The Hospital: Life, Death, and Dollars in a Small American Town by Brian Alexander
This non-fiction book chronicles the journey of a hospital and those who work there between the fall of 2018 and the summer of 2020. The narrative is centered on Phil Ennen, the CEO of the Community Hospital and Wellness Centers (CHWC) in Bryan, Ohio. Phil has worked in the hospital for over 30 years and is committed to both the business side and the mission piece of the hospital. CHWC (also known as Bryan Hospital) is like so many health institutions in the rural United States, which find it increasingly difficult to make enough money to keep the care flowing to the community. The opening pages of the book describe an emergency situation where the staff frantically tries to save the life of a patient. Even with the drama and tension of the moment, people have to scan the barcode of every device used so that the billing will be accurate and timely.
Bryan is located in Williams County, Ohio, a rural area in the northwest part of the state. The local economy had tanked twenty or thirty years ago as manufacturing left the region. The Great Recession of 2008 hurt the local economy which had never quite recovered. CEO Ennen’s job was to keep the hospital independent and functioning in a fiscally responsible manner. Every month, that became more difficult.
In 1920 the area had a mix of manufacturing and farming businesses. Despite a growing population and a prosperous economy, there was no hospital within many miles. There was no across-the-board demand for such. Back then, medical care was not considered a right. There was no health insurance and almost no public health funding. Patients paid for services. People who had the means went to a distant medical facility and covered the bill. The rest – poor and working-class people – couldn’t get health care. Aside from not being fair, excluding much of the population from medical care hurt rural doctors who had very low income because of a lack of paying customers.
While community leaders kept working to open a hospital, the Depression stalled their efforts. In 1934, a surgeon with a very wealthy wife figured that his practice would be much more lucrative if there was a local hospital to attract patients. Dr. Donald Cameron, the benefactor, put the money up, bought the land, and built the facility which opened in 1936. The facility stayed private until the 1970s when the founder, Dr. Cameron, found himself in some legal trouble and spun it off as a non-profit community hospital.
In October, 2018, hospital CEO Phil Ennen faced an annual unpleasant task. As the fiscal year ended, there was a 2 percent operating loss on the balance sheets. This was normal; each year, Phil had to take out bank loans and pull money from various sources to paper over small losses to keep operating. One persistent problem was that, as a small community hospital, CHWC charged its patients less for services and received lower insurance reimbursements than did the big hospitals. Another problem was that the small hospital did not provide the sophisticated services such as organ transplants that earned premium reimbursements and fees.
A local auditor put it well when he said, “The pressures on a small, rural community hospital are great.” People in the area were getting older and sicker and more reliant on Medicare and Medicaid, which paid very low reimbursements which led to operating losses. Relatively few patients had good private health insurance. Obamacare expanded coverage and increased payments which helped a bit. CEO Ennen had added a sophisticated catheter service and a radiation oncology center which produced solid revenue, but it was always a tough financial slog.
Ennen had just established a women’s clinic and brought in a respected female obstetrician who happened to be a Muslim. This initially ruffled some local feathers since Williams County where Bryan was located voted 69% for Donald Trump. Despite that, things eventually worked out fairly well and more revenue came in.
Another problem was that the hospital, like many medical facilities around the country, had trouble implementing the 2009 mandatory electronic medical records mandate from the federal government. They finally got it right, but for many years the implementation bled money.
Author Brian Alexander recounts the situations of several local people who saw their health care costs spiral out of control over time. Typically, as was the case all over the Rust Belt, the high-paying job with good health benefits would go away and be replaced by lower-paying jobs with greatly reduced medical benefits with very high deductibles. One man whose health was failing, killed himself. In another situation, Stephanie Swihart, a young woman with underlying medical problems ignored them because of some untreated mental issues. She died and left her husband, Keith, with a bill of $41,000 for services rendered. While her spouse, Keith, had a good job, he didn’t have good health benefits. That set him on a downward spiral that did not end well.
Phil Ennen started working at the hospital in the mid-1980s and became CEO in 2008 after having been the assistant to the previous CEO, Rusty Brunicardi, for many years. This was a bad time to take over a hospital. The Great Recession was underway with the loss of many good jobs with solid health care benefits. CEO Ennen’s first job was to make deep cuts in budget, which meant laying off many people. Local residents were also becoming unhealthier. Three-quarters were overweight or obese. More people were getting addicted to drugs every day, with meth and opiates being the main culprits. The suicide rate, especially for older white men, was spiking. These problems were not unique to Ohio; they were happening all over the country, although not to the extent that they were in Williams County. All of this put extra stress on the hospital and the CEO.
In early 2018, Phil was notified that the Joint Commission (a national accreditation organization) would be auditing and examining the hospital. These random inspections cause panic among most administrators. The normal course of action is to hire expensive consultants to figure out how to get through the inspections. They got through it with minimal institutional discomfort but it stressed out the management staff.
The next problem was that the hospital was still losing money every year. CEO Ennen once again had to take drastic measures, including cutting benefits which were spiraling upward. At the same time, one of his best administrators was being sexually harassed by a hot-shot contract surgeon who worked part-time at the hospital. The good news was that the surgeon’s procedures brought in a lot of revenue for the hospital. The bad news was that he was a poster boy for the Me-Too movement. Ennen was constantly working to control the doctor and keep all parties working together. It was a tough challenge.
Another point the book makes is that our medical system does not provide mental health services. Many patients’ physical problems were compounded by serious mental health issues which made it difficult to provide effective treatment. Insurance generally did not provide adequate mental health coverage and there was a shortage of providers.
The compensated care fund was state money that would pay for unreimbursed medical costs which was becoming more common every month. The fund was small so over time the hospital had to absorb the free care it had provided, which really hurt the bottom line.
Phil Ennen’s goals were to keep the hospital solvent and independent. His revenue strategy was to add high-paying pieces to the service mix. Sometimes that would work. He’d bring in a specialist whose work would produce net dollars for CHWC. Sometimes it did not work and he’d have to use precious dollars to buy out a bad contract.
CEO Ennen reported to a board of directors. As the financial challenge increased, the board looked to the CEO for ways to cut costs. They wanted to bring in consultants to find ways to trim the budget. The consultants were very expensive and often were not worth the money. Ennen resisted and no consultant was hired. He did another series of cuts, including laying off some major administrators. He got through that OK but some board members were not happy.
Menards is a Home Depot-like chain in the Midwest. Many workers in northwest Ohio who lost jobs when manufacturing plants closed found jobs at Menards. The pay wasn’t bad – more than minimum wage – but the benefits were few. The health insurance was very expensive with high deductibles. The founder and owner of the company was virulently anti-union so workers were not going to be able to bargain for better benefits. Many of the people who came to the CHWC worked at Menards. Only about 25% had insurance so they ended up as charity cases or, if they had qualified, were Medicaid patients which meant that the hospital usually lost money on their care. Because they lacked insurance, most people never went to the doctor, even if they presented symptoms. That meant that when they were sick enough to have to go to the hospital, they often had some advanced disease or poor medical condition which really upped the cost of care. Diabetics were a special problem. There were many of them in the area. Many either could not afford insulin or just didn’t bother to use it. That is very bad for a diabetic and for the hospital that has to provide free care for poor health due to ignoring diabetes.
We met Keith earlier when his wife, Stephanie, died and left him with a $41,000 medical bill. He developed diabetes which he ignored. He eventually lost partial vision which had to be fixed with an expensive operation which wasn’t covered by insurance. He worked at Menard’s so he did not have decent coverage. To make matters worse, he totaled his car in an accident. He had no money so he bought a car from an unscrupulous dealer who charged nothing down but sold the car for many times what it was worth. The dealer had the good sense to install a GPS device in the cars that he sold which made them easier to repossess after the buyer failed to pay the exorbitant monthly note. Keith was having a run of bad luck. One of his best friends at work, Zach, a Marine veteran, shot himself. He seemed happy, but his time in the military might have caused undiagnosed PTSD. Zach didn’t have insurance since he worked at Menards, and there wasn’t a VA hospital within many miles. Other people Keith knew also committed suicide around the same time. The experts couldn’t quite figure out why.
Another problem with medical care was that ambulances had to be paid out-of-pocket, or, in rare cases, by really good insurance policies which very few people had. The owner of the local ambulance company did a lot of free work for people who had to get to the hospital but had no money. It was tough to make a living. Obamacare helped a bit to help him survive, but he never made much money.
As 2019 dawned, upper management at the hospital was in the process of strategic planning, whatever that was. The planning committee had met and come up with an outline that was full of business buzzwords but didn’t say much that wasn’t obvious to all. One problem that several long-time managers brought up was the difficulty in firing a bad employee, including those with persistent drug or alcohol issues. Another problem was the lack of staffing in some departments. These were usually the units that brought in the least revenue but they still needed to have enough people. Not much was actually settled at the last strategic planning meeting, although over the past few months some things had changed at the hospital, including termination policy. As it turned out, a few months after the strategic planning committee had gone on recess, CEO Ennen reported a small net operating surplus - a profit - for the first time in many years. CHWC was still facing mounting challenges, but that was good news.
One problem of all small hospitals was their lack of purchasing power. For example, heart surgery produced high reimbursements but it often involved inserting a stent or two into arteries. CHWC paid three times more to buy a stent than did the big for-profit hospitals in the area. The same was true of drug purchases. Often these increased costs were not passed on to patients - many had little money - so the bills went unpaid - and the hospital's bottom line took a hit. The same thing was true when negotiating insurance reimbursements. The bigger players had the connections and the lawyers needed to negotiate much higher reimbursements than did small players like CHWC.
Bigger hospitals were always trying to acquire smaller ones so CHWC was often the target of take-over attempts. Some of the deals looked attractive, but the board was firm in rejecting all of them. They valued the hospital’s independence and place of importance in the small community. One point the author makes is that there was no practical difference in the behavior of the large for-profit hospital giants and the non-profit ones. They were all sharks looking to swallow smaller fish. The most profitable medical conglomerate in the area was a nonprofit, Parkview, which ran a 16.4% profit margin. That is huge in any business. (Don’t forget that this was pre-COVID. The virus caused most hospitals to eliminate the expensive procedures that made them money. Instead, they were busy treating COVID patients, usually at very low reimbursement rates.)
Joe Brooks was a hard-working carpenter who was hit by what turned out to be a drunk driver on Brooks’ way home from running errands with his 14-year old son. Joe was pronounced dead at the hospital. His family was devastated. The people in the ER took up a collection to buy them a used car since Joe’s had been totaled. The employees of CHWC did that sort of thing a lot.
As always, CEO Ennen was trying to figure out how to keep the hospital open and independent. He kicked around the idea of resigning and eliminating his position ($500,000 a year including benefits), and then having the chief financial officer and the chief operating officer run the place in tandem. That didn’t go anywhere because each of them wanted to be boss, so Phil stayed. In 2018, 14 rural hospitals closed and the number reached 18 in 2019, and that was before COVID put a lot more of them out of business.
Checking back with Keith, in early 2019 was back in the hospital. His diabetes had gotten much worse and part of his leg had to be amputated. Since he worked at Menards he had no insurance coverage so he racked up many thousands of dollars in medical bills. He probably would not be able to work again. He had lost his wife recently and still owed her medical bills. He was 39 years old.
Many stories had happy endings. Marc Tingle, a self-employed handyman, became very ill one night at home. He told his daughter that he felt awful. They went to the hospital and he was having a heart attack. He was operated on immediately and had a stent inserted in a blocked artery. That fixed things. He was back at work a week later. He had some insurance coverage and managed to pay what he owed over time. People at the hospital were uplifted by the fact that they literally saved Marc’s life. That sort of thing is what kept all of them going, including their CEO.
Nurse Janis Sunderhaus established and ran a clinic in Bryan, Ohio. She was what we would call a character. She saw how screwed up medical care was and started a local free-care clinic, Health Partners. She begged, borrowed and stole what she needed to make it work and eventually she secured enough private and public money to make the clinic a real health care resource.
Early in his tenure, President George W. Bush beefed up federal funding for local health centers that would provide care for people who fell through the insurance cracks, of which there were many. Once the US government provided funding, Janis secured federal clinic designation which gave her the funding stream she needed to provide good services. By 2019, Health Partners had a budget of $34 million and served 37,000 people. The hospitals resented Janis because she provided quality care at a fraction of what they charged, but they were stuck with her because she helped so many people. After his foot was amputated, Keith Swihart was still a diabetic who needed insulin that he could not afford. He heard about Health Partners and they provided him with affordable insulin as well as the follow-up care that he needed for his illness.
Ennen had to continually deal with was the allegation of sexual harassment by the contract surgeon against Dr. Kim Owen, the head of the oncology department. She had gone to Ennen and reported that the harasser’s behavior had not improved despite several interventions. The doctor in question was bringing in millions of dollars to the hospital so Ennen kept trying to work things out between the doctors. Sometimes it looked like it was working. It wasn’t.
Dr. Owen had had it with the harasser. The board brought up the issue at its regular meeting and determined that CEO Ennen had not handled the situation well. He was suspended and made to leave the hospital. Realistically, he had been fired. He never went back to work. He ended up resigning in order to get a severance package for his 32 years of work.
It’s not clear what more Ennen could have done. He kept putting out the fires, but the harassing doctor kept reverting to form. The harassed person, Dr. Owen, understood that working things out with the obnoxious doctor was the preferred outcome. In hindsight, Ennen should have fired the bad doc but that’s not easy given the rights that employees have.
The board brought in lawyers, which cut off the possibility of informal negotiations and settlement. Once the lawyers came in, Ennen was gone. He was especially disappointed that he had no chance to explain to the board why he took the actions he took with the harassment charges. The board - actually their law firm - just bounced him. After having worked for the hospital for 32 years, he was the face and essence of the hospital. He expected better treatment. Ennen’s suspension rocked the hospital and the community. Something fragile and special had been shattered.
For decades as CEO, Phil Ennen worked to find ways to generate enough revenue to fulfill the mission of the hospital. Sometimes he irritated some of the board members, especially when he had to lay off popular employees or trim some benefits to better the bottom line. Some of the board members resented how he was not enthusiastic about the constant strategic planning efforts. The sexual harassment problems were the tipping point that caused enough votes to shift on the board to suspend him.
Ennen had technically violated policy by not sending the harassment claims to the human resources department. The person who ran HR didn’t want it – she thought that Phil Ennen had a much better chance of getting a good outcome than she did. But he was wrong so they fired him. The author makes the point that firing Ennen for a technical violation was like arresting an Indy 500 driver for speeding. Everyone knew that the only way to keep the hospital operating was to sometimes work around policy. As one of his co-workers said about Phil, “He spent his whole life threading needles. He thought that if he could thread this one right, he could fix it.”
When Phil Ennen was fired in 2019 the area was in the middle of a drug epidemic. Opiates and meth were the substances of choice. Many children were being born addicted. The poverty rate was steadily increasing despite the fact that there was technically full employment. This was an anti-government county, but without generous federal stipends, people would have been a lot more miserable. Marc Tingle, the man who survived a near-fatal heart attack because of the hospital’s superb emergency treatment, was virulently anti-government, as were his neighbors. Of course, he missed the irony that he relied on federal and state funding to pick up the bills for virtually all of his medical care.
The author devotes many pages to describing some of the typical families that local social workers visited. They were a mess. Even when there were two parents with one working two jobs – which was not usually the case – they couldn't make enough money to get by. Diabetes and obesity were rampant. The local ambulance company had to spend thousands of dollars to buy equipment to extract extremely obese people from car wrecks since they were too heavy to be lifted by humans. Academics had come up with a phrase to describe a worsening public health situation – “social determinants of health” – which documented the connection between low income, weak community roots, obesity, and other bad things to more people who needed medical care. Every year, fewer people had health insurance. Williams County, Ohio, the home of CHWC, was Ground Zero for this phenomenon.
Near the end of the book, the author revisits Keith Swihart who you may recall had severe diabetes which led to a foot amputation and his gradually going blind. His kidneys were in rough shape. He had to have his gallbladder removed. He kept getting worse, with most of his troubles being due to his not being able to afford insulin when he was first diagnosed as a diabetic. Had he had access to the drug, he would have probably been relatively healthy now. He was not.
Chad Tinkel, who had been the hospital’s chief financial officer, replaced Phil Ennen as CEO. He was delighted to be in charge and he was a good choice since he was a native of Bryan, Ohio, and a long-time employee of CHWC. The former CEO had left the hospital in good financial shape in the spring of 2019. The first few months went well, but soon some of CEO Tinkel’s key managers left for other jobs. Some left for more money but some were not happy with Tinkel’s accountant-type leadership style as compared to Ennen’s more expensive and empathetic leadership. The opening of a new cancer treatment center was delayed. Other big hospitals started to market heavily in Williams County. These were all challenges, but they could be dealt with. Then COVID hit.
Author Alexander points out that COVID-19, which hit us in early 2020, “exploited the weaknesses (of our medical care “system”) until the crust collapsed, revealing to Americans what had become of their nation.” That the federal government had slashed funding for emergency health responses by 40% over 15 years didn’t help. The author goes off on a political diatribe about how increasing income and wealth inequality and removing employee job protections exacerbated the public health challenge. He does have a point. For decades, real income had remained flat or declining for many Americans. That group helped put Donald Trump in the White House, so there was something real going on.
In late March of 2020, CHWC stopped elective surgery and doubled its bed capacity so it could handle more COVID patients. The hospital lost about $10 million over the next six months but federal emergency funding eventually came in to take care of the losses. Once things got sort of back to normal, CHWC set a record for elective surgery, which paid well. Unlike many small, rural facilities, the hospital survived the virus. Big hospital chains got most of the COVID relief money which left less for the small ones.
The book ends in late summer of 2020, just when COVID was supposed to be over. It wasn’t over, but CHWC did well. Today it is in good financial shape and has kept from being gobbled up by a corporate hospital chain. What isn't in good shape is the quality and availability of medical care in the United States. We survived COVID but we have a lot of work to do to give people health care proactively before they get really sick and permanently damaged. Paying for Keith Swihart’s insulin as soon as he was diagnosed would have saved hundreds of thousands of dollars in medical costs and would have made his life a lot better.
Bob’s Take
Interesting politics. 69% of the people in Williams County, where the hospital was located, voted for Trump, yet the county had very high Medicaid participation rates (federal entitlement), and many people, including most who had jobs, were on food stamps. They needed a government that favored public benefits which wasn't what the guy they voted for embraced.
I’ll get that checked tomorrow. Delaying treatment was a normal response to having poor or no health insurance or having an unaffordable deductible. When you have to buy food and pay bills, it's easy to put off seeing a doctor about the pain you’ve had in your chest for weeks.
The hollowing out of America. Hillbilly Elegy is a 2016 chronicle of growing up poor and surrounded by despair in rural Ohio. J. D. Vance, the Republican nominee for US Senate in Ohio, wrote it and became famous. He talks about the grinding negative impacts of seeing good jobs go away and not be replaced. Once-prosperous communities lost traditional manufacturing jobs which were often replaced by service-economy jobs which paid less and provided fewer benefits. This causes problems - depression, addiction, obesity, diabetes, despair. The Hospital frames that hopelessness in a medical perspective. Not having insurance or enough money to seek medical help can quickly compound the misery.
Working more for less. Many of the people described in the book had two and sometimes three low-paying, non-benefited jobs. The minimum wage in Ohio was $8.35 which was really low. Even when you tried hard, you were frustrated. Menards, a major employer in the region, received millions of dollars in state subsidies and infrastructure support yet was a lousy employer.
The American Dream had moved on. People in the book couldn’t afford child care or medical care or food and couldn’t find work at decent wages. Drugs and addiction were a big problem for many. A social worker in the book notes that many of her clients have trauma as an underlying issue. Being constantly beaten down by life can cause trauma as certainly as does being beaten physically or abused verbally. Several people in the book had voted for Obama in 2008 and 2012 and for Trump in 2016.
The malaise was generational. The kids of the workers who lost good jobs in the 1980s and 1990s were now unable to find good work and had no hope of living a good, productive life.
Mergers and acquisitions. Big hospitals gobbled up small hospitals. That caused medical costs to increase as care became more corporate and revenue driven. The major regional hospital also became big-league real estate developers. They built mega-developments which made them a lot of money. How this helped them provide quality, affordable medical care is unclear.
The whole book is pretty depressing. Author Alexander noted that the US has no public health system, as our poor response to COVID proved. He went on, “What America did have was a jumble of ill-fitting building blocks: the doctoring industry, the hospital industry, the insurance industry, the drug industry, the device industry. They’d all been able to tweak and sand the corners of proposed ‘solutions’ to benefit themselves.” There also was a health care reform industry which had created its own reality and made lots of people lots of money.
