Dr. David Dunkle, President and CEO of Johnson Memorial Health

Summary

Becker’s Healthcare Podcast: In-Depth Summary of Interview with Dr. David Dunkel, President and CEO of Johnson Memorial Health

Release Date: August 13, 2025

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Introduction

In the August 13, 2025 episode of Becker’s Healthcare Podcast, host Laura Dearda engages in a comprehensive discussion with Dr. David Dunkel, the President and Chief Executive Officer of Johnson Memorial Health (JMH). The conversation delves into the current landscape of community and independent hospitals, highlighting both the challenges and opportunities that lie ahead.

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About Dr. David Dunkel and Johnson Memorial Health

Dr. Dunkel introduced himself, providing a detailed overview of his background and the institution he leads:

• Experience and Leadership: Dr. Dunkel has been with JMH since 2003 and has served in various capacities, including Chief of the Medical Staff and Vice President of Medical Affairs. He is in his sixth year as CEO after practicing family medicine for 18 years.
• Institution Overview: Johnson Memorial Health is a medium-sized community hospital located in the southern suburbs of Indianapolis, Indiana. The organization boasts approximately $120 million in net patient revenues and employs over 900 staff members.
• Facilities and Services: JMH operates a main hospital campus licensed for 125 beds and manages four outpatient medical pavilions. The hospital prides itself on a patient-first approach and a familial culture. Additionally, JMH is a member of the Mayo Clinic Care Network and is preparing to open a new 29-bed inpatient behavioral health adult unit in the near future.

Dr. Dunkel [00:31]: "Johnson Memorial Health is a medium sized community hospital in the south suburbs of Indianapolis, Indiana... We're a premier health care provider in the greater Indianapolis area."

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Major Achievements and Successes

When asked about the organization's biggest win in the past year, Dr. Dunkel highlighted significant growth in the surgical department:

• Surgical Department Growth: Through strategic recruitment, stabilization of the anesthesia department, and effective management of surgery block times, JMH achieved a 20% increase in outpatient surgical procedures and a 12% rise in inpatient procedures.
• Financial Impact: The surge in ambulatory surgeries is crucial for the financial stability of community hospitals like JMH.

Dr. Dunkel [01:34]: "We were actually able to demonstrate a 20% increase in outpatient surgical procedures and a 12% increase in inpatient procedures."

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Current Challenges: Medicaid Cuts and Financial Pressures

A significant portion of the discussion centered around the impending impacts of policy changes on Medicaid payments:

• The One Big Beautiful Bill: Dr. Dunkel expressed concerns about the bill's long-term effects, anticipating a $13 billion reduction in Medicaid payments to Indiana hospitals over the next decade. This reduction is attributed to decreased state-directed payments and the phasing down of the provider tax threshold.
• Increased Charity Care: With expected declines in Medicaid enrollment due to stricter work requirements and eligibility criteria, JMH anticipates a substantial rise in the amount of charity care provided.
• Operational Strain: The dual challenges of reduced Medicaid funding and increased charity care put immense pressure on hospitals to do more with fewer resources, raising fears of potential service reductions or closures.

Dr. Dunkel [02:25]: "Indiana hospitals are going to see close to a $13 billion reduction in Medicaid payments over the next decade... I'm really afraid that as a nation we're going to see more hospitals decrease services or shut their doors completely in the next couple of years."

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Strategic Preparations for Financial Uncertainties

In addressing how JMH is preparing for these financial challenges, Dr. Dunkel outlined several strategic initiatives:

• Financial Modeling: Extensive financial modeling is underway to assess the impact of reduced Medicaid and potential Medicare cuts.
• Payer Mix Management: With Medicaid constituting 57% of total cost of care and 70% of JMH's business, there is a critical need to diversify and strengthen the commercial payer segment.
• Maximizing Profitable Service Lines: Emphasis is placed on maintaining and expanding profitable services, such as the surgical department, while evaluating less profitable service lines for potential adjustments.

Dr. Dunkel [03:32]: "We have to look closely at those service lines that might not be profitable while thinking about how you can further maximize your profitable service lines."

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Enhancing Revenue through Commercial Payers

Given the predominance of governmental payers, JMH has shifted focus towards increasing revenues from commercial payers:

• Revenue Cycle Reorganization: Collaborating with Porvis Mazars, a national partner, JMH undertook a comprehensive redesign of its revenue cycle processes. This initiative led to significant improvements in cash collections, reduction in accounts receivable, and a decrease in denial rates.
• Denial Management: Effective strategies to combat claim denials have been implemented, enhancing overall revenue integrity and financial performance.

Dr. Dunkel [05:03]: "We've had a great increase in cash collections in the last year, decreases in accounts receivable, and have done a much better job of fighting denials."

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Breaking Down Silos for Operational Efficiency

A key factor in JMH's success has been fostering collaboration across different departments:

• Interdepartmental Communication: Emphasizing the importance of communication between Revenue Cycle (Rev Cycle) teams, Health Information Management (HIM), and clinical leaders to ensure comprehensive clinical documentation and billing accuracy.
• Automation and Technology: Implementing automated solutions for tasks such as insurance verification to streamline operations and reduce manual errors.
• Unified Organizational Culture: Encouraging all departments to view the organization holistically, ensuring that every team member understands their role in the broader mission of JMH.

Dr. Dunkel [06:28]: "The important thing is, to get all of the shareholders at the table to see how every one of their departments is impacted by other departments."

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Opportunities for Growth: Embracing AI Technology

Looking ahead, Dr. Dunkel identified Artificial Intelligence (AI) as a pivotal area for future growth and operational enhancement:

• Operational Efficiency: AI integration is expected to revolutionize everyday operations, from ambient listening solutions that boost provider productivity to broader applications that drive efficiency.
• Strategic Partnerships: For successful AI implementation, choosing the right technology partners and leaders in the field is essential to avoid making uninformed decisions.
• Future Integration: AI is anticipated to become an indispensable modality in healthcare, offering limitless possibilities for improving service delivery and operational workflows.

Dr. Dunkel [07:46]: "The biggest opportunities for growth in healthcare are going to be centered around AI and how it is integrated into everyday operations."

Dr. Dunkel [08:41]: "You don't want to be the last to adopt. And we need to use AI to maximize how we operate."

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Leadership in a Dynamic Healthcare Environment

Dr. Dunkel shared his vision for leading a thriving organization amidst evolving challenges and technological advancements:

• Maximizing Profitable Services: Continuously enhancing profitable service lines while maintaining accountability from payers regarding contractual terms.
• Leveraging AI: Utilizing AI capabilities to stay ahead in operational efficiency and service delivery.
• Flexibility and Strategic Foresight: Remaining adaptable to unforeseen challenges, such as further reductions in Medicaid eligibility, and strategically planning for the future.
• Commitment to Quality and Safety: Maintaining high standards in patient care, as evidenced by JMH's improved Medicare star ratings, underscores the organization's dedication to excellence.

Dr. Dunkel [09:57]: "The ability to maximize current profitable service lines, hold payers accountable... and maintaining the flexibility to respond to unforeseen challenges... is key to leading a thriving organization."

Dr. Dunkel [10:57]: "We're very proud at JMH to have recently been leapfrog a hospital where we have greatly improved our Medicare star ratings in the last few years."

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Conclusion and Closing Remarks

The conversation concluded with reflections on JMH's journey towards excellence and resilience in the face of financial and operational challenges. Dr. Dunkel humorously acknowledged a slight drop in ratings but remained optimistic about the organization's progress and achievements.

Dr. Dunkel [11:15]: "Unfortunately we're going to go down to B by like 1c diff infection. But still, considering at one point we were a C, I will still take the win."

Host Laura Dearda expressed appreciation for Dr. Dunkel's insights and congratulated him on the organization's accomplishments, underscoring the importance of maintaining patient-centered care amid a rapidly changing healthcare landscape.

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Key Takeaways

1. Financial Resilience: Community hospitals like JMH must strategically manage payer mixes and optimize revenue cycles to navigate significant Medicaid payment reductions.
2. Operational Efficiency: Breaking down departmental silos and leveraging automation can lead to improved financial performance and service delivery.
3. Embracing Technology: AI holds transformative potential for healthcare operations, offering avenues for enhanced efficiency and patient care.
4. Leadership and Flexibility: Successful healthcare leadership requires strategic foresight, adaptability, and a steadfast commitment to quality and safety.

Dr. David Dunkel's insights provide a valuable perspective on the intricate balance between financial management, operational excellence, and technological innovation necessary for community hospitals to thrive in an evolving healthcare environment.

Transcript

[A]

This is Laura Dearda with the Beckers Healthcare Podcast. I'm thrilled today to be joined by Dr. David Dunkel, President and Chief Executive Officer at Johnson Memorial Health. Dr. Dunkel, it's a pleasure to have you on the podcast today.

[B]

Thanks for having me.

[A]

Now, I'm excited for our conversation because I know there's so much happening in healthcare, particularly for community hospitals and independent hospitals like yourself. And so I know we'll get into some of the challenges as well as opportunities there. But before we do, can you tell us a little bit more about yourself and Johnson Memorial Health? Sure.

[B]

So I'm Dr. David Dunkle, President CEO of Johnson Memorial Health, or JMH as we're commonly referred to. I've been at JMH since 2003. I'm in my sixth year as CEO after practicing family medicine here for 18 years and serving in various roles such as Chief of the Medical Staff and Vice President of Medical Affairs. Johnson Morrow Health is a medium sized community hospital in the south suburbs of Indianapolis, Indiana. With approximately 120 million in net patient revenues and just over 900 employees. JMH is a main hospital campus licensed for 125 beds and operates four outpatient medical pavilions with a focus on putting the patient first and instilling a family like culture. We're premier health care provider in the greater Indianapolis area. We're also a proud member of the Mayo Clinic Care Network and are anxiously looking forward to opening a new 29 bed inpatient behavioral health adult unit in the next couple of months.

[A]

I love that. That's amazing to hear, you know, and certainly exciting that you're continuing to grow and expand. I'm curious, what's the biggest win or success you've had in the last year or so?

[B]

Well, honestly, as I look back in 2024, I think the biggest win the organization had had to do with the growth in our surgery department. Through the recruitment of new providers, stabilization of our anesthesia department and the active management of surgery block times, we were actually able to demonstrate a 20% increase in outpatient surgical procedures and a 12% increase in inpatient procedures. And as you know, ambulatory surgery is very important to the financial stability of community hospitals.

[A]

Yes, I know. That's a huge aspect of what helps continue to operate. In looking at that surgical ability to provide surgery and ambulatory surgery certainly is key. So when you think about that as well as how the environment is changing, what are the top two or three issues you're focused on right now? What's top of mind for you.

[B]

But really top of mind that I'm focusing right now is determining how much the passage of the one big beautiful bill is going to impact my organization long term. Indiana hospitals are going to see close to a $13 billion reduction in Medicaid payments over the next decade due to reductions in state directed payments and the phasing down the provider tax threshold. In the short term, I suspect the amount of charity care that my organization provides is going to increase significantly as Medicaid enrollment decreases through work requirements and eligibility crackdowns. It's just a shame that hospitals are continuously being asked to do more with less. I'm really afraid that as a nation we're going to see more hospitals decrease services or shut their doors completely in the next couple of years.

[A]

I know that's a huge challenge and you know, we'll definitely want to dig a little bit deeper there. But how do you prepare for those, as you mentioned, potential Medicaid cuts and increased charity care, as well as, you know, seeing some of the other hospitals in the area needing to cut services or possibly close their doors? What does it mean to your organization and how do you kind of prepare for that future?

[B]

Well, it's difficult because you have to do a lot of financial modeling of just what that means because for our hospital, you know, it's like many rural or suburban hospitals we have a majority of our payer mix is governmental payers. So again, we talk about Medicaid, which in Indiana pays about 57 cents on the dollar for total cost of care. And as we know nationally, Medicare is about $0.82 on the dollar. And that's, that's approximately 70% of the business here at our hospital. So that puts a lot of pressure on us because again, we're looking at obviously decreased Medicaid reimbursement in the next 10 years after the one big beautiful bill. But also there's some potential Medicare cuts coming as well. So it's difficult because you have to sit and think, what can you continue as an organization, provide the same level of services that you do? You have to look closely at those service lines that might not be profitable. At the same time, thinking about how you can further maximize your serviceable problems service or your profitable service line, such as I mentioned earlier with our surgery. So it's difficult because, you know, it's easy when you look on paper about managing expenses well, but unfortunately, no. Expenses have names. Expenses have families lots of times. And that's the difficult balance that I think a lot of hospital leaders are facing.

[A]

Right now, Absolutely. That makes a lot of sense. And you know, it's a great way to put it. It's not just numbers on a page, but really, truly people that are behind that, that are affected by all of these decisions. Now, what else is top of mind for you so you spending your time and thinking about things?

[B]

Well, really, because again, as I talked about, approximately at our organization we have about 70% governmental payer, but really we're focused on how to maximize that 30% of commercial reimbursement. We've worked very hard in the last couple years of really reorganizing our revenue cycle, putting a lot of effort in our processes. We work closely with a national partner, with a team from Porvis Mazars to really do a deep dive and redesign. Our revenue cycle had great success. We've had a great increase in cash collections in the last year, decreases in accounts receivable, and have done a much better job of fighting denials. Our denial rate has also decreased. So I think that is incredibly important too. And though a lot of focus recently has been on the one big beautiful bill and Medicaid to still remember we have to maximize what we're getting from commercial payers.

[A]

Absolutely. That's so critical. And I know it's easier said than done, especially when you think about how commercial payers are continuing to operate and seems like make changes on a daily basis as well. You know, when you look at that reorganization of the revenue cycle and then, you know, trying to just continue to forge deeper relationships with those commercial payers, what's been successful for you? What can you share with us that has helped you along that journey?

[B]

Well, really a lot of it's breaking down silos. You know, we talk about this all the time, but it's really, you know, is the Rev Cycle team talking to the HIM team? Are you really involving your clinical leaders? Because clinical documentation is such an important part of what we do as well. So. And then also, you know, using, using automation for doing things like insurance verification. So it's not one thing, it's, it's, you know, it's multiple things happening at once. But the important thing is, is to get all of the shareholders at the table to see how every one of their departments is impacted by other departments and making everyone realize that this is John Samorial health as a whole and not your individual apartment. And that's always an ongoing battle.

[A]

Absolutely. I definitely can understand and appreciate that. It's so important to see the big picture in many ways, but not always the easiest thing to do when there's so many different challenges in many different things that are focus points for different departments as well. Well, absolutely. So where are some of the big opportunities for growth in the future? I think, you know, obviously a lot of challenges, but where do you see growth becoming, you know, possible as you think about the next two to five years or so?

[B]

Well, you know, like, like other industries, I really feel the biggest opportunities for growth in healthcare are going to be centered around AI and how it is integrated into everyday operations. We've already seen the positive effects that improved ambient listening solutions have had on provider productivity and sat. And I feel really the sky's the limit as we better utilize AI in the future to drive operational efficiencies as well.

[A]

That's fascinating to hear. And I think AI, you know, is evolving so quickly and the technology makes, you know, can be integrated in the operational side, clinical side and more. But there's also a lot of, you know, challenges and risks. That too, when you look at AI in the potential moving forward, as you mentioned, sky's the limit. How do you really make sure you've got a strong infrastructure in place and where you can bring it in and figure out the right ways to use the technology, which I know in many ways can be a big investment as well.

[B]

Well, again, it's challenging, right? Because then, as we know, no matter what you look at, as far as change management is always, always has its challenges. But I think one, especially being a smaller organization, it's about choosing good partners, doing your due diligence in partnering with proper companies and leaders in the field, and also, you know, not making rash decisions, being sure that your team is doing their due diligence and not just jumping into things with blinders on. I think that's very important because as we know, AI is growing at such a fast rate. So it's difficult. It's difficult, but you don't want to be the last to adopt. And we need to use AI to maximize how we operate. And I feel the sky is the limit. And I think we're going to see it's really in the next few years going to become more of just an everyday modality that we use.

[A]

That makes a lot of sense. You know, it will really be a helpful aspect of evolving the health care system and in workforce in general. What do you think it will take to lead a thriving organization over the next five years given these very real challenges as well as opportunities with technology, AI and in additional services coming into the organizations?

[B]

Yeah, I really think the key you know, leading a thriving organization, the five years will be the next five years is the ability to maximize current profitable service lines, hold payers accountable, the terms of your contracts with them, leveraging, you know, beneficial AI capabilities while at the same time maintaining the flexibility to respond to unforeseen challenges such as decreases in Medicaid eligibility tied to the one big beautiful bill. Healthcare is not stagnant. There's, you know, it's ever changing and you have to be strategic and you have to foresee challenges ahead while at the same time not forgetting to focus on the quality and the safety that you need in your current offerings. And that's why, you know, we're very proud at JMH to have recently been leapfrog a hospital where, you know, have greatly improved our Medicare star ratings in the last few years. And, you know, we take quality and safety very seriously and it's something we're very proud of here.

[A]

Absolutely. I love that and I think it's such an important reminder of keeping that patient front and center with everything you're doing, even as the world changes around you. So I appreciate that and certainly a great accomplishment. Congratulations on the A rating and continuing to maintain it, I'm sure.

[B]

Well, yeah, unfortunately we're going to go down to b by like 1c diff infection. But still, considering at one point we were a C, I will still take the win. I will still take the win, absolutely.

[A]

100%. Well, Dr. Dunkel, thank you so much for joining us on the podcast today. I really appreciate your time and perspective here and look forward to connecting with you again soon.

[B]

Hey, thank you so much and thank you for everything you do.