Tough, Feisty, Visionary: Mount Sinai’s CEO On Location at Aspen Ideas: Health

Margaret Flinter (00:01)
Recorded on location at Aspen Ideas Health in Aspen, Colorado.

Mark Masselli (00:12)
He leads one of the nation's largest and most respected integrated academic health system in the nation. Mount
Sinai Health System is based in New York City and has worldwide influence. Today we'll learn how he is using
his authority.

Margaret (00:27)
Our guest today, Dr. Kenneth Davis, CEO of Mount Sinai Health System, which operates eight hospital
campuses and is recognized for its excellence in patient care, in research and education. And this is
Conversations on Healthcare.

Mark (00:49)
Well, Dr. Davis, welcome to Conversations on Healthcare.

Dr. Kenneth Davis (00:51)
Great to be with you guys.

Mark (00:52)
Yeah. One area we know, you and Mount Sinai are focused in on is population health. Wonder if you could just
describe to our listeners what's your approach of building a scalable, sustainable, population healthcare model?

Dr. Davis (01:06)
Fine. what population health is, is the ability to be paid by our insurance companies ahead of time. and then
whatever money you can save is profit to the hospital. So it's kind of a, a big contract for a large population of
patients. So you have to take care of, essentially what they're telling you is in population health is we want your
patients to stay Well. Yeah. Because if your patients stay well, you're not gonna use all this money that we're
giving you ahead of time. So we're encouraging you, we're motivating you, we're rewarding you to keep your
patients healthy. That is quite different from the system we're on now, which is a fee for service system. Yeah.
Which means every time people get sick, we get paid, and we get paid the most when people get sick the
longest. so it changes the system, turns everything upside down. It tells your doctor, do everything you can to
keep this patient well. and it has to change then the reward system for what they get. Now. To our surprise, it
has not taken off as much as we thought it would. Hmm. It seems to be somewhat difficult for the doctors to
want to join programs like this, and patients sometimes don't feel all that comfortable perhaps. and insurance
companies haven't been all that comfortable in contracting around these issues. So we're still stuck for the most
part in our old fee for service system as much as we sit down with the insurance companies and say, let's see if
we can design a value-based population health contract.

Mark (02:48)
So really, thinking about, communications both to providers, to, patients and to, payers, about how this model
will work as part of the right, of the work that you have to do in terms of selling the, selling the project.

Dr. Davis (03:03)
Right. And making everyone think that this is in their interest.

Margaret (03:07)
Well, if I can, this is obviously something that is front and center for everybody in healthcare hospital
admissions and readmissions is a quality measure, not just a cost measure. we see it in Medicaid. Medicare is
looking to move all of its patients into some kind of value-based program within the next several years. And,
and one would think, what's, what's the expression? My father would say, what's good for the goose is good for
the gander. Right. The things that you are doing are things that we would want to do for anybody to prevent
them from being admitted or readmitted. Maybe share with us a little bit, what are you doing, what have you
found to be the strategies that are most successful? Doesn't happen just by the docs, right? It's the discharge
planners, community people. What have you found is your strategies that really achieve that goal of lower,
admissions and readmissions?

Dr. Davis (03:58)
Well, it's a very hard question. Because we get some of the very most sick patients, and when you get very, very
sick patients, it can be out of your control around readmissions. People who immunosuppressed, people who are

very elderly compromised many comorbidities. So you do the best you can. what is the best we can, we need to
incentivize our doctors so that instead of their benefit being seen as if I see more patients and I have more
turnover, I'm going to have more money. the more I do, the more I get. Instead, it has to be, if I keep these
patients well, then I'm going to get a bigger bonus. What does that mean for them? That means they have to do a
lot more outreach. You have to be a lot more preventive. You have to make sure that your patients are taking
their medications, that they're going to their appointments, that they're following their right diets. That perhaps
they're exercising when they should be. So you suddenly even have to engage in sociodemographic factors that
are somewhat difficult for you to control, but you've gotta do the best you can to do that. and it's depending on
the illness and the compliance of the patient can be very difficult. but we have to change the way patients and
doctors think about things this way.

Mark (05:25)
Well, You're orchestrating so much in your system. One element is this Institute for Health Equity research. I'm
wondering how that's driving to improve, efforts for demographic, collection, educational research, and are
others looking to your work as a model?

Dr. Davis (05:43)
Well, let me speak to that. It's important. We hear so much about this. Mount Sinai Hospital lives at the
juxtaposition of the richest and poor zip codes in America. Our hospital spans those. Our commitment is to give
everybody the same level of care. That's a big challenge. When some people are coming in and your hospital is
being paid 250% of Medicare and on the other side, the Medicaid patients, you're losing 50 cents in every dollar,
and you want everybody to be treated the same way. But it also reflects the fact that we have an incredibly
diverse patient population that we see. We know that patients are more compliant with the ethnic groups that
treat them if they're the same ethnic group. so what does that really mean for us? That means we must have a
diversity of physicians, of nurses, of technicians that reflect our communities. Hard to do.

Mark (06:44)
Hard to do in the midst of the post-pandemic…

Dr. Davis (06:47)
Well, Yes, but hard to do because there's not a lot of people who've been trained. For what we need, for
instance, we know that if you have a black male doctor, that doctor will get his patients who are black to be
much more compliant. Finding black male applicants to medical schools is not that easy. so what we've done,
and this is encouraged by our diversity equity inclusion group, is to reach out now to a lot of the public schools
in the area and begin to connect to kids at a young age and get them involved in our hospital and in our
laboratories, and see that this is a great path forward for you. This is exciting work. You can do this. and we're
going to stay with those kids, in high school, junior high school, I'm sorry, high school, college, and encourage
them to be in our medical school ‘cause we, we just know we have a deficiency there. it's something that we
think is very important, but it's not easy.

Mark (07:58)
I, I think, Margaret remind me who we had on maybe coming into the AMA the new incoming president had
indicated that from when he was entered, there were only 5% of the physicians…

Margaret (08:10)
The president of Morehouse.

Mark (08:11)
I'm sorry, the president of Morehouse, who indicated when he became a physician, 5% of the physicians were
black and that hadn't changed over the years.

Dr. Davis (08:20)
It certainly hasn't changed, and it may be even a little bit worse.

Margaret (08:25)
Well, it's certainly a strategy we have to begin today. And I was glad to see, one of the 10 bright ideas that were
talked about yesterday was that wonderful emergency room physician. I don't know if you heard that session, I
should say here at the Aspen, Aspen Ideas event, talking about reaching out, treating potential candidates with
the early respect and recognition that we need to. But on the path to that, and when you think about it today, I'm,
I'm still wrapping my arms around, the environment you live in is, as you said, both the intersection of rich and

poor. Probably one of the most diverse areas in the United States. And when I think of population health
anyway, hundreds of populations within that, your maternity patients, for example, your patients who have
chronic psychiatric illness or substance use disorders, your patients who are homeless, as well as your very,
elderly patients who may more likely be in Medicare Advantage plans that are going to do some of this work for
you, possibly around addressing social determinants of health. You're running an enormous system. How have
you, organized, your population health teams in addition to the, physicians who are caring for them to be doing
this work for you? It's enormous effort to be in contact with people and, making these strategies work.

Dr. Davis (09:45)
Yes. It takes a lot of outreach. And that could be by phone now that could be by Zoom, or that could be by
directly knocking on the door. And our challenge is for a lot of that work, a lot of that proactive work, in a fee
for service model, there is no reward. so why do I even mention that? I mentioned that because in psychiatric
care where we certainly don't have anybody talking a lot about population health, we have a lot of recidivism,
and we have to address that by going out and finding out is this patient taking their meds? If they didn't come in
for their visit, why didn't they come in for their visit? How are we gonna make sure they come back for their
visit? if we don't have that cooperation, that connectedness, we lose. And then they get relapsed. And then we'll
get penalized for readmission.

Margaret (10:43)
But we do have a natural experiment, as you've said, the Medicare advantage plans. Right? They get reimbursed
based on the complexity of the patient, and they keep the differential, largely, if patients do better, if they have
less expense on the medical side and they invest more on the social side. And, you also have a large, as you said,
Medicaid population has the state of New York. Have you seen innovation around adopting some of those
measures?

Dr. Davis (11:07)
No. I only wish what you said about Medicare Advantage was true. The reality about Medicare Advantage and
the insurance companies have taken it up is that they've nearly doubled the number of denials that we've seen
over the last two years. We are fighting insurance companies all the time. They are denying care that you
couldn't believe would ever be denied. They are downgrading the DRGs all the time. Their model is not to keep
people, well keep their model is to make sure that they don't spend the money that they've gotten from the
government in their Medicare Advantage program.

Mark (11:36)
Well, and, and it's, it's so true. And I think the, the number of people who are, I think 46% of the Medicare
population is now Medicare…

Margaret (11:44)
Are in a value-based plan.

Mark (11:45)
…in a value-based plan. But you were talking about the psychiatric, issues of people who are in the system. But
we're seeing this emerging youth mental health problem in this country. people who aren't in the system but are
really facing enormous challenges. And that's another challenge that you have in your system. Talk to us a little
bit about your thoughts of how we start to tackle this. No one institution, can do it alone. It requires a
community approach.

Dr. Davis (12:12)
Well, obviously you've gotta put healthcare workers, mental health workers in the schools. Right. Very hard to
do. There aren't enough mental health workers to come around and yet there's very little budgeting for that kind
of thing. You're lucky you got a school nurse, let alone, you know, a school social worker, psychologist or
referral to a psychiatric system. So a lot of mental health issues that are existing in the school will just pass, will
not be either identified or people will turn their back to it ‘cause there's nothing they can do about it. And the
families are working so hard, or in other cases are so, you know, torn apart that they're not seeing this until it's
too late. They don't get us to the care soon enough. Right. So it's a growing problem. We know it's a growing
problem. We're gonna have to address this at a more governmental level and ask where's the funding gonna
come from and how are we going to encourage this kind of care?

Margaret (13:09)
Well, That's where the collaborations I think really do come from. And I think, I think your colleagues at
Montefiore I've visited who seem to be extensively engaged in school-based health centers and in Connecticut
within our health system, we have 165 schools or so, each with one full-time therapist, sometimes two therapists
backed up by psychiatric APRNs. We developed a residency program to train those psychiatric APRNs. But
these, as long as they exist in one place, but not every place we leave people out. And yet the, I'd be curious,
among your colleagues who have lived through Covid, thankfully, I'm sure, we can talk more about that. What
an extraordinary experience that must have been. Do you meet with your other, your fellow CEO colleagues, do
your pop health people need to see how can you learn best practices from each other and, implement some of
these things?

Dr. Davis (14:01)
Every Wednesday morning I have a call with the CEOs of the other major healthcare systems in New York. So
NYP, NYU, Montefiore and I are on the phone together for an hour and we're led by Ken Raske as the head of
Greater New York Hospital Association. And we talk about our common problems and what we're gonna do
about it. we didn't do that before covid. So that is something that has been initiated and we all find it very
helpful.

Mark (14:27)
Well, you know, I want our listeners to know that in addition to being a leader of a hospital system, you're a
neurobiologist, conducting pioneer research that led to FDA to approve four of the five, five first drugs. treating
Alzheimer's disease was interesting. We had a conversation with the head of the leads of, ARPA H today who
are also looking at this issue of how do you cure cancer and Alzheimer's not easy. What, what's your sense on
the Alzheimer's side, the, the, the work that we need to do? And you really are a leader in this field.

Dr. Davis (15:05)
Well, I was until I became the CEO. I used to do a lot of that work and work in schizophrenia. it's, if somebody
had told me that the first drug that I gave to an Alzheimer's patient, which was probably about 1976, that we
would still, those would still basically be the drugs that we use today 40 plus years later. I'd be astonished. Part
of the reason is the Alzheimer's community has fallen in love with the amyloid hypothesis. And everything that
they've tried to do has been to clear amyloid. It's been difficult to do, and even when they do it, it hasn't
produced the results that they wanted. So we need to think through other ways that this system may be going
badly. More recently, there's been some awareness that it might be that microglia aren't doing what they're
supposed to be doing to clear the brain. So this amyloid accumulates, we've got to encourage microglia to do a
better job, and that's a whole different group of drugs and we're gonna have to target them in a different way. so
it's been disappointing. The, the, the Eisai-Biogen drugs that have recently been approved, it's better than
nothing. it's still nothing like what we need. We have to remember that Alzheimer's disease starts in your brain
25 years before you have symptoms. We can identify those changes that are going on in the brain now, but what
we don't have is a drug to do anything about it. It would be like, you'd like to think, you know, we lower
cholesterol, we lower triglycerides so that we don't have a cardiac event. What we'd like to think about is what
do we have to do to maybe make those microglia start to work 25 years before people are symptomatic. People
haven't conceptualized the Alzheimer's disease that way about what are we gonna do for prevention when
people are asymptomatic. so we intervene later. and the interventions, you know, we gain a little, we slow
progression a little bit. Some drugs are better than others. but it's still frustrating.

Margaret (17:08)
Well, you certainly, focused your clinical work in very challenging areas. And I know in addition to
Alzheimer's, schizophrenia was one of those areas, and we, we mentioned that before in terms of a population
that's just so challenging. And we've lived through, we've been around a long time. We lived through the
deinstitutionalization and the eighties and the attempts at community. But, certainly progress has been made in
terms of community supports. But in terms of, truly effective treatment for schizophrenia, comment on that as
well?

Dr. Davis (17:38)
I'm gonna answer your question with a little aside. we just opened a center downtown Browns, Hudson Yard,
SoHo, below SoHo, called Rivington. This is a complete psychiatric facility course that's 140 million to build
this. Why would we spend 140 million on behavioral health when that service line loses 23 million a year?
Right. Sounds a little crazy from the P and L point of view.

Margaret (18:06)
Not To us, but…

Dr. Davis (18:08)
Well, you know, and it's, it's, it's a very bad business we're in. We did it because we knew that psychiatric care
had to change and we wanted to have a new model to change it in. And that model was a place where patients
would go for all their psychiatric care, from inpatient to partial hospitalization to outpatient to our reaching out
to them. So in one, one building, we have all the services we need, but here's what that also makes possible. The
nature of psychiatric disease is often not to build good relationships. It's not to trust, trust. So every time you
change a treatment team, patient thinks, ‘oh no, I don't know if I can… do I really want to go to see them again?
Oh man.’ But if you can be with the same team from the time you first enter our facility forevermore and
develop a trust in a relationship, it's going to lead to better compliance. And we know that it's all about
compliance and making people not be readmitted and relapsed. We know that if you take your medication, your
chance with schizophrenia, chronic, your chance of being readmitted in a year is about 20%. If you don't take
your medication, your chance is 80%.

Margaret (19:28)
Right. Or jail or Worse.

Dr. Davis (19:31)
Or worse. And, or beyond the street. So, we want to have a constant treatment team that people can grow,
patients can grow to trust, so that perhaps we can get better compliance and better outcome. And that's why,
because I'm a psychiatrist and our dean's a psychiatrist, and we've lived this and we've seen the bad things that
we do in psychiatry and how we wanna improve them, that we spent this 140 million so we can have a new
model of healthcare and hopefully it's gonna make a difference.

Mark (20:01)
Well, That sounds great, and it sounds like it will make a difference. speaking on the psychiatric side, I know
the US Veterans Affairs has, done some trials on psychedelics to treat, post-traumatic stress disorder. Our
military face such an enormous, issue with this, people who have been going to Mexico and coming back and
saying, Hey, we need relief. It's a complicated one. You talked about P and L. the, it really requires two
therapists, eight hours, for four days to do this. Not really, there's not a cost structure in it, but maybe just talk
about the intervention itself and, and, and the model.

Dr. Davis (20:39)
Well, I don't know that much about it. Rachel Yehuda in our department of psychiatry is a leader in this area.
And she's a very strong believer that this can make a difference.

Margaret (20:53)
I read a lot of her work right after 9/11. She did a lot of the PTSD work. That was very impressive work.

Dr. Davis (20:59)
Yes. And, and she is a very good scientist. So when somebody of her stature is as committed to psychedelics as
she is, we have to believe that there's something there. And what we need now is good science behind it so that
we really know who will benefit, how much you should give, when you should give it. These are all the
questions that have to be resolved. And they're gonna only be resolved if we, you know, fund it with good IMH
money.

Margaret (21:26)
You know, you have the, you have all the clinical issues, the leadership issues, the financial issues, and then
these social issues also arrive on your plate. And we think of the Dobbs decision, and the impact on women's
reproductive health care, on the healthcare providers who care for women on the, the fears, the choices that
women may need to make to move outta state that providers may need to make not to practice or to practice in a
state. Has that also landed, on your shores at Mount Sinai? What's the conversation going on there?

Dr. Davis (21:59)
Well, I'll tell you about a conversation that I've had with some of my people around this issue in which I talk
about the hypothetical GYN who does abortion medications in New York state and now has been asked either
by telemetry, you know, telemedicine Or through the mail that somebody in another state where it's outlawed,
would like them to send medications. And the hypothetical conversation goes like this. He or she talks to his

spouse and says, you know, the right thing for me to do is to send these drugs outta state. We do it all the time in
New York. We don't have a problem with it. It's the right thing to do. And the spouse says, and then you know,
what's gonna happen to us? You wanna put this whole family at risk? I can't let this happen. You can't do this. I
don't care what they're telling you in the Congress. I don't care what they're telling you at Mount Sinai. I want
you to be safe and this is too dangerous. So, I don't know how much out-of-state prescribing there's really going
to be. All I know is in New York State, we're still okay.

Mark (23:20)
You know, a lot of things wash up on, on your shore and on your watch. We'd like to get your reaction to the
pushback to the gender affirming care pilot program in New York State. In fact, New York State is the first in
the country to devote funds to improve access to care for transgender people. How are you navigating the
criticisms? It is a difficult, waters to navigate, I'm sure.

Dr. Davis (23:43)
We are strongly in favor of the transgender program. We have at one point, ‘cause we were some of the first in
New York, Manhattan metropolitan to do this, we had a year waiting list. there weren't enough surgeons to
meet the demand. And when you meet these people, and when you talk to these people, what you know is what
they say is, ‘I knew I was the wrong gender from the time I was three years old.’ You, You never hear, I'm not
sure. You know, all this baloney about oh, you know, so many of them then they change their mind doesn't
happen. These are very dysphoric people who really need this help. And I'm proud that Mount Sinai has been a
leader in doing this.

Mark (24:25)
Good for you.

Margaret (24:26)
We appreciate that very much. Thank you. We talked just, we glanced over Covid a little bit and I really was, I
was moved that you found a positive, outcome of Covid in terms of, of that group. ‘cause I know it was
probably, quite something to live through it. But I'm curious in terms of the impact on your, health system, your
hospital's, overall, staffing, nursing workforce, changes in, how people feel about work. They performed so
incredibly heroically, exceptionally well throughout the pandemic. Have things settled down? Do you feel
there's a new normal? Are you struggling with staffing issues? Tell us about that.

Dr. Davis (25:08)
Well, as you've probably heard, this led to the great resignation. So nurses who were near retirement and
watched some of their colleagues die, said, ‘I can't do this. I have to find a safer place to practice.’ So they
moved to other jobs in nursing. other people in the healthcare system started to do the same thing. So it may be
because they were afraid it may be ‘cause they were near retirement. They said, I've had enough of this. But the
reality is it left us with major staffing shortages. We brought in per diem nurses to meet up that difficulty. we
are now doubling the size of our nursing school so that we could have more graduates. But as of this moment, I
could hire a thousand nurses, to reach…

Margaret (25:57)
If you could find a thousand nurses.

Dr. Davis (25:58)
And I can't. And that's the problem. So we have put in retention bonuses. We're doing everything we can to
increase the number where trying to look at their workload and say, are there things that others could do so that
they can be at the patient bedside more. but there it's, it's, it's changed. Everything has changed. I can't
remember 15 years ago, 20 years ago when I took this job, staffing shortages. You know, everybody wants to
work in a hospital, you know, it's great.

Margaret (26:30)
Yeah. We compete with you all the time for, for, to get nurses into primary care. But I'm, I'm really looking
forward to here at Aspen, connecting, there's an individual here, who apparently, is a real leader in the,
recruitment of nurses who, says all her data suggests that if we can offer, career advancement, that people want
to know that there's a career advancement within the organization as well as the salary issues. And I think that,
all important piece for people trying to figure out how they balance their lives.

Mark (27:00)
I would also say the immigration issues that, are really critical here. Because we just haven't addressed them.
And you can sort of chart where we've gone, you know, negative on allowing people to come in the country
along with these shortages.

Dr. Davis (27:15)
This is a hundred percent true. I brought the staffing shortage problem up to Chuck Schumer. He's very helpful
in so many ways to us. And he said, swear on a first name basis, he says, Ken, you know, I sponsored a bill
decades ago that brought in all those Philippines and Southeast Asian nurses and now we can't get bipartisan
agreement to bring in all the people that we need. Imagine that.

Mark (27:38)
And they're needed in red states and blue states.

Dr. Davis (27:40)
Right. It shouldn’t be bipartisan. We, we keep focusing on the Mexican border and not realizing that we have
staffing shortages that could be alleviated if we’d open up our borders to these people who'd like to come in
here, who are licensed, who are competent, come from Southeast Asia, Why not? Right. Why can't we get this
done?

Margaret (28:00)
And we would argue the longer-term play is the same as, as you spoke of with recruiting a more diverse
physician workforce, starting in grade school, really nurturing people through academies, giving them work
experiences.

Mark (28:12)
You know, I wanna talk a little bit about mission and margin. And you've talked, I think, eloquently about the
work that you've done on mission, the investments you're doing, but you also need to have a margin, and you are
credited with being, what's been called one of the largest financial turnarounds in academic medicine. our
teaching hospitals are essential, to the healthcare sector. They're often financially trouble. What lessons can we
share about how to strengthen teaching hospitals and hospitals?

Dr. Davis (28:40)
We have to make this a national issue. That reimbursement is inadequate in Medicaid across the country, barely
adequate, if at all, in Medicare. And that the insurance companies with their denials and denials and denials are
making it more and more difficult for us to have any kind of margin. When you add to that labor shortages are
causing us to have huge increases in our labor costs. Supply chain inflation is causing that to go through the roof
as well. Drug shortages are another big problem we're faced with, you know, really, really big problems. And
they are gonna have to be solved at a national level. You know, if you believe in equity and equality, then don't
institutionally underfund Medicaid so much and then expect that everybody's gonna be treated equally.

Mark (29:33)
Absolutely. The, you know, lots, lots of things going on. I do, do wanna get back to workforce because you
were also very focused in on that. What are some, one of the things we need to, have young people see people
like themselves ear early in their career, but are you running, at medical assistant levels or any other levels of
trying to bring in people and train them?

Dr. Davis (30:00)
We're doing it at every possible level, because we're short in so many levels. and I think we really need at a
national level to address the question of why aren't there more slots in nursing schools? Why do we have so
many more applicants than we have graduates? These people want to be nurses, so let's make it possible.

Margaret (30:26)
A hundred percent. Yeah. Dr. Davis, I have a feeling we could sit here all day and talk to you about the issues,
that we face, whether it's in the inpatient setting, the community setting, the policy issues, the workforce issues.
But for now, we'll say we're so pleased to have had the chance to meet with you here, at the, Aspen Health
Festival, to talk to you about these issues. We wanna thank you for all of your work over the course of your
career. More to come and thank you for joining us today on Conversations on Healthcare. And to our listeners
and our viewers, remember, you can sign up to hear more about our shows. Our address is chcradio.com. Dr.
Davis, thank you again.

Dr. Davis (31:05)
Thank You.

Mark (31:06)
Absolutely. Really appreciate it.

Margaret (31:10)
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