Rethinking Healthcare Strategy with a Portfolio Mindset

Summary

Podcast Summary: Rethinking Healthcare Strategy with a Portfolio Mindset

Becker’s Healthcare Podcast
Episode: Rethinking Healthcare Strategy with a Portfolio Mindset
Release Date: July 24, 2025
Host: Erica Spicer Mason
Guests: Chris Blohm and Courtney Madanik, Managing Directors and Co-Practice Leads for Mergers and Acquisitions at Kaufman Hall, A Vizient Company

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Introduction

In the episode titled "Rethinking Healthcare Strategy with a Portfolio Mindset," Erica Spicer Mason engages in a profound discussion with Chris Blohm and Courtney Madanik from Kaufman Hall, a Vizient company. Both guests bring over a decade of experience in healthcare mergers, acquisitions, and financial advisory, offering listeners invaluable insights into optimizing healthcare operations amidst current financial and operational challenges.

Understanding Roles and Expertise

Erica Spicer Mason begins by welcoming her guests and setting the stage for a deep dive into healthcare operational strategy and transformation.

Courtney Madanik introduces herself, emphasizing her 15-year tenure at Kaufman Hall, focusing on mergers and acquisitions alongside capital markets, specifically within the healthcare sector.

"Kaufman hall is a vizient company and so we provide consulting services for healthcare services clients."
— Courtney Madanik [00:50]

Chris Blohm complements Courtney’s introduction by highlighting his 12 years at the firm and his role in leading the M&A practice, which adopts a holistic approach to merger, acquisition, and partnership advisory.

"We take a pretty holistic approach and work collaboratively with our colleagues across the firm."
— Chris Blohm [01:59]

The Importance of a Holistic Portfolio Assessment

Erica sets the conversation into motion by addressing the volatile financial landscape of hospitals and the necessity for health systems to reassess their operations comprehensively.

Courtney Madanik underscores the importance of avoiding reactive strategies. Instead, she advocates for a portfolio-based assessment that evaluates business units and service lines collectively.

"We really believe that the best practice is, and, you know, it's always within the boundaries of having bandwidth and resources, but to assess everything sort of together in more of a portfolio fashion."
— Courtney Madanik [02:50]

She elaborates on assessing performance, market landscape, future expectations, and integrating operational and clinical factors into the strategic decision-making process.

Collaborative Cross-Functional Leadership

Erica transitions the discussion to the necessity of collaboration across various leadership domains when reshaping business areas.

Chris Blohm builds upon Courtney’s points by emphasizing the need for a shared strategic vision backed by strategic and financial planning. He highlights that avoiding silos requires collaboration, transparency, and a data-driven approach.

"Without that, data driven operational baseline leaders risk investing or under investing and underperforming or misaligned assets or services, opportunities may escape them."
— Chris Blohm [07:10]

Chris further explains that achieving transformational change hinges on integrating perspectives from finance, operations, legal, and clinical teams to ensure compliance, cost-effectiveness, and clinical viability.

Practical Application: The Outreach Lab Example

To illustrate the discussed concepts, Courtney Madanik provides a tangible example involving an Outreach Lab business unit. She details the multi-faceted evaluation process involving financial assessments, operational input, clinical considerations, and legal compliance.

"One example might be that I might use is from one of the business units transactions that we've been seeing a lot these days, which is Outreach lab."
— Courtney Madanik [09:55]

This example demonstrates how financial viability, patient access, and legal structuring interconnect to inform strategic decisions, emphasizing the iterative nature of portfolio management.

Chris Blohm adds that this rigorous approach is applicable to various service lines beyond laboratories, such as urgent care or ambulatory services, advocating for thoughtful consideration of whether to partner or remain internal.

"You could apply to any other service line, whether it's urgent care, ambulatory hospice, home care, durable medical equipment, physician, even physician practice."
— Chris Blohm [13:14]

Mindset Shifts for Healthcare Leaders

As the conversation nears its conclusion, Erica asks the guests to distill their discussion into key mindsets or strategies for healthcare leaders.

Chris Blohm highlights the necessity for leaders to embrace continuous reconfiguration and evaluation of their portfolios, rather than viewing restructuring as a one-time event. He advocates for flexibility, resilience, and openness to various operational models.

"Leaders need to be open to continuous reconfiguration and evaluation of their portfolio."
— Chris Blohm [15:12]

Courtney Madanik complements this by urging leaders to adopt fresh perspectives, challenging teams to reassess strategies in light of rapid changes in the healthcare environment.

"Challenge yourselves and your teams to look at all of this through a fresh lens because some of the perspectives that we had one, two, five or more years ago may be just totally different in today's environment."
— Courtney Madanik [17:06]

Chris Blohm concludes with a call to action, encouraging organizations to map their operational portfolios against their strategic objectives continuously.

"Mapping your operational portfolio and service lines against your objectives and future state strategy and being really thoughtful... and execute and do so continuously."
— Chris Blohm [18:14]

Conclusion

Erica wraps up the episode by acknowledging the depth of insights shared by Chris and Courtney, reinforcing the value of adopting a holistic, data-driven, and flexible portfolio mindset in healthcare strategy. She thanks the guests and encourages listeners to explore more episodes for continued learning.

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Key Takeaways:

1. Holistic Portfolio Assessment: Evaluate all business units and service lines collectively to understand their performance and interdependencies.

2. Cross-Functional Collaboration: Foster collaboration among financial, operational, legal, and clinical leaders to ensure comprehensive and effective strategic decisions.

3. Continuous Evaluation: Embrace a mindset of ongoing portfolio reconfiguration to adapt to the ever-evolving healthcare landscape.

4. Data-Driven Decisions: Utilize empirical data to inform strategic choices, avoiding reliance on outdated assumptions or qualitative judgments alone.

5. Executive Sponsorship: Ensure that a dedicated executive sponsor oversees transformational initiatives, making decisive go/no-go decisions based on integrated insights.

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This episode serves as a crucial guide for healthcare leaders navigating the complexities of operational strategy, emphasizing the necessity of a portfolio mindset to drive sustainable success in a challenging environment.

Transcript

[Erica Spicer Mason]

Hello everyone. This is Erica Spicer Mason with Becker's Healthcare. Thank you so much for tuning into the Becker's Healthcare podcast series. So today we're going to talk about healthcare operational strategy and transformation. And joining me for this discussion are two leaders from Kaufman Hall, A Vizzy and company. Both leaders are managing director and co practice leads for mergers and acquisitions. And so we have with us Chris Blohm and Courtney Madanik. Courtney Chris, welcome. Thank you so much for making time for the podcast today.

[Courtney Madanik]

Thanks for having us.

[Chris Blohm]

Thanks for having us. Happy to be here.

[Erica Spicer Mason]

Great to have you with us. And I thought before we get started, it might be helpful for our listeners to learn just a little bit more about you both, your role, your organization, whatever you think would be helpful for them to know going into this conversation on operations. Courtney, maybe you can have us get started on intros.

[Courtney Madanik]

Sounds good. Appreciate the tee up in the intro here. As you mentioned, I'm Courtney Medanick, the co lead of M and A here at Kauffman Hall. Kauffman hall is a vizient company and so we provide consulting services for healthcare services clients. I've been with Kauffman hall just shy of 15 years and I've been working in M and A and capital markets together with my time at Kauffman hall for over 25 with a focus on health care for the last 15 years or so.

[Chris Blohm]

Chris Chris Blohm, the other co practice lead in M and A. I've been at the firm for 12 years, been practicing healthcare, M and A and corporate finance advisory for 20 plus. And as Courtney mentioned, Kauffman hall is a holistic healthcare financial and strategic advisory firm. We co lead the M and A practice. The M and A practice focuses on merger, acquisition and partnership advisory for our clients. We take a pretty holistic approach and work collaboratively with our colleagues across the firm.

[Erica Spicer Mason]

Fantastic. Chris, Courtney, welcome again and thank you both for the background. You both have a lot of experience, not just it sounds like in the field of healthcare, but just from a financial perspective. You've seen a lot of changes and shifts in the decade plus that you've been with Kauffman Hall. I'm excited to get your expertise because it is a very challenging time and a volatile time in terms of hospital finances and we know that health systems are under a lot of pressure right now to really rethink every part of their operations. So Courtney, I'm hoping you can get us started with this first question. When systems are looking at whether to invest, divest or maybe even optimize a service line or another business area. What are the key factors that you think leaders should assess first, and why is that initial assessment so important?

[Courtney Madanik]

Sure. Appreciate the question. You know, I would say first and foremost, it's really important that the work not be done in a vacuum, you know, over the last five or so years, given the large amount of disruption and strong headwinds in this space, it's tempting to get into the habit of being in reactive mode and reacting to a trend or emerging opportunity. You may hear, you know, a large announcement in one space or another and sort of say, oh, I'm interested in looking at that business unit or service line for some sort of a transaction. But we really believe that the best practice is, and, you know, it's always within the boundaries of having bandwidth and resources, but to assess everything sort of together in more of a portfolio fashion and think about the business units, offerings, and access points holistically. So in this environment that is, you know, constantly evolving, it seems like the only thing that's consistent is that it's changing. The continuum of care continues to shift. And so it's important to think about the interplay between these offerings and business units. So, you know, for example, if we're. We may be feeling space constraints in certain inpatient facilities, and so, you know, the sort of next step from that might be to enhance the amount of inpatient access points that you have. But if you're thinking about this again, holistically, there may be ambulatory strategies that are better aligned with the most contemporary care delivery approaches. But, you know, drilling down one level deeper, when we do this work with clients, we really assess several things. And, you know, in some ways this is sequential, but it's really iterative as well. And that is first and foremost, maybe not surprising, is to look at the performance of business units and see how they're impacting our overall results. We often find this might be surprising, but we find that organizations, even really large, really sophisticated systems, don't fully have a command of the performance of these business units or the trajectory of certain lines of business. There might be, you know, outdated or, you know, heuristics used, and folks think, oh, you know, XYZ business unit is really profitable. It's always been profitable. And that may be a little bit of an outdated view of things. So getting a line of sight on where performance is and really where the trajectory is is important. We also need to assess the market landscape. Not surprising. Thinking about expectations for the future. And again, in this Ever evolving landscape. What are we thinking right now about the future of, you know, some of these business units or offerings and other external factors as well. And wrapping around all of this is really a data driven approach to pull all these factors together and assess the optimal strategic alternative. Again, this is an iterative approach because you're going to be thinking about all of your moves holistically. And although my comments have been mostly focused on financial and strategic factors, and I know this is sort of where our discussion is going to go to, it's important to think about operational and clinical factors as well. Those are going to be of critical, critical importance, particularly for our mission driven clients. And those are table stakes. So if the chosen strategy isn't feasible from a clinical or operational perspective, it's really a non starter.

[Erica Spicer Mason]

Courtney, I really appreciate how you outlined kind of this holistic view that Kauffman hall takes and that your team takes when helping clients get this initial assessment of their operations. So it sounds like it's really important to look at the performance of business units, especially because I loved your point about how sometimes there can be outdated ideas or perceptions of how certain areas are performing. Getting a really solid understanding of the market landscape, expectations for the future, and then ensuring that folks are using a data driven approach that's iterative. Really helpful way to kick off this conversation. So thank you Courtney and Chris, I wanted to turn it over to you next. In Courtney's response, she had mentioned that it's really important to not do this work in a vacuum essentially, and that change rarely happens in silos. So from your point of view, how can legal, financial, operational leaders, you know, folks across the spectrum, how can they collaborate more effectively when they're reshaping areas of the business or care?

[Chris Blohm]

No, it's a great question and building upon why the operational assessment and just an evaluation of one's portfolio and business is so important. It sets the foundation for strategic clarity for the organization. And without that, data driven operational baseline leaders risk investing or under investing and underperforming or misaligned assets or services, opportunities may escape them, opportunities to restructure, opportunities to grow may be missed. And an organization, health system or otherwise may conversely chase growth areas that don't strengthen the long term viability. How do you avoid silos and affect transformational change? It really does start with that shared strategic vision supported by a strategic and financial plan. That shared strategic vision needs to have defined goals and objectives and constraints, a unified purpose for that transformation, whether that be patient access, cost reduction, financial stability, clinical, operational, a Management team needs to holistically look at what capabilities and resources it has and doesn't have and whether or not they can access those resources internally or seek a partner. And as you mentioned, Erica, that requires cross functional planning and leadership. Finance leader needs to figure out the financial impacts and realities, Operational leader needs to manage the resource allocation. Even legal upfront should anticipate regulatory guidelines and constraints, requirements, etc. So to execute all of that requires collaboration, transparency, coordination, and back to it. Not to overstate it, but data and information. Not to do it anecdotally or even qualitatively, but to add a quantitative and empirical rigor to it. And only by integrating all those perspectives cross functionally across leadership can change be not only executed, but executed in a compliant, cost effective and clinically viable way.

[Erica Spicer Mason]

Really great points, Chris, appreciate that. And you know, when I hear about sharing a strategic vision that's supported by these intentional plans with defined goals, objectives, constraints, as you mentioned to me and probably to some other people listening, it sounds, it makes so much sense. But also I think it can be hard to visualize what that looks like in action. So could you share an example of when you've seen that approach work well and the factors that really drove that success?

[Courtney Madanik]

Sure. So no, it's a great point and I was thinking the same thing. I know that if you're reflecting on some of our comments and we're talking about this holistic approach, you might be envisioning dozens and dozens of people and it may seem a little daunting to actually land on a solution. You really need a balanced approach here. And I'll start with, I had a colleague I used to work with and he used to say that for initiatives like that, if you're trying to think about, you know, how many, how many people should be sort of actively working and driving these processes, it should be a small enough group that they're able to share a pizza and no other, how large a pizza I guess we could talk about. But you know, you've got to have sort of that balance there. And we've talked about having operational financial, you know, clinical, legal and other experts, you know, under the tent and working on this. So one example might be that I might use is from one of the business units transactions that we've been seeing a lot these days, which is Outreach lab. And so from a financial perspective, and this is sometimes one of the first steps as we're assessing the viability of a transaction for this business unit, is from a financial perspective, to assess the potential price or monetization opportunity relative to the expected cash flow from that business unit over some period of time. And often that's sort of, you know, one of the table stakes for whether you move ahead or not. But then to the extent that we sort of cross that gate, it's really critical to have operational and clinical leaders involved to opine on things like, you know, the access or draw sites that are going to be needed into the future. You know, making sure that we've got at least some clinician involved to have the viewpoint of physicians to make sure that we're, you know, ensuring that patients have appropriate access for testing. Even if we don't totally own own that that business unit or service line into the future, we need to make sure that that's appropriate for our patients and our communities. And then Chris mentioned legal as well, which is really important in these processes, not only from, you know, kind of a legal and regulatory perspective. And that comes up quite a bit with lab, but also with the structuring and all of these pieces. You can sort of almost think about it like a flywheel or some other schematic where these pieces are all interconnected. So if you can imagine, you know, you've got the financial perspective and, you know, what's coming through as we're thinking about the valuation and the impact on our cash flows, that we're getting insights from operational and clinical leaders, like I said in my example, you know, having certain access to draw sites or other avenues for patients to make sure that they have access to care, having actual legal commitments in the documents that reflect those concerns or thoughts that operate and clinical leaders might need. And as we think about all of these different parts of the puzzle coming together again in an iterative fashion, I think it's also important to have an executive sponsor that at the end of the day calls the shot. These are really complex transactions and bringing all of this together. But, you know, being able to take all of the information in and decide sort of a key go, no go decision points we see is really critical too.

[Chris Blohm]

I just add that the, the rigor that Courtney outlined in lab, and it's a really interesting service line because it's not something that I think we all think of as incumbent in a health system, but it's so important, could be applied to any other service line, whether it's urgent care, ambulatory hospice, home care, durable medical equipment, physician, even physician practice. You're taking a look at what an organization does well, runs well, what it needs to accomplish, its strategic vision and figuring out frankly, whether a service line may thrive with a partner or joint venture versus staying inside the organization as a captive.

[Erica Spicer Mason]

Yeah, thank you both so much for this really practical approach that you're outlining here. I'm still also thinking about that example that you gave Courtney about this group of trans transformation and operational folks should really be able to share pizza. That's about the size of the group. It's a really, really good guidepost I think. But also, you know, to your your points about being able to scale this approach to other service lines and areas outside of just out outreach lab, really important note. And then having an executive sponsor at the end of the day who can call the shots. I think that's a really good piece of advice for our listeners. You know, I know we've, we've covered a lot of ground here today. We've talked about, you know, the importance of alignment, collaboration, this holistic approach, really getting a sense of the portfolio approach as you both mentioned earlier and some of the other questions. But if you had to distill this down to one mindset or strategy that you think will be most important for healthcare leaders as they continue to re envision their operations, what would that be and what's a meaningful step they can take to build on momentum? There's Chris, maybe you could get us started with that.

[Chris Blohm]

Sure, that's a great question, a complicated question. And that probably can be its own long form podcast format for three hours. I'd say without or risking oversimplifying, I'd say leaders need to be open to continuous reconfiguration and evaluation of their portfolio. So not looking at it as a one off. I do this one time restructuring or one time partnership or one time sale or acquisition and I'm done. But rather look at it over time and with a long term perspective. I'd say leaders need to have a mindset where they're willing to retire legacy assets either through a divestiture or a partnership. That could be a service line, that could be a facility that could be all the above. If it doesn't serve the long term objective of the organization, it needs to be evaluated. I'd say also not be afraid to rent versus buy or own. So be open to other access models, partnerships, digital data, ambulatory, home based. Figure out what your patients need and how best to deliver that to them. And then just be resilient in how you prioritize workforce models. Look at your supply chain, look at your infrastructure and technology platforms, all the pipes and wires that make that all possible are important as well, and they shouldn't be ignored.

[Erica Spicer Mason]

Yeah, sounds like flexibility across the board, Chris, is really important for leaders to really keep in mind going ahead. Courtney, what would you add?

[Courtney Madanik]

Yeah, no, I think, you know, the final thought that I'd maybe wrap around all of this and actually it's a repeat of something that I think we mentioned earlier on, which is really to challenge yourselves and your teams to look at all of this through a fresh lens because some of the perspectives that we had one, two, five or more years ago may be just totally different in today's environment. We've gone through tremendous change over a fairly short time span. And so having the nimbleness that Chris just alluded to and challenging the teams to have this as sort of part of your ongoing work, I think is really important going into the future. And it's hard work. You know, I think having making the decision to go forward and take a fresh set of eyes in a lot of this stuff is hard work. And making the decision to move forward with one strategic alternative over another is hard work. But again, I think it all starts with that mindset that Chris just mentioned and really thinking about all of this through a fresh set of eyes and.

[Chris Blohm]

The call to action, mapping your operational portfolio and service lines against your objectives and future state strategy and being really thoughtful, as Courtney mentioned, in picking area and areas to prioritize and execute and do so continuously.

[Erica Spicer Mason]

Such a great note to close us out on Chris. Courtney, this conversation has had so many nuggets of wisdom. I think our listeners are going to get a lot out of it. Can't thank you enough for the time that you made to spend time with Beckers today and give us all your insights. Thank you again.

[Courtney Madanik]

Sounds great. Appreciate the time.

[Chris Blohm]

Thanks so much for having us.

[Erica Spicer Mason]

We'd also like to thank our podcast sponsor for today, Kaufman Hall. Listeners, be sure to tune into more podcasts from Becker's Healthcare by visiting our podcast [e-mail].