. Avoid escalation. Have your GR team engaged and building relationships with policymakers. Same thing for your payer relations team. That way, if – when – things get tense, you’re starting with a base of personal relationships and mutual understanding. We’re not naïve enough to suggest that occasional drinks with a payer rep is enough to stave off a contentious negotiation, but a bit of human connection won’t hurt. Additionally, even if you “win” a nasty battle, the critics will have had plenty of chances during the process to put dents in your reputation. Over time, dents can become cracks and, well, that’s not ideal.

This piece was originally published over the weekend in our Sunday Quick Think newsletter. Fill out the form to get that in your inbox every week.

A Note on Responding to Current Events, from CEO David Jarrard

2.5-minute read / 13-minute podcast

Do you weigh in as an organization?

It’s not a simple answer. It’s a challenge our clients have faced many times over the past two years as outlier events have swept across the globe. This is true again as Russia continues its brutal invasion of Ukraine. Our clients ask us: “Do we need to issue a statement? Can you help us create a message? We’re not sure what to say but we think we need to say something.”

The first question to ask: Why?

Thoughtful leaders want to acknowledge important moments. To take a stand. To show solidarity with those in trouble or in need. As you consider whether to do so for your organization, the answer may lie in how you’ve asked yourself the question. If you’ve asked, “Do I have to weigh in?” when no one is looking for your corporate position, then the answer is very likely “No.” But if circumstances or your mission call you to weigh in, the answer may well be “Yes.”

We all recognize that organizations speak with the greatest authority when the subject is aligned with their expertise and reputation. A healthcare organization opining about important healthcare issues is your natural lane (i.e. COVID vaccinations and health equity). It is expected that your organization would speak to these and other important matters; it’s desired and needed, in fact.

The further the subject strays from your organization’s mission and expertise – to national politics, for example, or events around the globe – the thread connecting the subject and your authority, credibility and relevance weakens. If you comment on one disconnected event to which you bring no authority, you create the expectation that you will be commenting on an array of disconnected matters in the future.

The cliché is true: If you have nothing to say, don’t say it.

But. But! Sometimes what may appear to be a distant matter is actually close to home. There may be local ties in your community that bring it to your doorstep. You may have a service providing care that is directly impacted by the issue. You may serve a community bound to the region affected. You may have staff personally affected by it. Then, the call to speak is strong, local and relevant.

Do you serve a Russian or Ukrainian community within your market? Do you have Russian or Ukrainian immigrants or their descendants working in your facilities? Do you have a unique service that offers aid to that war-torn region or even to others oppressed in or from violent areas? If yes, the call to speak – to make clear your position and expectations – is strong. In fact, you should.

There is a third scenario, one in which you don’t have a direct line to the situation but your heart and mission simply demand your voice. As you speak – and many will – we suggest you simply acknowledge the uniquely and tragically horrific circumstances that call for your voice so, again, you don’t find yourself expected to provide commentary on world events in the many days to come.

An unfortunate byproduct of the social media era is that everyone has an opinion on everything, and people, leaders and organizations often feel like they’re expected to say something. So they worry about getting called out if they don’t. It’s part of that social media hype chamber. If that’s you, and you’ve concluded that saying something isn’t necessary or directly connected to your mission, give yourself permission for intentional silence.

A final note: If someone does come after your organization on social media for not saying something, the best practice is to respond publicly while bringing the conversation offline. Reply, “Thanks for your feedback. I’d love to talk about this and hear your perspective. Can we set up a conversation?” The key is to be responsive and not react disproportionately.

This piece was originally published over the weekend in our Sunday Quick Think newsletter. Fill out the form to get that in your inbox every week.

3-minute read

The Big Story: Not-for-profit hospitals don’t earn tax exemptions, researchers say

“Not-for-profit and for-profit hospitals report similar levels of unreimbursed Medicaid costs even though not-for-profits receive billions of dollars a year in tax subsidies, new research shows.”

Key graf: “’The nonprofit hospitals have not done enough to deserve their tax subsidy,’ said Ge Bai, an accounting professor at Johns Hopkins University and lead author of the study. ‘Taxpayers subsidize hospitals to help struggling, working-class Americans, but many nonprofits are not doing enough.’”

What it Means for Health Systems

Another brick pulled out of the wall.

Hospital critics have picked up another powerful, compelling dataset in the national campaign to paint hospitals as Big Business more focused on profits than on care. Painful though it may be to hear, the Modern Healthcare article is a strong piece about the situation some hospitals across America find themselves in. Even our own research shows that just 41 percent of people strongly feel their hospital is a good community partner. In addition, these situations signal the expectations among the public and state and local regulators about where those community benefit tax-equivalent dollars are spent. In short, they want to see more than just sponsoring the local minor league baseball team.

This conversation isn’t going away. The Big Business narrative will continue to build momentum if hospitals don’t tell their own story, are unable to or, worst of all, have a story that doesn’t line up with the reality.

Two things to bear in mind about these articles:

• There’s a careful, data-driven and emotionally charged campaign by critics seeking to pin the blame for our dysfunctional healthcare system squarely on hospitals.
• There’s misalignment within hospitals in getting their mission-driven story across the finish line and making sure their words are backed up by their actions. The door to criticism is cracked open when there are disconnects between different departments and different initiatives. And – critically – between the different levels of the organization to identify problems and ensure that every move made is in service to the mission. Hospital critics then shove that door wide open, leading to Congressional hearings and class action lawsuits.

So here’s our advice this week:

Check your story. Now – Put time on your calendar to have a real conversation. Soon.

• Non-profit hospital or health system execs – Connect with your marcom, finance and clinical leadership to compare notes about how your organization is talking about the work it’s doing in the community and how that lines up with what it’s actually doing in the community. And is it what the community actually needs? Baseball team sponsorship vs. affordable housing. Your call.
• Marcom leaders – Initiate that same conversation with your colleagues and C-suite.
• For-profit leaders – Sure, the tax-exempt piece won’t apply, but that doesn’t mean you should miss the chance to review where and how your charity care and other community benefits are delivered. You, too, have a mission and a story…and critics.
• Health services company execs – Bring your leadership team around the table to discuss ways that you’re giving back and aligning ops with mission. You may not be under the gun for IRS status, but, like the for-profit crew, it’s still worth taking a look. Private healthcare companies, particularly those backed by private equity, are taking hits as well.
• Healthcare attorneys – On your next call with a non-profit hospital or health system client, ask them if they’re checking their story. Encourage them to think beyond compliance and consider the whole picture around charity care and tax-exempt status as a function of their mission.
• Strategy or operations consultants – Ask how the project at hand fits into the mission to care for your client’s community. Ask your client to review the numbers and projections and then work with marcom to align those outcomes to the story they need to tell.

The knives are out, the narrative has taken shape and the numbers very often don’t look great. It’s not a time to spin and, frankly, even if you wanted to it’s not going to work anymore. It’s a time to buckle down and get it right, to match the desired outcome with the actual outcome, to match the stated mission and the desire and passion of you and your team and your clinicians and staff with the way care is delivered – both medically and financially.

After those conversations, get ahead. What’s interesting about the tax-exempt line of attack is that there’s no mention of outcomes. The criticism is purely financial. The push from critics as currently constructed is to spend the money, not to spend the money and achieve <X>. So that’s a fantastic opportunity for provider organizations. Align on where the money is going – get clear on charity care and all the rest – and then talk about how you’re not just spending it but also moving the needle towards better outcomes and equity. “Our critics say we don’t spend enough in the right places. We’re not just spending it but investing it in our community, and here are the returns.” That’s a winning, mission-driven message to leapfrog the Big Business naysayers. Just make sure it’s true.

This piece was originally published over the weekend in our Sunday Quick Think newsletter. Fill out the form to get that in your inbox every week.

Note: This piece was originally published over the weekend in our Sunday newsletter. Want content like this delivered to your inbox before it hits our blog? Subscribe here.

3-minute read / 20-minute podcast

The Big Story: Brian Flores sues NFL, three teams as former Miami Dolphins coach alleges racism in hiring practices

The recently-fired head coach of the Miami Dolphins just rocked the sports world with a class action lawsuit alleging systemic racism, disparate hiring practices and incentivizing losing. The NFL came back with a near-instant response saying that Flores’ accusations were “without merit.” Dolphins owner Stephen Ross has responded with a statement that includes the very legal terminology of “false, malicious and defamatory.” Then on Saturday, the NFL sent around a memo saying the organization was bringing in outside council to review its policies.

Why We’re Writing About It

Why, indeed, is a healthcare communications firm writing about a lawsuit against the NFL?

Because this story encapsulates so much of the work we do, the advice we give and the best practices for how – or how not – to communicate in a crisis. Because sometimes it’s good to look at outside examples to shake us loose and give a fresh perspective on long-standing principles.

Principles such as…

Check your story. Remember all those times we’ve written about how hospitals need to be proactive and tell the story of the good they do for their community? Or, if faced with scrutiny, respond with a compelling story? If so, you’ll also remember the warning that comes along with it: Make sure the story you tell is consistent with what’s actually happening inside your organization. For instance, a hospital can’t brag about helping patients navigate their healthcare finances when they’re suing them for nonpayment.

In the NFL’s case, the organization’s immediate response of calling the accusations “without merit” looks rash since it came within hours of the filing. Was that really enough time to have actually gone through the dozens of pages and confirmed that they were in fact without merit? Put another way, are the NFL and three teams being sued REALLY sure that they’re not behaving as accused?

Take time. Inherent to checking the story is that it takes time to do so. The NFL probably could have afforded to wait just a breath before releasing it’s “without merit” statement. Is it a crisis? Yes. Could they have taken a little longer to review the claims and craft a better message rather than one that looks like it was copied and pasted from some sort of “In Case of Lawsuit Break Glass” document? Also, yes. If you find yourself in a crisis, don’t wait around. But don’t go so fast that you rush past a meaningful response.

On Saturday, the NFL did in fact commit to “reassess and modify” the way it goes about things. But coming days after the initial, definitive statement instead of being the first thing released by the NFL, the memo opened the door for additional skepticism.

Prepare. We’re not talking copy-paste here. But you need to have a crisis plan in place with the basic blocking and tackling components. Think general talking points, FAQ, list of potential spokespeople, overarching underlying message. Armed with that, you can use those critical first moments of a crisis to review and home in on the situation. You’re not going to recycle the same talking points for every situation. But having a plan built around the tools needed and the underlying, mission-based message that you’ll want to convey no matter what is the difference between reflexively saying, “Nothing to see here!” and “We’re committed to serving our community and want to ensure that our actions reflect that. We’ll be investigating <XYZ> thoroughly. In the meantime, here’s what we know right now.” Again, it’s the difference between the NFL’s initial statement and the Saturday memo. Better to start with the latter and not backpedal into it.

Know the limits of your credibility. In addressing a crisis, consider your community’s perception of your organization’s reputation. We all know the NFL doesn’t have the best history when it comes to responding to explosive allegations. Their handling of the concussion scandal (which also included an ugly element of racial bias) and various instances of violence and abuse by players has left the organization without much reservoir of good will. Or benefit of the doubt. That’s another reason the instantaneous “without merit” comment looks hollow. Better, perhaps, to acknowledge previous missteps and use that as a foundation to talk about what comes next.

Know the difference between the people and the organization. This is the White Coats vs Dark Suits element. People love their docs. They love their local hospitals. But they lean skeptical about the big business of healthcare. Likewise, in the NFL, people love their team and particular players on it. But then there’s the perception of the organization, the impression that it often cares more about protecting the brand than doing the right thing, its Big Business operations that burn through trust and credibility. The appreciation the public has for the people doing the work – players/caregivers – doesn’t necessarily radiate out to good feelings for the organization – NFL/hospital. If the organization behaves badly, it won’t have much cover from the individuals.

And so here, we see a highly successful and credible voice who has worked at every level of an organization over the course of two decades. He’s making a powerful, emotional and specific accusation. However it all plays out, the NFL reminds us of the two-fold process facing an organization under scrutiny: First, of course, is actually doing the work and doing the right thing. And then it also means taking the time to communicate in a way that is consistent with the stated mission and values of the organization…or risk leaving room for the implication that those aren’t really the mission and values at all.

This piece was originally published over the weekend in our Sunday Quick Think newsletter. Fill out the form to get that in your inbox every week.