Latest / Becker’s Healthcare Podcast / Revenue Cycle Shakeups and the Growing Focus on Rural Hospitals with Alan Condon

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Revenue Cycle Shakeups and the Growing Focus on Rural Hospitals with Alan Condon · Becker’s Healthcare Podcast

• 0:01
  Every year, Becker's annual meeting brings health care
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  leaders together to unpack the most pressing issues
• 0:06
  facing the industry.
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  And every year, those conversations shift in profound
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  and unexpected ways.
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  This April, more than 3,500
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  healthcare executives will return to Chicago
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  for Becker's sixteenth annual meeting.
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  Seven ninety five elite speakers will offer new
• 0:22
  lessons, new case studies, and predictions about what
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  comes next.
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  Join us April 13 through the sixteenth.
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  For the agenda and event details, visit beckershospitalreview.com
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  and click on the events tab in the
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  upper right.
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  This is Scott Becker with the Becker's Healthcare
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  Podcast.
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  I I'm thrilled today to be joined by
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  Alan Condon, editor in chief of Becker's Healthcare.
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  He does an incredible job of following what
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  is going on with systems in the country,
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  with what's going on with finances in the
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  country, and and a lot more.
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  Alan, I'm gonna tee it up for you.
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  Give us a couple quick stories of what
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  you're watching on the finance side and in
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  health care today.
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  Yeah. Absolutely. So, Scott,
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  I think a couple of stories that I
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  wanted to focus on today,
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  focus kinda heavily on the revenue cycle space.
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  Just kinda picking up on a few really
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  big deals that we've seen recently
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  and what's coming down the pipeline. So I
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  think first and foremost,
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  to to kick things off here with Big
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  Big Deal just announced a report of yesterday
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  at Becker's,
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  hospital view on our CFO newsletter, also in
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  our revenue cycle newsletter.
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  And that's Tenet Healthcare,
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  big for profits, essentially regaining
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  full control
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  of its revenue cycle management subsidiary
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  that's Conifer Health Solutions,
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  as Carbon Spirit, huge huge nonprofit system as
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  we know, exits that joint joint venture completely.
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  So
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  big, big deal. We've seen a lot of
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  move in the Carbon Spirit,
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  restructuring, focus on its core assets.
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  It's offloading a couple hospitals with key assets,
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  and this is, essentially, a next step in
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  in what we're seeing coming down the pipeline
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  in Coniferous Spirit from a strategy standpoint. So
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  Coniferous Spirit is gonna pay just short just
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  short of $1,900,000,000
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  to tennis
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  over the next three years,
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  while Conifer will pay about $540,000,000
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  to CommonSpirit,
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  essentially acquiring its 24%
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  minority
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  stake in the company. So
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  Conifer will continue to provide revenue cycle services
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  to common spirit
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  throughout the 2026,
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  but then once January 1 comes into play,
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  that that that that partnership will be dissolved.
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  So
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  Tenet, as we know, been been offloading hospitals
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  for quite some time.
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  Again, this will really take 100% equity control
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  of its Conifer Health solution subsidiary,
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  essentially
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  giving you a greater flexibility to support the
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  long term growth
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  of Conifer Health,
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  really looking to bolster it by expanding investments
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  in AI, in automation,
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  really bolstering, strengthening its global,
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  operating
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  capabilities.
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  So I I think Tenet is quite interesting,
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  and I believe last year, the year before,
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  it had sold about 14 hospitals for substantial
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  substantial
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  returns.
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  What's interesting
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  about
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  some of those those hospital sales on tenant
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  side is that it has structured some of
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  those deals in a way that
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  Conifer
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  becomes the provider or continues to be the
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  provider of revenue cycle management services to the
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  hospitals that it sells. So
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  Orlando Health acquired
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  a bunch of, tenants hospitals last year. Kind
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  of for it turns out to be the
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  the exclusive provider revenue cycle management services for
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  those hospitals, so on and so forth.
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  One big deal, not over yet, but I
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  think just announced as reported recently, we're gonna
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  tune into tenant's,
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  fourth quarter earnings call, I believe, next week,
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  which no doubt that'll be a huge sticking
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  point, a huge talking point. We kinda pull
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  out a little a few more details on
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  that deal. But big, big deal in the
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  revenue cycle management space that I wanted to
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  call out there, Scott.
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  No. That's fascinating. And what drives some of
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  that? What drives this this this going on?
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  Talk a bit about that because I do
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  think it's fascinating, and and thank you. Tell
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  us a bit about what drives this this
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  conifer common spirit tenant thing. But it seems
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  like partially, they probably did the deal originally.
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  Common spirit gets part of it. Common spirit
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  promises through the revenue cycle with them. Common
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  spirit's no longer to do the revenue cycle
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  with them. So now common spirit ends up
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  selling back their shares in Conifer. Is there
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  any more detail? I mean, that's how a
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  lot of these deals tend to work. I
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  don't have details on that deal specifically. But
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  is there any information out there on how
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  this deal why this is going on?
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  Yeah. I mean, absolutely. I think a bit
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  more detail will be coming out, no doubt
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  in the common spirit earnings call, the investor
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  call coming up, and the tennis investor call
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  coming up. I think this deal was
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  going back as early as 2032
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  before the common spirit big merger was in
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  place. A A ten year contract just got
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  over the line. So I think, again, common
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  spirit with that minority stake around about 24%
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  in the overall company. But I think from
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  a strategic standpoint,
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  really, really smart move on on tenant's part
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  as well.
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  Huge, huge investment in the outpatient space, offloading
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  a lot of the inpatient hospitals,
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  and really focusing on outpatient growth, ASCs.
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  No doubt,
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  Conifer is a huge, huge,
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  subsidiary that is looking to grow as well
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  as revenue cycle becomes more prominent, as AI
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  becomes more deeply integrated, deeply embedded across revenue
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  cycle.
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  So no doubt some really interesting things to
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  come there, and we'll we'll be tuning in
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  in the in the upcoming earnings call to
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  put out some more details for our audience
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  as well.
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  But I I think it ties nicely into
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  the kinda the the next story that I
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  wanted to touch on, Scott, as well as
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  as you're kind of staying on the revenue
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  cycle trend here.
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  Community Hospital Corporation, this is a hospital company
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  headquartered in Texas.
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  They just today have announced that they're launching
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  their own revenue cycle management company specifically targeted
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  at helping rural and community hospitals. Companies called
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  Options RCM,
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  again, offering the the full spectrum of technology
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  and services across the entire revenue cycle to
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  rural providers, community providers.
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  Hospitals can choose to opt in for support
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  with specific functions, or they can go full
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  outsource, outsource the entire revenue cycle to this
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  company.
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  I think this is quite an interesting development
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  there, but it seems to be a bit
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  of an emerging trend as there is such
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  a big gap in the market here for
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  revenue cycle emerging companies to help
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  rural hospitals and providers specifically,
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  going back to the CEO and CFO roundtable
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  in November here in Chicago,
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  I had the pleasure of sitting down with
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  Chris Harrison,
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  former CFO who's recently been the CEO of
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  Quorum Health. So just for for listeners who
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  might be, as well acquainted with the system,
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  Quorum Health is a for profit system headquartered
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  in Tennessee
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  that was spun out of community health systems,
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  a couple years before the pandemic. So
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  Chris seemed to see that this, this
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  Quorum Health is launching their own
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  rural hospital MSO
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  focused on on on revenue cycle management as
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  well. So huge, huge part of Coram Health's
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  growth strategy,
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  launching this rural
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  rural hospital MSO
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  revenue cycle management company. I think
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  the the the wider question and the wider
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  backdrop against all this is,
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  I think with a big look at what
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  CMS has done with that $50,000,000,000
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  rural health transformation fund, that's drawn significant interest
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  from
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  consultants, from vendors. So I think we're seeing
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  tenants big move taken back a 100 Conifer
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  Community Hospital Corporation launched their own revenue cycle
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  management company. Quorum Health also launching their own
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  revenue cycle management company. Those two companies
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  specifically focused on rural hospitals,
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  community hospitals, rural providers.
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  So really interesting developments in there. No doubt
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  we see rural hospitals in dire need of
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  some support in this in this way, shape,
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  or form and significant area of growth for
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  for some of these companies as well.
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  It's literally a fascinating discussion because there's two
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  things that overlap there. One, we're seeing a
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  lot of different consulting firms and organizations
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  trying to chase some of this money that's
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  going into rural health care under this new
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  act. So we're seeing a lot of that.
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  I can't even believe the amount of discussions
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  of people trying to chase those dollars. That's
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  not good or bad. Just observation.
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  Second is revenue cycle in our insane
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  health care system
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  remains a huge business area as five to
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  10%
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  of all dollars allocated to health care somehow
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  or another flow through the revenue cycle providers,
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  revenue cycle operators, and the revenue cycle. So
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  it remains a huge business in so many
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  different ways. Just absolutely fascinating.
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  Alan, anything else you wanted to comment on
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  there? I I find the stuff with,
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  the Conifer stuff to be fascinating.
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  Community Health Corp
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  launching a revenue cycle business,
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  Quorum Health, which at one point was a
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  subsidiary of Community Health Systems back in the
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  day, doing whatever they're doing in rural. Just
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  fascinating to see these different activities and different
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  initiatives aimed at where some of the dollars
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  are flowing.
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  Yeah. I think you hit the nail on
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  the head. Not not too much to add,
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  but I think just the backdrop of the
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  $50,000,000,000 rural health transformation fund, I think you
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  hit the nail on the head there, Scott.
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  Just as the last comment from Chris, who
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  I spoke to recently, the the CEO of
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  Quorum Health again,
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  said that his goal, I guess, with this
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  MSO, that's revenue cycle management based targeting rural
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  providers, wants to build something that's by rural
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  providers, for rural providers
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  before some of those outside entities with maybe
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  less mission alignment
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  end up dominating that space. So it kinda
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  seems like a bit of a race to
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  the to to kinda get this thing started
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  at the moment with that, rural health transformation
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  fund. A lot of folks chasing the dollars
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  there. Great observation on your part. So certainly
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  interesting to keep behind this space over the
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  next couple of quarters.
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  And certainly a lot of rural CEOs
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  concern that the money's gonna get scattered to
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  so many different places and not really help
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  rural systems and rural health care. There's we've
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  heard a lot of that as well, those
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  concerns. So just absolutely fascinating. Yeah. I wanna
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  I wanna thank you for joining us today
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  on the Becker's healthcare podcast. Thank you so
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  much. Scott, it always a pleasure. Thank you
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  so much.