Consumer Confidence, Hospital Closures, and Key Industry Battles with Alan Condon

Summary

Becker’s Healthcare Podcast Summary

Episode: Consumer Confidence, Hospital Closures, and Key Industry Battles with Alan Condon
Release Date: August 8, 2025
Host: Scott Becker
Guest: Alan Condon, Editor in Chief of Becker’s Healthcare

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Introduction

In this insightful episode of the Becker’s Healthcare Podcast, host Scott Becker engages in a comprehensive discussion with Alan Condon, the esteemed Editor in Chief of Becker’s Healthcare. The conversation delves into pressing issues affecting the U.S. healthcare landscape, including consumer confidence's impact on hospital volumes, competitive tensions between major healthcare systems, recent changes in CMS payments, and the alarming trend of hospital closures.

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1. Consumer Confidence and Hospital Volumes

Key Discussion Points:

• Impact of Consumer Confidence: Alan Condon highlights how consumer confidence is a pivotal factor influencing hospital volumes, particularly in relation to elective and high-cost surgical procedures.
• Divergent Views Between Healthcare Systems: Condon contrasts the perspectives of HCA Healthcare and Community Health Systems (CHS) based on their recent Q2 earnings calls.

Notable Insights and Quotes:

• Minimal Impact on HCA: “HCA sees minimal impact from consumer confidence,” Condon explains, indicating that HCA Healthcare’s diversified patient base shields it from significant fluctuations in care utilization (00:57).

• CHS Faces Headwinds: In contrast, CHS is experiencing a “pretty significant headwind” due to declining consumer confidence, leading to reduced surgical volumes, especially in orthopedics (00:57).

• Economic Factors Affecting CHS: “Patients with high deductible plans, larger co-pays, especially those in maybe exchange-based coverage, appear to be delaying or maybe deferring some of that care,” notes Condon, underscoring the financial barriers that discourage patients from pursuing elective surgeries (02:15).

• Optimism for the Future: Despite current challenges, CHS remains optimistic. “Consumer demand, that consumer confidence will return like it always does once those economic conditions improve,” Condon states, emphasizing strategic investments to be ready for increased volumes post-recovery (03:00).

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2. Competitive Tensions in North Carolina: HCA vs. Advent Health

Key Discussion Points:

• Turf War Over Hospital Expansion: The episode explores the ongoing competition between HCA Healthcare and Advent Health in Western North Carolina, focusing on Advent Health's attempt to build a new hospital in Weaverville.

Notable Insights and Quotes:

• Legal Battle Outcome: “The North Carolina Supreme Court just ruled in HCA's favor to essentially put a halt on the bill,” Condon reports, indicating that Advent Health's expansion plans are currently on hold (04:22).

• Implications for the Region: Condon remarks, “It just could have potential wider ramifications, not just for growth con disputes in that region, but potentially on a regional basis,” suggesting that the court's decision may influence similar competitive disputes elsewhere (05:00).

• Impact on Advent Health's Expansion: The halt affects the construction of a “67-bed hospital in Weaverville,” which has been a significant part of Advent Health’s growth strategy (04:22).

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3. CMS Payment Changes

Key Discussion Points:

• Final Rules Released: Alan Condon discusses the recent final rules issued by the Centers for Medicare & Medicaid Services (CMS) concerning payments to various healthcare facilities.

• Modest Payment Increases: The most notable change is the 2.6% increase in inpatient hospital payments for 2026, which has garnered significant attention.

Notable Insights and Quotes:

• Hospital Response: “The immediate reaction... is that those hospital payments... are seen as really inadequate,” Condon explains, referencing the dissatisfaction from the American Hospital Association and other national hospital lobbies (06:15).

• Financial Challenges: Condon connects the payment increases to the broader financial struggles faced by hospitals, including “current economic climate” pressures and anticipated Medicaid cuts (06:45).

• Expected Pushback: “Unsurprisingly, American Hospital Association... pushing back against what they see is really inadequate payment increases,” he continues, highlighting the tension between CMS and hospital stakeholders (07:00).

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4. Alarming Trend of Hospital Closures

Key Discussion Points:

• Recent Closure of St. Luke’s Des Perez Hospital: The episode mourns the closure of another hospital, marking a troubling pattern in 2025.

• Cumulative Closures: As of August 2025, a total of 19 hospitals have closed this year, matching the number from all of 2024.

Notable Insights and Quotes:

• Impact on Communities: “When we look at some of these communities, particularly those are more rural, underserved communities,” Condon emphasizes the disproportionate effect of closures on vulnerable populations (08:27).

• Ease of Comparison to Previous Years: “We're around about as of August 2025, we've seen pretty much the same number of hospital closures for the entire year of last year,” he notes, indicating no significant improvement in the situation (08:32).

• Future Outlook: Given ongoing challenges such as layoffs and budget cuts, Condon warns, “it might be likely that we may see a few more hospital closures this year,” reflecting concerns over the sustainability of independent hospitals (08:45).

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Conclusion

The episode wraps up with Scott Becker expressing concern over the array of challenges facing the healthcare industry, from fluctuating consumer confidence and competitive legal battles to inadequate CMS payments and increasing hospital closures. Alan Condon provides a sobering yet insightful analysis, underscoring the resilience required by healthcare systems to navigate these turbulent times. The discussion serves as a crucial update for healthcare professionals and stakeholders aiming to stay informed about the evolving dynamics in U.S. healthcare.

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Key Takeaways:

• Consumer Confidence: A critical determinant of hospital volumes, with varying impacts across different healthcare systems.
• Competitive Dynamics: Legal and strategic battles between major healthcare entities like HCA and Advent Health can shape regional healthcare landscapes.
• CMS Payment Policies: Incremental payment increases may not suffice to alleviate financial strains on hospitals, potentially leading to increased tensions with regulatory bodies.
• Hospital Closures: A persistent and growing concern, particularly impacting rural and underserved communities, with no signs of abating in the near future.

For more detailed discussions and updates, listeners are encouraged to tune into future episodes of the Becker’s Healthcare Podcast.

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Timestamps

• Consumer Confidence Impact: 00:57 - 03:19
• HCA vs. CHS Analysis: 00:57 - 03:19
• North Carolina Competition: 04:22 - 07:35
• CMS Payment Changes: 04:22 - 07:35
• Hospital Closures: 07:35 - 09:13

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Note: The timestamps correspond to the segments within the podcast transcript provided.

Transcript

[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 at BeckersHospitalReview.com See you there.

[B]

This is Scott Becker with the Beckers Healthcare Podcast. I am thrilled today to be joined by brilliant Editor in Chief Alan Condon and Alan Condon. Alan joins us regularly to talk to us about a few of the top stories that he's watching in healthcare. Alan, let me tee it up and ask you to take it away. What are a few of the top stories you're watching currently?

[C]

Yeah, great to be back on with you Scott. I think a couple stories are following closely and I think now that we've had the the Q2 results in the books and the earnings calls from the executives at the large for profit systems, hca, chs, tenant uhs. I think one one key trend that was brought up on multiple occasions on a couple different earnings calls was how consumer confidence is impacting or not impacting hospital volumes at some of these systems. So I think specifically calling out hca, Healthcare and community health systems on this, they offered contrasting differing interpretations of how consumer confidence is shaping care utilization, especially for surgical procedures with high out of pocket costs. So I think while both systems are monitoring hair mix and volume trends, HCA sees minimal impact from consumer confidence, whereas CHS on the other hand sees it as a pretty significant headwind. So just kind of polling out a couple of trends, tips and quotes from those earnings calls. CHS reported some real softness in its surgical volume, particularly in orthopedics, which executives said tied to declining consumer confidence and tightened household budgets. Given the current economic climate, patients with high deductible plans, larger co pays, especially those in maybe exchange based coverage, appear to be delaying or maybe deferring some of that care. Elective surgeries, high acuity surgeries, particularly in orthopedics. As I said, according to CHS CFO Kevin Hammonds, who will soon be taking on the CEO role at CHS when Tim Hington steps down. I think despite some of this short term pressure, CHS did remain optimistic that that consumer demand, that consumer confidence will return like it always does once those economic conditions improve. But HCA and CHS did both really align on that strategic investment and really system readiness will be critical to capturing that returning volume once that consumer confidence does start to rebound. So HCA not seeing a big impact on this, but CHS really called it out on multiple occasions in terms of its declining volumes.

[B]

You know, CHS is in some tougher communities, I assume both not so much necessarily urban but more rural communities that are really probably very Medicaid reliant or HCA is more diversified and probably doesn't feel as much of that. It feels like Is it a fair statement or what's your sense?

[C]

Yes, I think fair statement. I think especially just be interested to monitor that context, those trends, monitoring that when we see the Q2 reports come out of some of the nonprofit systems to your point, some of those that might be operating in more Medicaid heavy payer mixes, rural safety net communities wondering if they're also seeing similar trends that CHS reported in some of those dwindling volumes as it relates to some of those higher acuity care such as orthopedics and whatnot.

[B]

Thank you very very much, Alan. Anything else you're watching closely in terms of trends you're watching in healthcare currently. I know you recently wrote a long piece about recent changes in CMS payment. I think 15 things to know. Anything specifically that that sticks out to you?

[C]

I think CMS payments. I'll jump to that in one quick second. I think one other story I wanted to call on just in terms of while we're on the HCA topic, I think we've been following this for quite a while and it's been a real back and forth push and pull in terms of competition growth in western North Carolina. That's HCA Healthcare and Advent Health big for profit system push pull against a big nonprofit system, Advent Health, of course in multiple states as well. But HCA and AdventHealth really this kind of a turf war over the last couple of years over Advent Health's certificate of need approval to build a 67 bed hospital in Weaverville, North Carolina. I believe huge area of growth, population growth, economic growth. Mission Health, of course a big subsidiary of HCA Healthcare operates in that community and that market has been pushing back and the North Carolina Supreme Court just ruled in HCA's favor to essentially put a halt on the bill. The construction of an Advent Health hospital there. Siding with HCA again in this big push pull battle against Advent Health really trying to curtail the the nonprofit health systems growth in that area. The latest we have, it's A big con decision essentially with the North Carolina Supreme Court put a hold of the advent health expansion. While it reviews the con, reviews the legal proceedings here, it just could have potential wider ramifications, not just for growth con disputes in that region, but potentially on a regional basis. More to come on what the definitive will be the hospital that already broken ground it's been pulling along for quite some time that's been put a halt on while proceedings move through the courts. But an interesting quick little update there on a story that we've been following for quite some time, Scott. But I think to quickly jump to CMS dropping some final rules. They recently released final rules for various inpatient rehab facilities, hospices, psychiatric facilities. The inpatient hospital rule was also released. A number of shifts there across the board. I think the major one is that just small meager increases for hospital payments. I believe 2.6% increase for inpatient hospitals in 2026. The immediate reaction, not unsurprisingly from American Hospital association, other national hospital lobbies, is that those those hospital payments, given the current financial challenges that hospitals are seeing across the board, given the current economic climate and what we see in terms of Medicaid cuts coming down the pipeline in the next coming years, unsurprisingly, American Hospital association hospitals pushing back against what they see is really inadequate payment increases, especially when we look at all the challenges we're seeing on the payer side of things. But I think that's the major trend that we've seen for recent years, I think to be expected. But again, unsurprising reaction from the American Hospital Association. That's kind of the major takeaway from the inpatient hospital final rule?

[B]

I would say no 100%. Ellen, anything else you're following closely that you wanted to share with us today? And thank you very, very much.

[C]

I think that the last quick story I would say is just one one more hospital closure, unfortunately, just over the weekend. That's St. Luke's Des Perez Hospital in St. Louis, Missouri, officially closed first. Again, I think that's another another hospital closure in 2025. I believe that takes us up to 19 for the year. Many of those were independent hospitals. Twelve health systems have closed hospitals so far this year. So just concerning trend, when we look at some of these communities, particularly those are more rural, underserved communities. But that's the latest hospital closure, unfortunately, in a series of hospital closures this year that we've reported on.

[B]

And how does that look compared to years past, that number of hospital closures?

[C]

I believe if I'M not mistaken. We've covered 2024. I believe we saw 18 hospital closures, if I'm not mistaken. So we're around about as of August 2025, we've seen pretty much the same number of hospital closures for the entire year of last year. So if some of these trends, some of these challenges, layoffs and cuts are seen across the board, it's unfortunately, it might be likely that we may see a few more hospital closures this year when we look at the landscape and some of the challenges we continue to see across the board.

[B]

Alan, thank you so much. Very alarming. Let's hope it gets better. Thank you again for joining us at the Beckers Healthcare podcast. You're as good as they come. Thank you very, very much.

[C]

Thank you so much, Scott.