October 27, 2023

The Weekly Gist: The Snakes Alive Edition

by Chas Roades and Lisa Bielamowicz MD

Longtime readers of the Weekly Gist will know where our baseball loyalties lie (natural-born Astros fan, adoptive Dodgers fan), so it will come as no surprise that we likely won’t be tuning in for this year’s Fall Classic. But we are compelled by one subplot from the D-Backs journey: those “Snakes Alive” signs. In case you aren’t aware, Jeff Guzzardo, a 72-year-old fan from Chandler, AZ, showed up to game 3 of the NLCS with an 8 1/2” x 11” piece of paper, on which he had printed the words “Snakes Alive” in modest Helvetica font. An unassuming, almost miniscule effort to boost his team—until the broadcast cameras zeroed in on him during the game. To say that his slogan caught fire would be an understatement. By the next game, the team’s marketing department had printed thousands of replicas of the signs, along with t-shirts and other regalia. You’ll be hearing that phrase a lot over the coming week, as Arizona’s underdogs battle for the crown. You just gotta love seeing the impact a modest PowerPoint slide can have!


What happened in healthcare this week—and what we think about it.

  1. California passes law raising healthcare worker hourly minimum wage to $25. Earlier this month, Governor Gavin Newsom signed a bill that puts all full- and part-time California healthcare workers, including all ancillary support staff, on a path to earning $25 per hour. While wage increases will begin phasing in next year, the timeline for implementation depends on facility type and other factors like payer mix. Large health systems and dialysis centers have until 2026 to fully implement the new wage, while rural, independent hospitals and those with high public payer mixes, as well as other clinical facilities, have more time to comply. The law, which replaces the $15.50 state minimum wage for all workers, is projected to impact over 469K healthcare workers in the state, potentially including 50K who already earn more than $25 per hour but are forecasted to receive wage increases to maintain their pay premiums. Strongly backed by California healthcare unions, the law ultimately received the support of the California Hospital Association on the grounds that it will “create stability and predictability for hospitals” by preempting local wage and compensation measures active in many California cities.

The Gist: On the heels of a tentatively successful labor negotiation with Kaiser Permanente—which would raise the system’s hourly minimum wage to $25—California healthcare unions have flexed their might for another win. While this new law directly benefits healthcare workers earning less than $25 an hour, its knock-on effects will extend to those earning above that to avoid pay compression, as well as to workers in other industries that draw from the same labor pool. The mandated higher pay may provide California healthcare employers with a recruitment edge (and lure talent away from neighboring states), but higher costs will exacerbate the margin challenges plaguing many hospitals in the state.

  1. Employed physicians at Allina Health vote to unionize. Around 400 primary and urgent care physicians, along with 150 nurse practitioners and physician assistants, employed by Minneapolis, MN-based Allina Health System have voted to unionize with the Service Employees International Union, forming the largest private-sector union of physicians in the country. Allina, which operates 12 hospitals across Minnesota and Wisconsin, already saw over 100 inpatient physicians at its Mercy Hospital vote to unionize earlier this year. While Mercy’s physicians organized against pressure to adhere to the hospital’s new length-of-stay guidelines, this larger group of clinic-based providers say they are motivated by chronic understaffing that they claim has caused burnout and threatened patient safety. Allina Health laid off 350 workers this summer after posting a nearly $200M operating loss in 2022.

The Gist: When health systems originally recruited physicians into their newly developed employed medical groups, many pitched the arrangement as more of a partnership than traditional employment. However, now that a majority of the nation’s physicians are employed by hospitals, some physicians are rethinking their relationships with their employers. Only six percent of doctors were unionized in 2021, but a recent spate of unionization efforts by residents and physicians suggest that number is on the rise. Health systems hoping to address physicians’ concerns and unionization activity should note that the motivating factors cited by organizing physicians surround working conditions, including a lack of support staff and professional autonomy, rather than personal wage demands.

  1. Walmart expands doula benefit to employees nationwide. This week, the nation’s largest private employer announced that it will begin offering its covered employees up to $1,000 per pregnancy to pay for the services of a doula, a person trained to assist pregnant people during the birthing process. Walmart, which offers eligible new parents up to 22 weeks of paid time off, first piloted this benefit in 2021 for its employees in Georgia, and expanded it to three more states last year. It joins CVS Health and Microsoft as major companies that offer full or partial doula coverage. Several states include doula services in their Medicaid programs, and Rhode Island became the first state to require doula coverage in all private insurance plans last year.

The Gist: While commercial insurance coverage for doula services remains rare, a growing number of large employers and state governments are turning to doula coverage as a means to both lower healthcare costs and improve outcomes. Doulas, whose services typically cost between $500 and $2,000, have been shown to reduce the need for C-sections and other medical interventions by 50 percent or more. They can also reduce mortality and racial disparities, in particular for black women, who are almost three times likelier to die of pregnancy-related conditions than white women. In addition to covering this proven service, employers and states looking to protect the health of new mothers could also guarantee paid maternity leave, which the US is unique in not mandating.

Pluswhat we’ve been reading.

  1. Apple Watch shows promise in tracking Parkinson’s symptoms. Published this week in Stat, this piece discusses the potential demonstrated by the Apple Watch’s symptom tracking programs for Parkinson’s disease, a neurogenerative disorder that afflicts at least 500K Americans with no known cause or cure. After a decade of development, three Apple Watch apps that record and summarize the effects of the disease for its wearers have received Food and Drug Administration approval. Independent developers interested in Parkinson’s research were drawn to wearables because they can measure manifestations of the disease, including tremors and involuntary movements (a side effect of medication). In addition to streamlining symptom tracking for patients, these apps give providers and researchers a new source of daily data for assessing disease progression and treatment efficacy, while bridging the gap for patients with limited access to specialists.

The Gist: While the proliferation of wearable devices that track biometric data has yet to make a meaningful impact on general health outcomes, wearables may have a clearer utility for specific diseases like Parkinson’s and atrial fibrillation that benefit from constant, passive patient monitoring. The next step for wearables like the Apple Watch will be proving that improved detection and symptom tracking can translate into measurable health improvements.


A key insight or teaching point from our work with clients, illustrated in infographic form.

Increased expenses, especially labor, impacting hospital margins 

Workforce shortages, supply chain disruptions, expensive new drugs, and high inflation have all greatly increased hospitals’ expenses. These rising costs are the top cause of the tenuous state of hospital margins today. As shown in the graphic below, all major hospital operating expense categories have increased by at least 20 percent in 2023 as compared to 2020 spending levels. While some expense trends are tied to the greater economy and could fall as inflation abateshigher labor costs are more likely to persist due to the wage hikes hospitals implemented to recruit and retain workers during COVID—essentially rebasing the cost of talent. As labor typically comprises over 50 percent of a hospital’s expenses, even a small percent increase can have a disproportionate impact on operating margins, compared to other expenses. Importantly, this increased cost of care delivery has not been met with higher reimbursements from payers, and hospital expenses have grown more than twice as fast as inpatient Medicare reimbursement between 2019 and 2022. 


A recommendation from our weekly diet of music, movies, TV, and other good stuff.

Lahai by Sampha—Second studio release from this London-based artist better known for featuring on others’ tracks (Kendrick Lamar, Frank Ocean, Solange) than for his own solo work. This new album should help correct that: it’s a gorgeously spiritual, almost ethereal, collection that makes the most of his unique vocal abilities. Headphone music for quiet contemplation.


What we learned this week from our work in the real world.

Getting serious about providing community benefit

How should health systems spend their “community benefit” dollars? That question was at the heart of a discussion we participated in recently at a member board meeting. To maintain their nonprofit status, all health systems are required to devote a portion of their earnings to activities that benefit the communities they serve, based on an assessment of local health needs. The question our member’s board was grappling with, led by the system’s executive team, was how to ensure their “investment” in the community is as leveraged as possible, and generates the greatest “bang for the buck” in terms of better community health. As the importance of addressing the social determinants of health grows, many systems are trying to target their resources toward activities that that enhance their ability to improve health status, and to reduce the barriers to better health faced by many. That requires a level of rigor and commitment to “community ROI” that goes beyond simply pointing to charity care statistics and the number of uninsured served. What most impressed us in the discussion was the application of the same investment mindset to community benefit that the system brings to capital allocation decisions—with due attention to implementation plans, outcomes metrics, and accountability. As the system’s COO framed it, “We don’t just want to be a ‘piggy bank’ for charitable causes, we want to make sure our investment in the community is really making a difference” in local residents’ health. At the same time, the board recognized that its role extends beyond simply contributing dollars to acting as a convener and facilitator of other community organizations working together toward a common set of goals. A worthy discussion for the board, for sure, and a priority we’re seeing leading systems begin to embrace in a serious way.


All the headlines in healthcare policy, business, and more, in ten minutes or less every weekday morning.

Last Monday, JC spoke with Matthew Fiedler of the Brookings Institution about proposed Congressional legislation that aims to further regulate pharmacy benefit managers (PBMs). Recent analysis from Brookings finds that these bills may only have a small impact on PBMs, or even have the opposite effect of their intended goals.

This Monday, we’ll hear JC’s conversation with Sachin Jain, MD, CEO of SCAN Health Plan, a nonprofit provider of Medicare Advantage (MA) plans based in Long Beach, CA. They spoke earlier this month at the HLTH conference about SCAN’s proposed merger with Care Oregon, and growing tension between providers and MA plans.

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That’s all for now. Here’s wishing you a Happy Halloween with lots of treats and not too many tricks! We’d love to hear from you—send us your spooky suggestions and frightening feedback, and don’t forget to scare your friends and colleagues into subscribing to the Weekly Gist!

As always, please let us know if we can be of assistance in your work. You’re making healthcare better—we want to help!

Best regards,

Chas Roades
Co-President and Managing Director

Lisa Bielamowicz, MD
Co-President and Managing Director