Kansas City

Profiles in cancer research

Kansas City Business Journal, Writing

Originally published in the Kansas City Business Journal, June 23, 2017
Danny Welch | Farzad Alemi | Jaszianne Tolbert | Janakiraman Subramanian

Though this was a relatively simple exercise; writing profiles of local cancer researchers, this was one of my favorite projects for the Kansas City Business Journal.

Each researcher I spoke with had a different perspective on their work. One of them, a pediatric-hematologist with Children’s Mercy, had recently completed her residency and was looking to help find the optimal dose of a cancer-preventing drug for her young patients. Another, a well known researcher, discovered six metastatic cancer suppressors. He embarked on this work after his mother died of metastatic breast cancer.

Not only did this project show me the sheer breadth of work within cancer research, but it also was a chance to learn about the deeply personal motivations each individual brings.

The future of Sprint’s headquarters

Kansas City Business Journal, Writing

Shortly after Sprint announced it would attempt to merge with T-Mobile, the company took on an odd project: redesigning its headquarters. The telecommunications giant brought in WeWork to bring a more modern look to its $920 million campus in Kansas.

Soon after becoming CEO in May, Michel Combes announced that Sprint Corp. would embark on a redesign of its headquarters campus.

Sprint’s renovation project will amount to much more than window dressing. WeWork, the coworking innovator and budding designer of corporate spaces, will take a lead in transforming an imposing brick campus into space that’s attractive to top talent.

Fixing up the campus may seem an odd distraction for a company pursuing a $26.5 billion merger with T-Mobile US Inc. — a transaction that would relegate Overland Park to the new company’s “second headquarters.” But it’s actually an important move that positions the wireless carrier for the future, whether that involves finding its place as part of a larger company or fighting for market share as a standalone carrier, should regulators block the merger.

“The campus is 20 years old now; it needs to be updated,” said Tim Schaffer, president of AREA Real Estate Advisors. “Partnering with (WeWork) is not only going to give the organization a hand up in the way their people want to interact and work, but also make the space they don’t need marketable to a greater number of companies.”

The redesign went beyond pure aesthetics. It also poised Sprint to sell its 200-acre headquarters in Kansas, which it closed nearly a year later in March of 2019. While this article was written before the sale, I was able to foreshadow what such a massive deal would mean for Overland Park’s real estate market — and Sprint’s workforce.

WeWork’s influence

Combes’ charge as CEO is to keep Sprint pushing toward the future — whatever that holds. He broached the topic of a headquarters renovation during an event meant to rally the company’s employees to press on.

“We’ll make it well-suited to keep and attract new talent for the company,” Combes said of the campus. “It’s an absolute priority to invest in you and the campus, and it’s key to change the way we work.”

Although WeWork is known for its trendy shared office spaces, it has begun designing headquarters and satellite offices for larger corporations. The New York-based company struck a deal with Microsoft Corp. to give the tech company’s employees access to WeWork coworking spaces. Facebook Inc. is among another group of companies that have called upon WeWork to create office spaces solely for its employees.

Mass Appeal’s offices in New York were WeWork’s first custom build. The eclectic, colorful space includes nods to the media and entertainment company’s roots in hip hop and as a graffiti magazine. The office combines a mix of desks, tables and plush couches, as well as a recording studio for Mass Appeal’s artists. It also features custom artwork, including a large mural depicting the first year Mass Appeal magazine was published.

WeWork spokeswoman Alyssa Botts said in an email that enterprise members — companies with more than 1,000 employees — now make up a quarter of WeWork’s membership base. Enterprise members also are WeWork’s fastest-growing business segment, up 370 percent last year from 2016. Among its enterprise members are big names in the tech and financial sector, such as IBM, Standard Chartered, GE, Salesforce and Liberty Mutual.

In addition to the campus renovation, WeWork and Sprint have one other common connection: SoftBank Group Corp., which has a nearly 85 percent stake in Sprint, invested $4.4 billion in WeWork last year.

Sprint Executive Chairman Marcelo Claure tweeted that collaborating with WeWork on a headquarters renovation was a “testament of our commitment to the (Kansas City) region and the power of the SoftBank ecosystem.”

Changes on campus

Sprint’s $920 million Overland Park campus was a game-changer in the market when it opened. With 17 brick office buildings linked by sidewalks and green spaces and surrounded by parking garages, it spoke to a company preparing for strong growth.

But times have changed. The campus was built to accommodate 14,000 employees, yet Sprint employs about 6,000 locally today. Of the roughly 4 million square feet of space on the campus, about 1 million square feet are leased to outside companies, according to CBRE, with an additional 332,938 square feet available for rent.

Giving a more modern, open-office design to the campus will give Sprint an opportunity to suit its present needs, as well as provide options for the future.

“Certainly, Sprint will be able to consolidate within their campus because of the type of space they’re going to,” said Greg Swetnam, principal and director of office brokerage at Kessinger/Hunter & Co. LC. “They’re tearing the wall down and pushing it in a little tighter to make it more inviting and more appealing.”

It’s also possible that WeWork could open a dedicated coworking space on the Sprint campus. Although neither company has confirmed plans, Combes’ comments indicated that the idea was at least on the table.

“When you want to own 5G (the next generation of wireless technology), when you want to own digital, when you want to own artificial intelligence, we need to have small startups around us,” Combes said. “I want some of those startups to come to the campus and to help us to develop the company.”

More companies are seeking flexibility in how they use their offices, said Matt Druten, co-founder of Edison Spaces, an Overland Park-based provider of what it calls collaborative office space. In particular, the lack of a long-term lease appeals to small and midsize companies.

“You can increase the size of your team into a larger office or smaller office overnight,” Druten said. “You can go from a three-person office to a 12-person office to an eight-person office, which happens to most small companies.”

Kansas City has shown an appetite for coworking spaces. At WeWork, Plexpod, Edison Spaces and others, they’re being filled almost as quickly as they’re being developed.

“Take the WeWork concept, and plug it into the Sprint campus. You can see the potential success they would have at the Sprint campus if they choose to do that there,” AREA Real Estate Advisors’ Schaffer said.

Ripple effect

Whatever Sprint does with its office space, the broader real estate market will feel it.

“You can’t talk about the South Johnson County office market without talking about Sprint,” Swetnam said. “The Sprint campus is a huge facility. … In a secondary or tertiary market like Kansas City, it just pulls all of the air out of the room.”

Since Sprint began offering swaths of space for lease, speculative office development has slowed to a crawl. Swetnam said the Kansas City office market also hasn’t seen any significant rent growth for the past seven or eight years. 

Sprint’s campus is ideal for large tenants, with ample parking and amenities such as gyms and cafeterias. However, the lack of visibility might not suit some tenants, such as law or accounting firms.

“It’s a wonderful facility. It makes a ton of sense for a corporate headquarters,” Swetnam said. “But like a lot of other corporate headquarters, it gets built a certain way.”

If Sprint puts large chunks of new space on the market, it could continue to mute demand for new single-tenant office buildings in Johnson County. If it offers more smaller spaces, the campus could become a bigger competitor to multitenant spaces in the market, Schaffer said. That market has single-digit vacancy rates.

“It is a game-changer for South Johnson County,” Schaffer said. “What WeWork provides is the opportunity for different-sized tenants. … It could potentially be really disruptive.”

Originally published in the Kansas City Business Journal, July 20, 2018.

Shopping for health care is a real pain

Kansas City Business Journal, Writing

Molly Moffett was shocked when her bill arrived in the mail. After months of screenings and physical therapy required by insurance for a herniated disc, she finally got in to a specialist for a steroid injection.

Moffett’s doctor was in her insurance network. But unknown to her, the facility where the procedure was scheduled wasn’t. That cost her an extra $3,000.

“It took several months of me being in a lot of pain until I could get what I needed,” Moffett said. “I think everyone struggles with these things. I always tell people, just ask as many questions as possible.”

Moffett is no ordinary health care consumer. As a project coordinator at the Community Health Council of Wyandotte County, she spends most of her time helping people get access to insurance and understand how to use it.

“I think the fact that our health care system is so complicated creates unnecessary barriers for a lot of people, whether you’re low income or high income,” Moffett said. “It’s frustrating because it feels like people are giving you different answers and you have to go through all of these different steps.”

With more companies offering consumer-directed health plans and provider networks referring to patients as consumers, the onus increasingly falls on patients to advocate for themselves. But it’s difficult to be a savvy consumer in the face of arcane health care systems and little to no information necessary to compare outcomes and costs.

Dizzying information

Trying to compare costs of procedures at various hospitals demonstrates that even what are billed as transparency efforts fail to present a clear picture.

The Missouri Hospital Association’s Focus on Hospitals database includes 2016-2017 prices for procedures from hospitals’ “chargemaster,” a list of billable services. The database shows that the median charge for heart catheterization for a condition other than a heart attack, without complications, is $25,831 at Mosaic Life Care in St. Joseph and $51,547 at Shawnee Mission Medical Center. But the MHA site notes that “most health care consumers will never pay these rates.”

Now, try to compare that with information from the Centers for Medicare & Medicaid Services. The 2015 list price for a catheter-based coronary bypass ranges from $89,000 at Mosaic to more than $216,000 at Shawnee Mission Medical Center.

The amount Medicare pays for the procedure is more consistent, ranging from $21,000 to $32,000.

A comparison of inpatient hospital costs for pneumonia without complications shows a wide range of listed charges between hospitals in the same metro area. Of course, most insured patients would never pay the listed price.

Some differences result from how hospitals bundle services. Charges for a procedure may roll up the cost of the surgeon, anesthesiologist, lab work and facility fees.

Insurance companies negotiate rates with providers, perhaps to 30 percent or less of list price. But negotiated rates are carefully guarded trade secrets.

Mash it together, and patients are left with price information that “few mortals can decipher,” said John Leifer, a Leawood-based health care consultant.

“We have been talking about price and quality transparency for 25 years, at least,” Leifer said. “The prices that are quoted in health care are so far from reality. There are so many impediments to getting that true pricing. It’s a Herculean task for any company to try and overcome this barrier.”

Even with more information, it would be tough for consumers to make important decisions. For example, Leifer said, if your father is going in for heart surgery and you have a choice between a hospital that charges $75,000 with a 1 percent mortality rate and another that charges $40,000 with a 3 percent mortality rate, what do you do?

“We need really good data, and we probably need to have it interpreted,” he said. “Consumers are neither discerning nor demanding when it comes to making smart health care purchases.”

Attacking the problem

Companies are working to help get more actionable data to companies and consumers.

Matt Condon’s Bardavon Health Innovations is working to gather information for all facets of workers’ compensation care. Spending on musculoskeletal injuries in the U.S. is higher than for cancer, he said, totaling about $35 billion in medical costs and an additional $35 billion in indemnity.

“Employers actually want a better provider who’s getting a better outcome. They’re financially incented to do so,” Condon said. “Knowing which doctors are most likely to heal patients is the holy grail we’re trying to get to.”

Although workers’ compensation care is a unique area, Condon said he hopes the idea of actionable data driving decisions can be expanded to the larger health care space.

Kansas City-based Health Outcomes Sciences Inc. uses predictive analytics to provide risk models for individual patients before certain procedures. This information could allow low-risk heart patients to avoid wasting time and money on unnecessary treatments, while seeing that high-risk patients are treated appropriately.

Kansas City startup iShare Medical LLC helps patients view and share their health records securely.

Condon said startups are best positioned to disrupt the status quo, where doctors and patients alike have spent decades battling the same problems of misaligned incentives, lack of transparency and inadequate information.

“Our system has historically tried to do the same things,” he said. “We’ve got to be irreverent about almost every single aspect of the status quo.”

Learning to navigate

Navigators and advisers can help patients figure out their needs and even do some of the legwork of getting care.

Moffett helps patients navigate insurance plans offered through Affordable Care Act exchanges. That includes helping people — many of whom are getting insurance for the first time — understand jargon, network limitations and deductibles.

“I think insurance companies are trying to do a better job, but it really comes down to whether patients are asking the right questions,” she said. “I have seen people afraid to use their insurance even though they know they need it. The process to get there can be disheartening.”

HCA Midwest, the area’s largest hospital system, began putting nurse navigators in its hospitals three years ago to help cancer patients get information on procedures and schedule doctor appointments. It has expanded the program to cardiovascular, gastrointestinal and perinatal patients.

“It’s taking some of the pressure off the physicians and their office staff,” said Brent Pike, regional access director. “I think that’s helped patients a lot because they know they have someone they can call.”

Dr. Darryl Nelson, HCA Midwest’s chief medical officer, is working with the system’s physicians to focus on patients’ needs instead of what works best for the care provider.

He became attuned to the problem some years ago at his family medicine practice in Lee’s Summit.

“It was prompted by a walk by the front desk, where I saw my poor dear staff person just red in the face and distraught,” Nelson said. “She was trying to explain to a patient it was going to be weeks before they could be seen.”

Originally published in the Kansas City Business Journal, March 9, 2018

Hospitals think small

Kansas City Business Journal, Writing

Originally published in the Kansas City Business Journal, March 9, 2017

A rash of proposals for scaled-down emergency rooms went before cities for approval in the suburbs of Kansas City. At first, the operator remained a mystery, but I later confirmed that it was Saint Luke’s Health System, one of the main hospital systems in town.

Though the hospitals provided more extensive services than a freestanding emergency room, they were still limited in the types of cases they could handle. They were announced as a quick, convenient way for people in the community to receive emergency services. But despite their small size, they’re still billed the same as any emergency room.

Why were so many hospital systems turning to this method? For one, microhospitals are cheaper to build, at around $7 million to $30 million each. They also serve as a quick way for health systems to build a presence in growing neighborhoods, giving them a strategic advantage over their competitors.

Manifest Destiny

Kansas City Business Journal, Writing

The University of Kansas Health System purchased several health systems in a two-year period. It started with Hays Med, a 207-bed hospital that serves as an important hub for the surrounding communities in Western Kansas.

Later in 2017, KU Health System purchased St. Francis Health, a 378-bed hospital in Topeka. Unlike Hays Med, St. Francis Health had been struggling financially, and faced closure. KU Health System acquired the hospital jointly with for-profit operator Ardent Health Services.

While it was undergoing this westward expansion, KU Health System was still fighting for market share in Kansas City. In addition to breaking down this strategy, I also scooped the competition on news of an internal reorganization of its top leadership.

For CEO Bob Page, proof of The University of Kansas Health System’s growth is as close as his office window. Outside, its new 124-bed inpatient tower, emblazoned with the system’s logo, rises above the surrounding neighborhood.

Of course, there’s further proof throughout the metro area: the Indian Creek Campus that expanded this summer in Overland Park, a mental health inpatient facility in Wyandotte County and billboards promoting it as the official health care provider for the Kansas City Chiefs and Kansas City Royals.

But KU Health System has been reseeding its approach to growth. As it battles other large health systems for market share in the metro area, it also is plowing new ground across Central and Western Kansas. It’s in the rural parts of the state that cash-strapped community hospitals struggle and some patients drive long distances for care.

In the past two years, KU Health System has snapped up hospitals in Hays, Great Bend, Topeka and Larned. The strategy has its risks, but Page expects it will let the system bring academic medicine to other communities in Kansas, plus attract patients from those areas when they need more complex care.

This westward expansion has caught the eye of many, from inquisitive physicians to hospitals seeking help.

“People are really curious about what we’re doing,” Page said. “We’re not trying to take over the entire state of Kansas.”

Strategy or philanthropy?

Health care is a growing industry nationally, but the picture is very different in rural areas. Rural hospitals face aging and shrinking populations, declining reimbursement rates and patients leaving their home areas for care.

In Kansas, 69 percent of rural hospitals had negative margins, said Cindy Samuelson, vice president of public relations for the Kansas Hospital Association. Statewide, 76 counties lost population last year. In some of those communities, nearly a third of patients are older than 65. And in 64 counties, at least half of patients travel to another location for care.

“Many times, they’re going to another, bigger facility for a procedure,” Samuelson said. “Follow-up care can be done in the community, but oftentimes they’ll come back. They end up getting that care in the urban area or another area.”

In its 2018 outlook, Moody’s Investors Service predicted that “mergers, acquisitions and strategic alliances will continue at a rapid pace,” especially for rural or community hospitals.

Large hospital systems and high-acuity academic medical centers continue to perform well, in part due to their scale and brand recognition, Moody’s wrote. But small hospitals still face a number of difficulties, including lower reimbursement rates and a shift to outpatient care.

“Rural hospitals are struggling and are likely to be increasingly acquired by major systems in nearby urban hubs,” the note concluded.

That’s where KU Health System comes in. It can benefit by opening a pipeline to attract the sickest patients, instead of them traveling to other counties, or states, for care. It also can offer resources and leverage for reimbursement to rural hospitals, while allowing more patients to get follow-up care in their hometowns.

“It’s a way of planting a flag in those rural communities with the idea that you will ultimately pull a lot of the larger or more complex procedures back to the main campus,” said Blane Markley, a health care attorney at Spencer Fane LLP. “Transplants, complex surgeries and strokes, those types of procedures come back to Rainbow Boulevard.”

He noted that not every hospital KU Health System has acquired has been in financial distress. So operating those hospitals doesn’t necessarily come with a hit to the system’s income statement.

There’s another potential benefit for hospitals to align with KU Health System. Tammy Peterman, COO and chief nursing officer for KU Health System, said ties to their alma mater can be a useful recruiting tool for rural partners. Her father, a physician in Western Kansas and a graduate of the University of Kansas Medical Center, kept the phone number for the hospital in Kansas City, Kan., taped to his desk.

“That was who he called,” she said. “Physicians and providers are loyal to this organization.” 

A new structure

The University of Kansas Hospital rebranded to KU Health System in 2017, soon after it closed on the acquisition of Hays Medical Center. The name change hinted at a broader shift to come; since then, Page’s role has pivoted to overseeing the broader health system, with Peterman leading local operations as president of its Kansas City division.

As the system continues to expand across the state, Page said it can’t lose sight of its operations in Kansas City.

“At the end of the day, all of the work we do across the state of Kansas is absolutely dependent on the success of this enterprise right here. This allows us to make these moves across the state,” Page said.

The plan to look statewide dates to 1998, when KU Hospital won approval from the Legislature to be placed under an independent hospital authority. The move allowed the hospital to shed state personnel and purchasing policies that kept it from competing with other health systems. But embedded in the law that gave it this freedom was a mandate to improve the health of Kansans.

“While there is a strategy to this, the reality is we have a mandate that we’re now positioned finally to achieve,” Page said. “It took us five to 10 years to get our own ship fixed. We were in no shape to go try to improve the health of Kansans because we were trying to improve our own health.”

Now, with KU Health System financially stable, Page said hospital leaders saw an opportunity to look more broadly across the state. In 2016, the health system brought in $1.73 billion in revenue and had operating income of $135.8 million.

“At the center of that is not this hubris about ‘We need to be this big, and we’re not going to rest until we get this big,’” he said. “If you put the patient in the center of the decisions you make, those decisions are easier to make.”

That effort began about five years ago, with a $12.5 million grant from the Centers for Medicare and Medicaid Services to improve heart attack and stroke outcomes at 10 community hospitals.

Bob Moser, who practiced family medicine for 22 years near the Kansas-Colorado border, led that effort with Jodi Schmidt, executive director of regional outreach for KU Health. They worked with rural hospitals to develop protocols for identifying heart attacks and strokes early and administering treatment.

Often, they would work with primary care providers at smaller facilities that might see only three to five stroke cases a year.

“The more you do, the more efficient you can become,” said Moser, now executive director of the Kansas Heart and Stroke Collaborative. “Where it’s rare, you have to have a protocol you can pull out that walks you through it so you can do that intervention in a timely matter.”

When Moser initially went out to communities to explain the program, they’d ask: “What in the world does The University of Kansas Hospital need out here? Don’t you have enough patients?”

Once they were able to convince doctors that KU Hospital wasn’t there to poach patients, Moser said that made it possible to strike a partnership that resulted in Kansas City doctors helping rural providers, and those providers, in turn, teaching specialists what challenges they face in rural communities.

“Those relationships are what have led to partnership of University of Kansas Hospital and HaysMed, Great Bend and Larned,” he said. “I don’t think those alliances would have likely occurred, not at this pace, without having done a lot of this work.”

Health care highway

KU Health System’s deal for HaysMed was rooted in discussions among a group of hospital leaders, including Page and former HaysMed CEO John Jeter. They hoped to form a system connecting hospitals along Interstate 70.

Initial conversations didn’t go anywhere. But Jeter approached KU Health System again, and the two struck a deal.

“John, in his final year as CEO out there, had the vision and the courage to make that happen,” Page said. “I will forever respect John for doing that at that stage of his career because many CEOs want to walk out with their name on the building, with the pride they had in building something without joining another organization.”

The deal called for KU Health System to issue $40.2 million in bonds to pay off HaysMed’s debt. Fitch Ratings gave the bonds an AA- rating, stating that it viewed the acquisition favorably for the hospitals’ distinct service areas, HaysMed’s historic profitability and its dominance in the local market.

HaysMed plays a pivotal role in the health of Ellis County and the surrounding communities. The 207-bed hospital is one of the largest in Western Kansas and the only provider of heart surgery, cancer care, orthopedics and neonatal intensive care services in its five-county service area. In all, HaysMed sees referrals from 24 critical-access hospitals — facilities with 25 beds or fewer.

“We want (critical-access hospitals) to maintain their healthiness and take care of their patients at their level of competency,” HaysMed Chairman Alan Moore said.

For example, a patient with pneumonia might receive treatment at the nearest hospital in Quinter, Kan. If the patient’s condition becomes more serious, she would be transferred to HaysMed. And in the most severe of conditions, that patient would be transferred to a larger hospital.

Before, that referral depended on the physician’s preference. HaysMed would send patients to Wichita, Denver or Kansas City.

“Now, there’s a collaborative effort to make sure we know where we’re sending our patients,” Moore said. “We know they’re going to get the best care possible, keeping them within the system.”

With the purchase of HaysMed, KU Health System also acquired 25-bed Pawnee Valley Community Hospital in Larned. A year later, it acquired another hospital that had been in conversations with HaysMed — 33-bed Great Bend Regional Hospital.

KU Health System’s biggest purchase did not involve a small, rural hospital. Buying 378-bed St. Francis Medical Center in Topeka wasn’t part of the health system’s original plan. In fact, Page said KU Health had been cultivating a relationship with its competitor, Stormont Vail Health, before the deal.

“When the Sisters of Charity (of Leavenworth) decided they were going to close St. Francis, and the governor’s office called us and said we’d like to have a conversation, you answer that call, attend those meetings and figure out what’s the right thing to do for Kansans,” Page said.

KU Health System formed a joint venture with Nashville-based Ardent Health Services, collectively issuing $90 million in bonds for the Topeka hospital, which was nearing bankruptcy. The arrangement resulted in St. Francis becoming a for-profit hospital.

Peterman compared the installation of the KU Health System logo at St. Francis to a pep rally, with cheering and music.

“That’s different than it was in Great Bend, and it’s different than it was in Hays,” she said. “That one (St. Francis), they were just happy that their organization was going to remain open.”

Page said KU Health System will plan more deals, but he couldn’t identify future targets.

“We don’t know the next five. And we’re not here to take every phone call and say yes,” he said. “The big message is we’re not done. This is not going to be the end of the development of The University of Kansas Health System.”

Originally published in the Kansas City Business Journal, Sept. 21, 2018

Pictured above: The University of Kansas Health System’s main hospital campus in Kansas City. Photo by Adam Vogler.