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February 23, 2017

Swedish CEO steps down after newspaper report about neurosurgery practices

Daily Briefing

    Anthony Armada, CEO of Seattle-based Swedish Health Services, has resigned following a Seattle Times investigation that raised questions about quality and compensation practices at the five-hospital system's neurosurgery institute.  

     According to the Times, the investigation was based on more than 100 interviews, thousands of pages of records, and a review of government databases containing millions of records.

    Times investigation

    In the investigation, the Times reported that certain leaders at Swedish sought to increase volume and revenue at Swedish-Cherry Hill's Swedish Neuroscience Institute (SNI) in ways that ultimately decreased quality. Specifically, according to Modern Healthcare, the investigation "accused Swedish of giving physicians incentives to increase patient volume and to use complicated techniques during surgery that were sometimes unnecessary," which the Times said overburdened medical staff and jeopardized patient safety.

    The Times reported that many of the problems arose under the leadership of Johnny Delashaw, who became the leader of SNI in 2015 over concerns from other physicians at the institute.

    Swedish originally recruited Delashaw in 2013, during which time he was facing an internal investigation at his prior job in California over high complication rates. Under Delashaw's leadership, SNI experienced excessive caseloads, an increase in concurrent surgeries, and a preference for more complex and expensive procedures than were medically necessary, the Times reported.

    SNI's net operating revenue increased 39 percent between 2012 and 2015. But the Times found Cherry Hill ranked below national averages in three quality measures tracked by the federal government in 2015: blood clots, collapsed lungs, and severe surgical complications. According to the Times, only one other hospital in Washington state was behind on three national benchmarks.

    In a statement in response to the Times investigation, Delashaw defended his approach. "While I expect excellence and unswerving commitment to our goals I am not a bully and have not produced an intimidating atmosphere," he said. Delashaw added that he thought some of the critiques were motivated by jealousy.

    After reviewing the allegations, the Washington Department of Health said it was launching a new investigation into the Cherry Hill hospital's practices, the Times reports. At the time of the original investigation, the Times reported that Delashaw remained in his position as the leader of SNI.

    Swedish's response

    Armada addressed some of the issues raised in the Times story in an open letter last week, before his resignation. Swedish had been "humbled and saddened as we have seen that commitment to our patients and our community questioned," he wrote. "We recognize that there is a loss of trust, and appreciate your patience and partnership as we work to repair that trust through as much transparency as possible."

    Armada also acknowledged that the system had "failed" Talia Goldenberg, a patient profiled in the Times investigation who died from complications following a spinal surgery performed by Delashaw. Armada stressed that the system had taken steps to improve care following the incident and emphasized "patient safety and quality are our first priority."

    R. Guy Hudson, chief of physician services for the system's Western Washington region, will serve as interim CEO following Armada's departure. Swedish Board of Trustees Chair Teresa Bigelow said, "We believe this is an important time to return to physician leadership." She added, "[Hudson's] immediate next steps will be to strengthen relationships with our medical staff, as well as our caregivers and the community" (Rubenfire, Modern Healthcare, 2/21; Baker, Seattle Times, 2/21; Baker/Mayo, Seattle Times, 2/10; Armada, open letter, 2/17).

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