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Becker’s Healthcare Podcast
AI, Value, and Consolidation in Healthcare with Alan Condon & Laura Dyrda
00:14:08
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- [00:01]
A
Exciting things are happening at Beckers Healthcare Stay ahead of industry trends with the new Beckers CFO plus Revenue Cycle Podcast your go to source for insights from top healthcare finance leaders. Tune in wherever you get your podcasts and don't miss the 10th annual Health IT Digital Health RCM Conference happening September 30 to October 3, 2025 in Chicago. Join thousands of executives, engage with industry leaders and explore the future of healthcare innov. Learn more about our upcoming events@beckershospitalreview.com See you there.
- [00:38]
B
This is Scott Becker with the Beckers Healthcare Podcast. I'm thrilled today to be joined by two of the most brilliant leaders of the Becker's healthcare editorial team, both Laura Dearda and Ellen Condon. They're going to share the stage today and each tell us a couple of the stories that Watching Closely in Healthcare Laura, want to ask you to tee it up first. First, what are you watching closely? What's top of mind currently that you're keeping an eye on?
- [01:03]
A
Absolutely. Well, thank you so much that I think, you know, there are so many things happening within the healthcare space today and really what I've been keeping a close, close eye on is a lot of the technology changes and things coming down the pipe. Whether it's looking at artificial intelligence, AI or some of the big changes that we've seen coming from epic, how they're looking at the future, building more AI tools internally that are going to be coming down the pipe. And so it's been fascinating to how those types of tools and technology are changing the way CIOs and C suites in general think about their tech strategy and what that could mean for the broader healthcare delivery and technology ecosystem moving forward. And then secondly, just looking at again, how hospitals and health systems are thinking through what value means for their organizations, how they're attacking, you know, not the traditional value based care, looking at those contracts, but more or less trying to understand what they're doing to bring value to patients, what that looks like, how they can define it differently. So they're bringing that quality element in in addition to making sure they've got the cost structure internally in place, that they're showing value for some of these initiatives and leveraging technology in a smart way, bringing more care outside of the hospital walls, shortening the length of stay as much as possible for different surgical procedures and really truly embr hospital at home strategy that will create a ton of savings and putting them in a better position to financially thrive in the future.
- [02:38]
B
Thank you. When you talk about the technology and the changes. How are health systems looking at this? Are they really starting to adopt the AI? Is there so much noise around it? What are you seeing in terms of, like, where do you hear people saying, yeah, this is really working? Or, God, there's so much talk about it, but we're still a ways away from getting it to really work for us how we want it to.
- [03:00]
A
Yeah, no, that's a great question. I think, you know, health systems, of course, are across the board on this, but there are a good number who want to be either the early or mid adopters with AI and technology because they see it as such a vital aspect of moving forward. I know in the past we've talked about some of the reports coming from Fitch and others mentioning technology adopters are going to be in a better financial position in the future just because they are more efficient, more connected, and the AI can be more smartly leveraged to support the workforce and become a tool that expands their capacity. Just because, you know, we're seeing a shortage of clinicians as well as those in the broader administrative workforce too. And so being able to expand the capacity of their team and accuracy of their team as well with some of the technology is a real competitive advantage. But, you know, there's definitely a lot of challenges with incorporating AI. You want to pick the right company, you want to pick the right partners so that, you know, as you're deploying the technology, it delivers on the value that was promised in the beginning, making sure it's easy for the team to incorporate into their broader workflows and, you know, rethinking those workflows that should be done differently and more efficiently. So you're not just putting technology on something that's broken in the first place. So I think there's a lot to think about there. I think health systems, too are definitely keeping a close eye on some of the risks with bringing in AI and moving too quickly with technology. If you're bringing in something that becomes obsolete in six months when a better technology is brought forth by a different company, or is something that EPIC is internally going to make available to them when they've already got investments within EPIC is just a really fascinating way to see how these companies or health systems are making decisions. And then secondly, you know, looking at the workforce, a lot of health systems are trying to become more AI literate for their entire workforce, figure out how they can bring the right learnings and workshops and whatnot to their broader workforce so that their teams understand the technology and are more or less become AI. Natives, basically, no matter what their age or demographic, so that they can leverage the technology. Because having the technology is only part of the challenge than actually getting it used correctly and being innovative with it is another story. It's a huge change management issues that I think a lot of health systems are feeling those growing pains if they didn't have that background and ability to provide AI education to their broader teams. The rollouts and integrations don't go as smoothly as they would have hoped.
- [05:53]
B
Thank you. And Alan, before I turn it to you to tell us about a story you're watching first, what question would you ask Laura as a follow up to what she's talking about with AI and technology that I failed to ask? What question do you have for Laura Derda?
- [06:07]
C
Yeah, absolutely. I think in recent conversations that I've been having with CFOs revenue cycle leaders, everybody's testing AI, everybody's looking at specifically in terms of the revenue cycle management area, how they're pushing back against payers and whatnot. The question that I would ask and the question that CFOs seem to be craving from their peers from other health systems is yes, there's a lot of buzz around AI. But show me the specific use case. Walk me through a case by case example of how are you implementing AI in the revenue cycle? What has your process been? What has the implementation been like training with staff and then ultimately what are the results? Give me a dollar figure. What are the cost to implement and I guess how are the results? How is it benefiting your organization? So I think that's one question really top of mind for CFOs across the board finance executives. And I imagine something we'll dive very deep into when we think about our upcoming CEO CFO roundtable and of course the health it, digital health and RCM conferences this fall effect.
- [07:13]
B
Thank you very, very much. And then Ellen, what is the top story that you're watching? I was following the stories this morning. 20 hospital closures so far this year, a big operating loss from Jefferson Health. What are some of the big stories that you're watching currently?
- [07:28]
C
Yeah, absolutely. I think to your point, unfortunately, one more hospital closure in California that we're seeing steady kind of rise throughout the year. One story been following closely and just got off the phone with a couple of CEOs in relation to President Trump's recent rollback of former President Biden's executive order on competition. So this could potentially have some far reaching implications for hospital consolidation, strategic mergers, acquisitions. Myself and my colleague Kelly Gooch folks with multiple CEOs on what they think about this executive order, how it will affect their organization, their markets. The impact here seems to be CEO split on how this can really impact their organizations. Obviously when we think about state and federal regulators, but some hospital executives see the move as a green light for growth and regional alignment, potentially for some hospital health systems. But on the other side of the coin, other executives remain skeptical, warning that systemic challenges, when we think about payer leverage to maybe uneven regulation at this point, state and federal levels, some of these systemic challenges still pose roadblocks to meaningful change. So I guess just a quick background on that executive order, it was issued by 2021 by President Biden essentially instructed federal agencies, federal regulators to take a more aggressive stance against consolidation across industries, including health care, so specifically the hospital health systems. That meant increased scrutiny of mergers, of acquisitions, larger oversight of hospital consolidation and some new rules designed to limit what the Biden administration saw as potentially anti competitive practices by payers, by providers. And then when we think about the repeal by President Trump, essentially that will ease regulatory pressure on some mergers, affiliations again across industries, but particularly for health care, we might see smaller or regional deals that don't raise immediate antitrust concerns. Might have a quicker pathway, less red tape to get over the finish line. But certainly interesting to see as we think about the financial pressure, financial headwinds that hospitals are continuing to face in the coming years, how that might affect potentially an uptick in deal activity and deal volumes in the coming quarter. So something we'll be paying close attention to.
- [10:04]
B
Thank you very very much. And then Laura, is your Alan talk about these issues and regulations and other kinds of issues and payer changes. Do you have a question you would ask Alan?
- [10:14]
A
Yeah, absolutely. I think Alan is just fascinating to hear all of this and see how the CEOs are split on the opinions for the executive order and looking at competition. My question for you is as you think about of course the current regulatory environment and a lot of these deals, you know, having easier time going through, do you think there will be more national health systems? Do you think we'll get to a point where there's just a few very big systems and a lot of small regional or how do you see some of this unfolding in the broader national healthcare landscape?
- [10:50]
C
Yeah, that's a great question and something I'd love to dive into. I think I actually recently spoke with Northwell's CEO at stepping Down Now, Michael Dowling, on that exact topic, that exact question. I think that's a question that hospital health system CEOs are quite split on as well. But Michael down had some interesting talk here. Of course Northwell, with their recent merger with new Vance Health, we're seeing a lot of these regional multi state mergers across the country popping up. We'll go back to 2021 with Advocate Health. We look at what Stanford Health has done with Marshall Clinic, a couple of examples there. But Michael Dowling seems to think that we fast forward 5, 10 years or so seems to be consolidation or ramp up when we think about the financial challenges. Also we look at the economy to scale, see that will be less, less smaller independent health systems, hospitals and we'll have a multitude of large national regional players really being dominant forces in the landscape. Other CEOs have different perspectives on that. And of course there's a whole little kettle of fish on the benefits, the potential disadvantage of, of these large national regional players when it comes to competition, access to care and whatnot. But the only other thing I'd add, I think with these potentially less enforcement of M and A deals in the hospital landscape, we do know that more hospitals, given the financial challenges, particularly on the rural side, the independent side, are looking for a strategic partner, whether it be through a merger, an acquisition or whatnot. But I think on the other hand of the spectrum health systems are less likely, less inclined to take on distressed financially distressed assets or hospitals given the variety of challenges that they're already kind of dealing with. So it's an interesting dichotomy here, but I think certainly interesting to pay attention in the coming quarters to see how this recent revocation of that executive order will indeed have an impact on mergers and acquisitions in health care.
- [12:51]
B
I think just absolutely fascinating. Just by the, just the loss of a certain amount of hospitals, of independent hospitals, you're moving more and more towards systems with bigger footprints compared to small independent systems. Just more and more independent systems are having trouble. Fascinating. And we'll see. I mean there's always been this talk about we're going to get down to 20 big systems, 10 big systems, yet there still remains lots of big regional systems. And we'll see. But another story today about Hackensack Meridian trying to go national. So I guess it remains to be seen it's been a prediction for a long time, but hasn't come to play in some of the largest national nonprofit systems, you know, still find it difficult financially because they're playing in all kinds of different neighborhoods and very challenging. So we'll see.
- [13:33]
C
Absolutely. And I think again I think to your point, Scott, we've seen such a big uptick in those regional national players across the road. But I think big question surrounding, to your point, what does that mean for the independent hospital, the rural independent hospitals, interest in economy. Interesting point in healthcare at the moment, but certainly a lot of challenges, but a lot of opportunity out there as well.
- [13:54]
B
Laura and Alan, thank you so much for joining us. Just a great pleasure to visit with both of you. Literally. Fantastic. Thank you very much.
- [14:03]
A
Thanks, Scott.
- [14:04]
C
Always a pleasure. Thank you.