1 00:00:01,679 --> 00:00:04,240 Every year, Becker's annual meeting brings health care 2 00:00:04,240 --> 00:00:06,799 leaders together to unpack the most pressing issues 3 00:00:06,799 --> 00:00:07,779 facing the industry. 4 00:00:08,160 --> 00:00:10,980 And every year, those conversations shift in profound 5 00:00:11,039 --> 00:00:12,419 and unexpected ways. 6 00:00:12,785 --> 00:00:15,025 This April, more than 3,500 7 00:00:15,025 --> 00:00:17,204 healthcare executives will return to Chicago 8 00:00:17,505 --> 00:00:19,445 for Becker's sixteenth annual meeting. 9 00:00:19,824 --> 00:00:22,785 Seven ninety five elite speakers will offer new 10 00:00:22,785 --> 00:00:25,809 lessons, new case studies, and predictions about what 11 00:00:25,809 --> 00:00:26,550 comes next. 12 00:00:26,850 --> 00:00:29,109 Join us April 13 through the sixteenth. 13 00:00:29,489 --> 00:00:33,969 For the agenda and event details, visit beckershospitalreview.com 14 00:00:33,969 --> 00:00:35,809 and click on the events tab in the 15 00:00:35,809 --> 00:00:36,629 upper right. 16 00:00:38,064 --> 00:00:40,945 This is Scott Becker with the Becker's Healthcare 17 00:00:40,945 --> 00:00:41,445 Podcast. 18 00:00:41,824 --> 00:00:43,424 I I'm thrilled today to be joined by 19 00:00:43,424 --> 00:00:46,405 Alan Condon, editor in chief of Becker's Healthcare. 20 00:00:46,545 --> 00:00:48,704 He does an incredible job of following what 21 00:00:48,704 --> 00:00:51,149 is going on with systems in the country, 22 00:00:51,149 --> 00:00:52,909 with what's going on with finances in the 23 00:00:52,909 --> 00:00:54,689 country, and and a lot more. 24 00:00:55,070 --> 00:00:56,929 Alan, I'm gonna tee it up for you. 25 00:00:57,390 --> 00:00:59,549 Give us a couple quick stories of what 26 00:00:59,549 --> 00:01:01,390 you're watching on the finance side and in 27 00:01:01,390 --> 00:01:02,449 health care today. 28 00:01:03,125 --> 00:01:04,825 Yeah. Absolutely. So, Scott, 29 00:01:05,284 --> 00:01:06,965 I think a couple of stories that I 30 00:01:06,965 --> 00:01:08,265 wanted to focus on today, 31 00:01:08,965 --> 00:01:12,104 focus kinda heavily on the revenue cycle space. 32 00:01:12,884 --> 00:01:14,724 Just kinda picking up on a few really 33 00:01:14,724 --> 00:01:16,344 big deals that we've seen recently 34 00:01:16,780 --> 00:01:19,180 and what's coming down the pipeline. So I 35 00:01:19,180 --> 00:01:20,799 think first and foremost, 36 00:01:21,260 --> 00:01:23,340 to to kick things off here with Big 37 00:01:23,340 --> 00:01:25,520 Big Deal just announced a report of yesterday 38 00:01:25,659 --> 00:01:26,299 at Becker's, 39 00:01:26,700 --> 00:01:29,180 hospital view on our CFO newsletter, also in 40 00:01:29,180 --> 00:01:30,555 our revenue cycle newsletter. 41 00:01:30,875 --> 00:01:32,254 And that's Tenet Healthcare, 42 00:01:32,715 --> 00:01:34,814 big for profits, essentially regaining 43 00:01:35,275 --> 00:01:36,174 full control 44 00:01:36,715 --> 00:01:39,375 of its revenue cycle management subsidiary 45 00:01:39,834 --> 00:01:41,534 that's Conifer Health Solutions, 46 00:01:42,314 --> 00:01:45,510 as Carbon Spirit, huge huge nonprofit system as 47 00:01:45,510 --> 00:01:48,329 we know, exits that joint joint venture completely. 48 00:01:48,469 --> 00:01:48,969 So 49 00:01:49,270 --> 00:01:50,870 big, big deal. We've seen a lot of 50 00:01:50,870 --> 00:01:52,250 move in the Carbon Spirit, 51 00:01:53,109 --> 00:01:55,209 restructuring, focus on its core assets. 52 00:01:55,990 --> 00:01:58,064 It's offloading a couple hospitals with key assets, 53 00:01:58,064 --> 00:02:00,224 and this is, essentially, a next step in 54 00:02:00,224 --> 00:02:01,825 in what we're seeing coming down the pipeline 55 00:02:01,825 --> 00:02:04,564 in Coniferous Spirit from a strategy standpoint. So 56 00:02:04,944 --> 00:02:07,424 Coniferous Spirit is gonna pay just short just 57 00:02:07,424 --> 00:02:10,064 short of $1,900,000,000 58 00:02:10,064 --> 00:02:10,724 to tennis 59 00:02:11,229 --> 00:02:12,689 over the next three years, 60 00:02:13,069 --> 00:02:15,949 while Conifer will pay about $540,000,000 61 00:02:15,949 --> 00:02:16,610 to CommonSpirit, 62 00:02:17,069 --> 00:02:19,889 essentially acquiring its 24% 63 00:02:20,270 --> 00:02:20,770 minority 64 00:02:21,069 --> 00:02:23,169 stake in the company. So 65 00:02:23,544 --> 00:02:26,444 Conifer will continue to provide revenue cycle services 66 00:02:26,504 --> 00:02:27,644 to common spirit 67 00:02:28,104 --> 00:02:29,944 throughout the 2026, 68 00:02:29,944 --> 00:02:32,584 but then once January 1 comes into play, 69 00:02:32,584 --> 00:02:34,905 that that that that partnership will be dissolved. 70 00:02:34,905 --> 00:02:35,405 So 71 00:02:36,150 --> 00:02:38,629 Tenet, as we know, been been offloading hospitals 72 00:02:38,629 --> 00:02:39,769 for quite some time. 73 00:02:40,310 --> 00:02:43,349 Again, this will really take 100% equity control 74 00:02:43,349 --> 00:02:45,289 of its Conifer Health solution subsidiary, 75 00:02:46,069 --> 00:02:46,569 essentially 76 00:02:46,870 --> 00:02:49,189 giving you a greater flexibility to support the 77 00:02:49,189 --> 00:02:50,329 long term growth 78 00:02:50,675 --> 00:02:51,814 of Conifer Health, 79 00:02:52,435 --> 00:02:55,254 really looking to bolster it by expanding investments 80 00:02:55,314 --> 00:02:56,854 in AI, in automation, 81 00:02:57,555 --> 00:02:59,735 really bolstering, strengthening its global, 82 00:03:00,275 --> 00:03:00,775 operating 83 00:03:01,074 --> 00:03:01,574 capabilities. 84 00:03:01,875 --> 00:03:04,769 So I I think Tenet is quite interesting, 85 00:03:04,769 --> 00:03:07,250 and I believe last year, the year before, 86 00:03:07,250 --> 00:03:09,830 it had sold about 14 hospitals for substantial 87 00:03:10,049 --> 00:03:10,549 substantial 88 00:03:11,330 --> 00:03:11,830 returns. 89 00:03:12,849 --> 00:03:13,750 What's interesting 90 00:03:14,129 --> 00:03:14,629 about 91 00:03:14,944 --> 00:03:17,425 some of those those hospital sales on tenant 92 00:03:17,425 --> 00:03:19,905 side is that it has structured some of 93 00:03:19,905 --> 00:03:21,605 those deals in a way that 94 00:03:22,145 --> 00:03:22,645 Conifer 95 00:03:23,185 --> 00:03:25,585 becomes the provider or continues to be the 96 00:03:25,585 --> 00:03:28,465 provider of revenue cycle management services to the 97 00:03:28,465 --> 00:03:30,165 hospitals that it sells. So 98 00:03:30,510 --> 00:03:31,650 Orlando Health acquired 99 00:03:32,030 --> 00:03:34,510 a bunch of, tenants hospitals last year. Kind 100 00:03:34,510 --> 00:03:36,270 of for it turns out to be the 101 00:03:36,270 --> 00:03:38,750 the exclusive provider revenue cycle management services for 102 00:03:38,750 --> 00:03:40,770 those hospitals, so on and so forth. 103 00:03:41,550 --> 00:03:43,230 One big deal, not over yet, but I 104 00:03:43,230 --> 00:03:45,884 think just announced as reported recently, we're gonna 105 00:03:45,884 --> 00:03:46,865 tune into tenant's, 106 00:03:47,324 --> 00:03:50,784 fourth quarter earnings call, I believe, next week, 107 00:03:50,925 --> 00:03:53,164 which no doubt that'll be a huge sticking 108 00:03:53,164 --> 00:03:55,164 point, a huge talking point. We kinda pull 109 00:03:55,164 --> 00:03:56,925 out a little a few more details on 110 00:03:56,925 --> 00:03:58,604 that deal. But big, big deal in the 111 00:03:58,604 --> 00:04:00,444 revenue cycle management space that I wanted to 112 00:04:00,444 --> 00:04:01,379 call out there, Scott. 113 00:04:02,180 --> 00:04:04,740 No. That's fascinating. And what drives some of 114 00:04:04,740 --> 00:04:07,300 that? What drives this this this going on? 115 00:04:07,300 --> 00:04:08,900 Talk a bit about that because I do 116 00:04:08,900 --> 00:04:11,300 think it's fascinating, and and thank you. Tell 117 00:04:11,300 --> 00:04:13,139 us a bit about what drives this this 118 00:04:13,139 --> 00:04:15,844 conifer common spirit tenant thing. But it seems 119 00:04:15,844 --> 00:04:17,845 like partially, they probably did the deal originally. 120 00:04:17,845 --> 00:04:20,084 Common spirit gets part of it. Common spirit 121 00:04:20,084 --> 00:04:22,245 promises through the revenue cycle with them. Common 122 00:04:22,245 --> 00:04:23,845 spirit's no longer to do the revenue cycle 123 00:04:23,845 --> 00:04:26,264 with them. So now common spirit ends up 124 00:04:26,725 --> 00:04:28,829 selling back their shares in Conifer. Is there 125 00:04:28,829 --> 00:04:30,269 any more detail? I mean, that's how a 126 00:04:30,269 --> 00:04:31,550 lot of these deals tend to work. I 127 00:04:31,550 --> 00:04:34,029 don't have details on that deal specifically. But 128 00:04:34,029 --> 00:04:35,629 is there any information out there on how 129 00:04:35,629 --> 00:04:37,729 this deal why this is going on? 130 00:04:38,750 --> 00:04:41,310 Yeah. I mean, absolutely. I think a bit 131 00:04:41,310 --> 00:04:43,754 more detail will be coming out, no doubt 132 00:04:43,754 --> 00:04:45,675 in the common spirit earnings call, the investor 133 00:04:45,675 --> 00:04:47,915 call coming up, and the tennis investor call 134 00:04:47,915 --> 00:04:50,175 coming up. I think this deal was 135 00:04:50,555 --> 00:04:53,675 going back as early as 2032 136 00:04:53,675 --> 00:04:55,754 before the common spirit big merger was in 137 00:04:55,754 --> 00:04:57,789 place. A A ten year contract just got 138 00:04:57,789 --> 00:05:00,029 over the line. So I think, again, common 139 00:05:00,029 --> 00:05:02,669 spirit with that minority stake around about 24% 140 00:05:02,669 --> 00:05:04,669 in the overall company. But I think from 141 00:05:04,669 --> 00:05:05,970 a strategic standpoint, 142 00:05:06,430 --> 00:05:09,550 really, really smart move on on tenant's part 143 00:05:09,550 --> 00:05:10,209 as well. 144 00:05:10,704 --> 00:05:13,745 Huge, huge investment in the outpatient space, offloading 145 00:05:13,745 --> 00:05:15,604 a lot of the inpatient hospitals, 146 00:05:16,064 --> 00:05:18,725 and really focusing on outpatient growth, ASCs. 147 00:05:19,185 --> 00:05:19,584 No doubt, 148 00:05:20,305 --> 00:05:21,845 Conifer is a huge, huge, 149 00:05:22,225 --> 00:05:24,064 subsidiary that is looking to grow as well 150 00:05:24,064 --> 00:05:26,639 as revenue cycle becomes more prominent, as AI 151 00:05:26,639 --> 00:05:29,759 becomes more deeply integrated, deeply embedded across revenue 152 00:05:29,759 --> 00:05:30,259 cycle. 153 00:05:30,639 --> 00:05:32,639 So no doubt some really interesting things to 154 00:05:32,639 --> 00:05:34,240 come there, and we'll we'll be tuning in 155 00:05:34,240 --> 00:05:36,080 in the in the upcoming earnings call to 156 00:05:36,080 --> 00:05:37,920 put out some more details for our audience 157 00:05:37,920 --> 00:05:38,580 as well. 158 00:05:39,574 --> 00:05:41,915 But I I think it ties nicely into 159 00:05:42,134 --> 00:05:43,574 the kinda the the next story that I 160 00:05:43,574 --> 00:05:45,095 wanted to touch on, Scott, as well as 161 00:05:45,095 --> 00:05:46,935 as you're kind of staying on the revenue 162 00:05:46,935 --> 00:05:48,235 cycle trend here. 163 00:05:48,854 --> 00:05:52,235 Community Hospital Corporation, this is a hospital company 164 00:05:52,535 --> 00:05:53,675 headquartered in Texas. 165 00:05:54,079 --> 00:05:56,000 They just today have announced that they're launching 166 00:05:56,000 --> 00:06:00,019 their own revenue cycle management company specifically targeted 167 00:06:00,160 --> 00:06:04,240 at helping rural and community hospitals. Companies called 168 00:06:04,240 --> 00:06:05,459 Options RCM, 169 00:06:05,920 --> 00:06:08,345 again, offering the the full spectrum of technology 170 00:06:08,345 --> 00:06:10,904 and services across the entire revenue cycle to 171 00:06:10,904 --> 00:06:12,764 rural providers, community providers. 172 00:06:13,225 --> 00:06:15,785 Hospitals can choose to opt in for support 173 00:06:15,785 --> 00:06:18,824 with specific functions, or they can go full 174 00:06:18,824 --> 00:06:21,145 outsource, outsource the entire revenue cycle to this 175 00:06:21,145 --> 00:06:21,645 company. 176 00:06:22,025 --> 00:06:24,740 I think this is quite an interesting development 177 00:06:24,740 --> 00:06:25,860 there, but it seems to be a bit 178 00:06:25,860 --> 00:06:27,539 of an emerging trend as there is such 179 00:06:27,539 --> 00:06:29,220 a big gap in the market here for 180 00:06:29,220 --> 00:06:31,399 revenue cycle emerging companies to help 181 00:06:31,779 --> 00:06:34,120 rural hospitals and providers specifically, 182 00:06:35,314 --> 00:06:37,795 going back to the CEO and CFO roundtable 183 00:06:37,795 --> 00:06:39,334 in November here in Chicago, 184 00:06:39,795 --> 00:06:41,395 I had the pleasure of sitting down with 185 00:06:41,395 --> 00:06:42,134 Chris Harrison, 186 00:06:42,915 --> 00:06:45,714 former CFO who's recently been the CEO of 187 00:06:45,714 --> 00:06:48,194 Quorum Health. So just for for listeners who 188 00:06:48,194 --> 00:06:50,455 might be, as well acquainted with the system, 189 00:06:50,810 --> 00:06:53,290 Quorum Health is a for profit system headquartered 190 00:06:53,290 --> 00:06:53,949 in Tennessee 191 00:06:54,410 --> 00:06:57,150 that was spun out of community health systems, 192 00:06:57,930 --> 00:07:00,350 a couple years before the pandemic. So 193 00:07:00,889 --> 00:07:02,990 Chris seemed to see that this, this 194 00:07:03,370 --> 00:07:05,389 Quorum Health is launching their own 195 00:07:05,745 --> 00:07:07,365 rural hospital MSO 196 00:07:07,745 --> 00:07:10,145 focused on on on revenue cycle management as 197 00:07:10,145 --> 00:07:12,705 well. So huge, huge part of Coram Health's 198 00:07:12,705 --> 00:07:13,524 growth strategy, 199 00:07:14,305 --> 00:07:15,524 launching this rural 200 00:07:15,824 --> 00:07:17,205 rural hospital MSO 201 00:07:17,584 --> 00:07:20,209 revenue cycle management company. I think 202 00:07:20,670 --> 00:07:22,670 the the the wider question and the wider 203 00:07:22,670 --> 00:07:24,529 backdrop against all this is, 204 00:07:25,230 --> 00:07:26,829 I think with a big look at what 205 00:07:26,829 --> 00:07:29,149 CMS has done with that $50,000,000,000 206 00:07:29,149 --> 00:07:33,149 rural health transformation fund, that's drawn significant interest 207 00:07:33,149 --> 00:07:33,649 from 208 00:07:34,024 --> 00:07:36,845 consultants, from vendors. So I think we're seeing 209 00:07:37,224 --> 00:07:39,805 tenants big move taken back a 100 Conifer 210 00:07:40,104 --> 00:07:43,064 Community Hospital Corporation launched their own revenue cycle 211 00:07:43,064 --> 00:07:45,464 management company. Quorum Health also launching their own 212 00:07:45,464 --> 00:07:47,870 revenue cycle management company. Those two companies 213 00:07:48,330 --> 00:07:50,590 specifically focused on rural hospitals, 214 00:07:51,050 --> 00:07:52,990 community hospitals, rural providers. 215 00:07:53,689 --> 00:07:56,090 So really interesting developments in there. No doubt 216 00:07:56,090 --> 00:07:58,170 we see rural hospitals in dire need of 217 00:07:58,170 --> 00:08:00,009 some support in this in this way, shape, 218 00:08:00,009 --> 00:08:02,454 or form and significant area of growth for 219 00:08:02,454 --> 00:08:04,074 for some of these companies as well. 220 00:08:04,694 --> 00:08:07,334 It's literally a fascinating discussion because there's two 221 00:08:07,334 --> 00:08:10,214 things that overlap there. One, we're seeing a 222 00:08:10,214 --> 00:08:12,875 lot of different consulting firms and organizations 223 00:08:13,639 --> 00:08:15,240 trying to chase some of this money that's 224 00:08:15,240 --> 00:08:17,399 going into rural health care under this new 225 00:08:17,399 --> 00:08:19,319 act. So we're seeing a lot of that. 226 00:08:19,319 --> 00:08:21,160 I can't even believe the amount of discussions 227 00:08:21,160 --> 00:08:23,560 of people trying to chase those dollars. That's 228 00:08:23,560 --> 00:08:25,419 not good or bad. Just observation. 229 00:08:26,120 --> 00:08:28,779 Second is revenue cycle in our insane 230 00:08:29,345 --> 00:08:30,485 health care system 231 00:08:31,104 --> 00:08:33,664 remains a huge business area as five to 232 00:08:33,664 --> 00:08:34,404 10% 233 00:08:34,865 --> 00:08:36,865 of all dollars allocated to health care somehow 234 00:08:36,865 --> 00:08:39,044 or another flow through the revenue cycle providers, 235 00:08:39,105 --> 00:08:41,470 revenue cycle operators, and the revenue cycle. So 236 00:08:41,470 --> 00:08:43,629 it remains a huge business in so many 237 00:08:43,629 --> 00:08:45,649 different ways. Just absolutely fascinating. 238 00:08:46,110 --> 00:08:47,950 Alan, anything else you wanted to comment on 239 00:08:47,950 --> 00:08:49,230 there? I I find the stuff with, 240 00:08:50,269 --> 00:08:52,450 the Conifer stuff to be fascinating. 241 00:08:53,230 --> 00:08:54,529 Community Health Corp 242 00:08:55,184 --> 00:08:57,205 launching a revenue cycle business, 243 00:08:57,664 --> 00:08:59,504 Quorum Health, which at one point was a 244 00:08:59,504 --> 00:09:01,825 subsidiary of Community Health Systems back in the 245 00:09:01,825 --> 00:09:04,304 day, doing whatever they're doing in rural. Just 246 00:09:04,304 --> 00:09:06,544 fascinating to see these different activities and different 247 00:09:06,544 --> 00:09:08,544 initiatives aimed at where some of the dollars 248 00:09:08,544 --> 00:09:09,205 are flowing. 249 00:09:09,959 --> 00:09:11,399 Yeah. I think you hit the nail on 250 00:09:11,399 --> 00:09:12,759 the head. Not not too much to add, 251 00:09:12,759 --> 00:09:14,839 but I think just the backdrop of the 252 00:09:14,839 --> 00:09:17,319 $50,000,000,000 rural health transformation fund, I think you 253 00:09:17,319 --> 00:09:18,939 hit the nail on the head there, Scott. 254 00:09:19,079 --> 00:09:20,839 Just as the last comment from Chris, who 255 00:09:20,839 --> 00:09:22,519 I spoke to recently, the the CEO of 256 00:09:22,519 --> 00:09:23,659 Quorum Health again, 257 00:09:24,424 --> 00:09:26,205 said that his goal, I guess, with this 258 00:09:26,584 --> 00:09:29,544 MSO, that's revenue cycle management based targeting rural 259 00:09:29,544 --> 00:09:32,184 providers, wants to build something that's by rural 260 00:09:32,184 --> 00:09:33,964 providers, for rural providers 261 00:09:34,345 --> 00:09:36,825 before some of those outside entities with maybe 262 00:09:36,825 --> 00:09:37,804 less mission alignment 263 00:09:38,139 --> 00:09:40,059 end up dominating that space. So it kinda 264 00:09:40,059 --> 00:09:41,179 seems like a bit of a race to 265 00:09:41,179 --> 00:09:43,100 the to to kinda get this thing started 266 00:09:43,100 --> 00:09:45,440 at the moment with that, rural health transformation 267 00:09:45,579 --> 00:09:47,419 fund. A lot of folks chasing the dollars 268 00:09:47,419 --> 00:09:49,579 there. Great observation on your part. So certainly 269 00:09:49,579 --> 00:09:51,500 interesting to keep behind this space over the 270 00:09:51,500 --> 00:09:52,605 next couple of quarters. 271 00:09:53,565 --> 00:09:55,584 And certainly a lot of rural CEOs 272 00:09:56,284 --> 00:09:58,365 concern that the money's gonna get scattered to 273 00:09:58,365 --> 00:10:00,704 so many different places and not really help 274 00:10:00,924 --> 00:10:03,324 rural systems and rural health care. There's we've 275 00:10:03,324 --> 00:10:04,845 heard a lot of that as well, those 276 00:10:04,845 --> 00:10:07,620 concerns. So just absolutely fascinating. Yeah. I wanna 277 00:10:07,620 --> 00:10:08,980 I wanna thank you for joining us today 278 00:10:08,980 --> 00:10:10,980 on the Becker's healthcare podcast. Thank you so 279 00:10:10,980 --> 00:10:13,299 much. Scott, it always a pleasure. Thank you 280 00:10:13,299 --> 00:10:13,960 so much.