Unrest at Swedish Health in Seattle
Walter Eisner • Thu, September 28th, 2017
When neurosurgeon Johnny Delashaw, M.D. joined Swedish Health in Seattle in 2013 he quickly became the hospital’s star surgeon and top earner.
By the time he resigned as chairman of the hospital’s Cherry Hill Neuroscience Institute in February 2017, the Institute was under state and federal investigations, the target of an extensive investigative report by The Seattle Times and on the losing end of a $17.5 million arbitrator’s award to a former colleague who claimed the hospital fired him for blowing the whistle on Delashaw. Delashaw’s medical license was also suspended by the State of Washington.
The whistleblower, David Newell, M.D. said Swedish Health fired him because he and others reported concerns over Delashaw. The hospital claims they fired him because he didn't tell the hospital that he had been arrested in a prostitution sting at a massage parlor. Newell pled guilty to a charge of soliciting a prostitute.
The arbitrator’s award includes $16.5 million for lost earnings and $1 million for emotional distress. Swedish Health is challenging the award, arguing the award is too high based on Newell’s earning potential.
They play hard in Seattle.
Delashaw Comes to Seattle
Newell's whistleblower award cracked open the Pandora’s Box that was Delashaw’s strategy for raising revenue.
State officials started investigating Delashaw and the Swedish Neuroscience Institute (SNI) in February 2017 after several complaints were filed against him.
According to The Times investigation by Mike Baker, Delashaw had a reputation as "a workhorse surgeon who handles hundreds of cases each year." He was reportedly the top recipient of public pension dollars in the State of Oregon from years spent working at Oregon Health & Science University.
He came to Seattle after a stint at the University of California, Irvine, where Baker found "he had been dealing with an internal investigation and allegations about the quality of his care."
An individual at Irvine with direct knowledge of the case provided the newspaper, on the condition of anonymity, documents that included the testimony from internal university hearings stemming from grievances.
The records show that Scott Goodwin, M.D., the chair of the Department of Radiological Sciences, testified that doctors in his department had flagged more than 40 Delashaw cases that concerned them.
The flagged cases included surgeries that were potentially unnecessary and others that involved significant complications for the patient.
The anonymous source has not been identified, but UC Irvine is the home of the Association for Ethics in Spine Surgery.
Promotion and Complaints
After 16 months at SNI, Delashaw became the highest volume brain or spine surgeon in the state, reportedly netting the hospital $86 million. He was made the chair of the institute. But there were also complaints against him that he had created a negative workplace environment. There were also complaints regarding patient care, inappropriate surgeries and a lack of accountability.
On March 1, 2017, three weeks after The Times’ investigation, Delashaw resigned as chair of SNI. In May, the state's Medical Quality Assurance Commission suspended his license, saying, there was "an immediate threat to the public health and safety" and that Delashaw "intimidated subordinates and put patient care at risk."
The Times reported that in documents filed to support the suspension, "commission officials said Delashaw had intimidated subordinates by yelling, swearing and making threatening movements toward staff members. That had a chilling effect on staff members, according to the commission, and some became afraid to ask Delashaw questions that were needed to properly care for patients."
According to commission documents, Delashaw demanded that a reporting nurse be disciplined for raising concerns about how he scheduled multiple surgeries to run at the same time. In another case, a nurse said Delashaw asked that she not fill out problem reports about him, his fellows or his patients.
Delashaw attorney Carol Sue Janes said that Delashaw strongly disagrees with the commission’s decision.
“It is unfortunate that the Commission took this one-sided action without giving Dr. Delashaw any opportunity to present the opposing evidence,” Janes said. “The totality of the evidence will show that the statutory standard for this type of summary action has not been met, and will support his well-deserved reputation as a world-class neurosurgeon.”
Guy Hudson, M.D. Swedish's interim CEO, apologized to staff for leadership lapses, saying Swedish leaders did not act quickly enough on their concerns
Road to Prosperity
In 2011, Providence Health & Services acquired their rival, Swedish Health. The deal added five hospital campuses, including SNI, an institution with a "storied history and a budding reputation as a global center for neuroscience research, treatment and clinical trials."
As SNI was shifting toward a high-volume practice, Providence recruited Delashaw. By 2015, SNI was generating half a billion dollars in net operating revenue, a 39% increase from just three years prior. It also had the highest Medicare reimbursements per inpatient visit of any U.S. hospital with at least 150 beds.
But over that same time, Delashaw faced 49 internal complaints from staff members.
Delashaw told The Times that he and his colleagues were doing amazing work that could “change the world” by helping cure paralysis. He acknowledged the growth at SNI has faced resistance by some staff members who have not embraced the changes.
“Some have become disgruntled and some of these health care providers have left,” Delashaw wrote. “When there is a change in culture it is commonplace for individuals to complain through the anonymous complaint system” at the hospital.
The Seattle Times Investigation
The Times spent a year examining more than 10,000 pages of records in four states, analyzing federal and state databases containing millions of records, and interviewing more than 100 people, including more than 30 current and former SNI medical staffers.
Among the findings:
- SNI surgeons were incentivized to pursue a high-volume approach with contracts that compensate them for large patient numbers and complicated surgical techniques. Of the six top-producing brain and spine surgeons in Washington State in 2015, five were part of SNI’s neuroscience team, averaging $67 million in billed charges.
- Surgeons would sometimes do little in the operating room and perform “concurrent surgery” to maintain high volumes.
- Delashaw was recruited as he was dealing with an internal investigation and allegations that he had high rates of complications and may have performed unnecessary surgeries. At SNI, more allegations emerged about the doctor, but administrators promoted him.
- Patients underwent surgeries that were more invasive than available alternatives.
- The increased volume of patients left medical staffers from the operating room to the intensive-care unit with massive caseloads, dividing the attention of ICU nurses who would otherwise provide one-on-one patient care. Some nurses were forced to be on duty for 20 hours in a day.
- Cherry Hill was flagged for having high rates of blood clots, collapsed lungs and serious surgical complications.
Medical staffers who have spoken out about their concerns reported facing intimidation and retribution. One memo cited these problems as a reason that more than 60 staff members had departed the facility in the span of two years.
“This toxic, repressive environment has already negatively impacted the ability of the SNI community to provide the quality care (to) our patients that they deserve,” wrote one neurosurgeon, Dr. Charles Cobbs, in a memo to the previous Swedish CEO, Tony Armada.
Delashaw’s internal promotion was not without controversy.
Eric Vallieres, M.D. the head of Swedish’s internal committee on surgical quality, stepped down from his position in protest of Delashaw’s promotion. Vallieres wrote a January 2015 memo telling leadership that he couldn’t do the job when administrators were promoting “an individual that has shown very little respect for the Culture of Safety and related processes.”
After being put in charge, Delashaw changed compensation rules from a "pooled" system to one where surgeons would be paid almost entirely on their production, as measured by Relative Value Units, or RVUs.
The change, according to The Times, caused a "dramatic shift" in surgical volume at SNI
Surgeons with production-based contracts, particularly in spine cases, can increase their revenue by adding more stages to a surgery.
Take, for example, a spinal decompression, in which a surgeon removes a portion of the vertebra to give more space to the spinal cord or surrounding nerves. Doing the procedure on one vertebra can total 15.37 RVUs. Doing another level of the vertebra can add a modest 3.47 RVUs.
By adding fusion, the surgeon dramatically expands the RVU numbers. Fusing two vertebrae would total 23.53 RVUs. A surgeon can add 6.43 RVUs for each additional vertebra and even more by adding more devices.
“All those RVUs equate to more reimbursements for the hospital and, under the Swedish contracts, more money for the doctors. And, with the help of spine cases, SNI has drawn more Medicare spending for every inpatient visit than any other hospital in the country that has at least 150 beds,” reported The Times.
A typical neurosurgeon performs about 9,400 RVUs per year, according to the Medical Group Management Association, a firm used by Swedish and other hospitals to monitor compensation levels. Documents showed that Delashaw and another surgeon each exceeded 27,000 annual RVUs in recent years.
State regulators and Department of Justice investigators will determine if the surgeries were necessary and appropriate. Delashaw is contending that this was all about professional jealousy.
“Everyone does not always appreciate growth and success. The former neurosurgery chair and the chairman of radiology were unhappy with and envious of our success, all too human frailties, as it had not been achieved prior to my arrival,” Delaware wrote to The Times.