Kirk A. Sayler, MBA

Let's keep hospice focused first and foremost on the PATIENT. After all, we only get one chance to do it right... "There are six primary trends that are influencing consolidation and professional practices: regulatory complexity. technology and integration, private equity ownership. demographics, economies of scale and consumer expectations,” Henderson said. “So many of these things that we see that are influencing health care consolidation need to be pointing toward the patient." #patientsfirst #hospicecare #youonlygetoneshot https://lnkd.in/gbbgV-YF

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Basic “explainer” on Risk Adjustment and a RAF conundrum. This article from The Commonwealth Fund does a good job of providing the basics of risk adjustment. It also calls out one of the major contributors to patient outcomes that isn’t captured in traditional risk models, the Social Determinants of Health (SDoH). They do a great job on this, so I won’t summarize it here. However, I think there is another factor that isn’t captured that I wanted to discuss and would appreciate some different perspectives. I’d love to get some thoughts on the following. Maybe I am simply being pedantic. The issue not mentioned in the article that I think current methodologies of risk adjustment miss is duration and management of disease. A patient with a new diagnosis of diabetes, for example, now has an elevated risk of numerous complications over their lifetime. However, that risk in year 1 after the initial diagnosis is much lower than the risk at year 10. Current risk models don’t take that escalating risk into consideration, keeping the risk adjustment fixed regardless of duration of underlying diagnosis. In addition, there are few scenarios that will impact me differently as the provider: 1) Management of this patient’s diabetes has been poor for the prior 9 years and now my group “inherits” this patient at year 10. 2) My team has helped this patient manage their diabetes very well for the past 9 years. 3) For the past 9 years, this patient’s prior group had managed their diabetes well but they have now switched into my group. As noted above, in scenario 1, that “new” diagnosis of diabetes severely underestimates this patient’s risk of needing expensive resources this upcoming year. I will be adversely impacted from something that is clinically obvious (duration of a disease increases risks) but which is not captured in the current data. To go one step farther, in frameworks 2 and 3, there is a gap between what the patient’s risk would have been without 9 years of great care and what it likely is now. However, there is no recognition of this work. That is to say, if the patient switched to a group that did a terrible job of managing diabetes, they’d receive the same risk adjustment in year 10 as my group would receive after all of our time, effort and resources had been dedicated to keeping this patient healthy. If the patient’s healthcare needs in year 10 are low because of our efforts, shouldn’t we receive more credit than a group that simply gets attribution? And, what about the prior group? How are (were?) their efforts recognized? Please share your thoughts in the comments.

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Great defense of “private equity medicine” from former CMS administrator Leslie Norwalk. Though few clinicians fully understand it, PEM has become a popular bogeyman for a wide range of complaints about US health care. A few key takeaways: ·      All health care organizations require working capital. They should be judged on their behavior, rather than their source of capital. ·      Pushing health care organizations to more expensive sources of capital (e.g,, high interest loans) doesn’t serve anyone’s interests (except the banks). ·      The financial successes of private equity-backed companies accrue to everyone with a 401K or a mutual fund, not just a small number of wall street elites. ·      Reducing competition in health care (based on investment class) only accelerates market consolidation by integrated health systems, and the higher prices that come with it.

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I'm sharing an insightful article by Adam Davis from the latest edition of Healthcare Financial Management Association (HFMA) #HFM. The build versus buy analysis is a valuable tool for organizations looking to expand their physical footprint. This consideration becomes especially relevant as companies navigate the complexities of hybrid work arrangements, leading to a fluctuating market for existing spaces. In healthcare, however, the need for the delivery of in-person services makes the situation more straightforward.   What particularly stands out to me is the challenge of land scarcity and geographic premiums. Securing land for new construction can be a significant hurdle due to limited availability and competition, especially in high-demand areas (it is not as if anyone is creating more land!). Repurposing existing spaces can be a viable alternative, but it’s essential to carefully consider location to ensure accessibility.   The “honorable mention” point is the state of capital markets. The rising cost of capital significantly impacts the financial feasibility of projects, a factor that cannot be overlooked, particularly when many healthcare organizations tend to rely on predictable cash flows (large for-profit health systems notwithstanding).    By leveraging a build versus buy analysis, organizations can better navigate the uncertainties of the market and position themselves for success in an evolving landscape. #ROI #NoMarginNoMission #HealthcareFinance #AccessToCare

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Recent projections from Jefferies indicate a significant shake-up for insurers: - Humana: Faces the largest hit, with an expected $2.5 billion reduction in EBITDA and a staggering $16.37 EPS drop, marking an 83% decline compared to 2025 projections. - UnitedHealthcare: Set to lose $1.6 billion in EBITDA, alongside a $1.39 EPS decline (4%). - CVS/Aetna: A relatively modest gain of $100 million in EBITDA and a $0.05 EPS bump (1%). - Elevance: A $100 million reduction in EBITDA with a $0.30 EPS decline (1%). - Centene: A positive outlier, expected to increase EBITDA by $100 million and boost EPS by $0.10 (1%).

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In this space I’m fond of talking about the similarities between finance and healthcare and have commented on some of the same legal and institutional issues that have driven substantial change in both the financial markets and qualified retirement plan area in particular. Today, I want to talk about the whole notion of risk and exactly how employer health plan fiduciaries bear and manage risk. The inspiration for this post is the famous American investor and writer Howard Marks and his most recent essay or memo on the subject of risk. I’ll post a link to the memo in comments. I’ve been working in employer healthcare for nearly 40 years. The majority of employers self fund their medical plans in some way and most utilize stop loss to help them limit and manage their risk. For most groups purchasing stop loss, the cost for that service constitutes the largest fixed cost in their health plan thereby making stop loss hits from catastrophic or high cost claims, have an outsized impact on the overall financing of the health plan. Large increases in SL cost are borne by all of the plan’s beneficiaries. Fiduciaries presumably take and limit risk via stop loss in a strategic manner. The reality is that most fiduciaries really don’t consider their risk prudently and the stop loss that they place in force is often inappropriate for the specific aspects of their plan. Often they buy limits that are too low and contracts that use language that doesn’t consider all of the critical risk elements that they need to consider. Fiduciaries often have VERY little risk literacy and that opens them up to fiduciary breach liability. I’ve seen few opining on this subject. Back to Howard Marks. Marks, in his most recent memo talking about financial risk, comments with this conclusion in his most recent memo: “You shouldn’t expect to make money without bearing risk, but you shouldn’t expect to make money just for taking risk. You have to sacrifice certainty, but it has to be done skillfully and intelligently, and with emotion under control.” As employer fiduciaries begin to grapple with CAA and its requirements, as they begin to think about exactly what they need to do with their data and analytics to understand the very specific needs of their populations and what they’re paying for health services and the vendors who are serving or not serving the needs of the plan and its beneficiaries; its absolutely critical, as a first step, to learn about risk, risk bearing and the most appropriate steps for financing ones plan. The piece linked to this post, forwarded to me from my friend, points out the fiduciary perils of not understanding risk and the outsized importance of implementing appropriate stop loss with appropriate limits and terms. “Excess 2M claims cost has doubled in the last 3 years.” The report also talks about the huge impact of gene therapies and other high cost drugs and the continued march of hospital costs. #risk #stoploss #healthcare

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🚨 The Future of Healthcare Finance: Balancing Cost & Quality 🚨 Healthcare finance is at a critical crossroads. Rising costs, regulatory changes, and shifting patient expectations demand that organizations find new ways to balance cost control without compromising quality care. Here are 3 key strategies to navigate the road ahead: 1️⃣ Value-Based Care Models: The shift from fee-for-service to value-based care is pushing healthcare organizations to focus on patient outcomes rather than service volume. Embrace models like ACOs and bundled payments to improve efficiency and quality. 2️⃣ Leverage Technology: AI, automation, and telemedicine are transforming healthcare. These tools not only streamline operations but also enhance patient care while reducing administrative costs. 3️⃣ Operational Efficiency: Reducing administrative waste and adopting lean management practices can significantly cut costs without affecting patient outcomes. Optimize workflows and use data analytics to make informed decisions. The future of healthcare finance is challenging but full of opportunity. By investing in innovation and staying adaptable, organizations can thrive while delivering high-quality care. 💡 How is your organization preparing for the future of healthcare finance? Let's discuss strategies in the comments! 👇 #HealthcareFinance #ValueBasedCare #HealthcareInnovation #CostManagement #OperationalExcellence

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Market dynamics aside, it will be interesting to see how these cost cutting measures (I.e., benefit carve-outs, community/county exits) will play out during an election year when CMS releases data on bids in October. Get your popcorn ready!! #healthcarenerd, #valuebasedcare, #pophealth, #pricetransparency

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Private Equity Firms Must Align with Value-Based Care Models to Succeed Here’s why this shift is essential: 1. Shift from Fee-for-Service to Value-Based Models Healthcare is transitioning from fee-for-service (FFS), which rewards volume, to value-based care, which links payments to patient outcomes, quality metrics, and cost efficiency. Medicare’s Alternative Payment Models (APMs) and other commercial payers incentivize practices to meet benchmarks such as reduced hospital readmissions and improved patient satisfaction. 2. Regulatory Compliance and Risk Mitigation Bundled payments and Accountable Care Organizations (ACOs) are integral to VBC but introduce compliance risks. PE-backed practices must adopt robust compliance programs to avoid penalties and audits. Practices that fail to demonstrate quality improvement may face downside financial risks, including lower reimbursements or fines. 3. Increasing Competition for PE Investments As more PE firms enter healthcare, the ability to demonstrate measurable quality outcomes will become a key differentiator. Success will hinge on improving patient outcomes and managing costs, rather than solely maximizing short-term profits. Practices with strong value-based care frameworks are likely to achieve higher valuations during exits or refinancing events. 4. Operational Integration for Long-Term Value Creation PE firms must invest in data analytics, care coordination tools, and patient engagement platforms to meet VBC metrics and improve outcomes. Population health management strategies and risk-sharing agreements will enhance collaboration with payers, hospitals, and providers, driving long-term value creation. 5. Focus on Quality and Patient Experience Regulatory frameworks, such as MACRA (Medicare Access and CHIP Reauthorization Act), place increasing emphasis on quality over volume. Practices that meet these standards will enjoy higher reimbursement rates. With growing consumer demand for transparency, outcomes reporting, and patient satisfaction, quality care is becoming essential for maintaining market relevance. Bottom Line While critics argue that PE firms prioritize profits and bottom lines, the shift toward value-based care will compel financial backers to focus on quality outcomes and compliance. Practices that fail to align with VBC models will face lower reimbursements, regulatory challenges, and limited growth opportunities. In effect, the financial incentives tied to quality care will encourage PE firms to operate within the guardrails of compliance and quality regulations, ensuring they meet both patient and industry expectations. #compliance hashtag #healthcare hashtag #privateequity hashtag #riskmanage hashtag

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🚨 Update on Baptist Health and Florida Blue Negotiations 🚨 Negotiations between Baptist Health and Florida Blue are ongoing and remain tense as the September 30 contract deadline approaches. Discussions have been underway since February 2024, but no agreement has been reached. The core issue is payment rates: Baptist Health seeks increases to cover rising costs, arguing that current rates are below market, while Florida Blue contends that these demands are excessive and significantly above inflation. With the potential for Baptist Health services to become out-of-network for Florida Blue members on October 1, many patients in Northeast Florida are left uncertain about their healthcare options. Both sides are committed to finding a resolution, but time is running out. 🔗 Sources: Action News Jax, Baptist Health, Health News Florida

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Cost analysis in isolation lacks depth. Consider comparing costs - or cash shortfalls - from multiple angles: -Procedure codes -CPT codes -Payers -Aged A/R A record of CARCs and RARCs can be used to map shortfalls and denials, getting you closer to the root causes. This is what my team calls an RCM Health Check and I’m covering the concept in a webinar this Thursday. Join me here: https://lnkd.in/epuhRSn7 

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This is a very digestible and informative take on MLR by Dr. Jain. We encounter this issue everyday at Epistemix and there is so much truth behind the idea that start ups and VBC enablers focus on revenue capture. Why? Because it’s easier and more measurable. When we talk to groups about reducing utilization there is true skepticism because there is an underlying belief that it might not be possible to make members healthier. We believe it is and it all centers around changing behavior for the good of the member which in turn reduces utilization

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Cigna Healthcare and Humana have reportedly reignited #merger talks after stalled discussions last year. If successful, the merger could shake up the healthcare industry, potentially creating a #powerhouse in the #Medicare #Advantage #space. However, with increased scrutiny from the FTC, navigating regulatory hurdles will be key. The sector is watching closely for further developments. #HealthcareNews #Cigna #Humana #MergerTalks #MedicareAdvantage #HealthInsurance #FTC #IndustryUpdate

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CMS has updated their latest OASIS Q&A. The first question says "Question 1: A third-party external auditor consistently states that our OASIS functional status items are “underscored” and recommends changing the responses to the OASIS items. Is the assessing clinician required to accept the auditor’s recommendations? " There's a very good answer that goes with it. Home Care Answers follows this rule to a T. We will access the patient chart in the EMR, review all relevant documentation, code it accurately, enter suggested changes into the EMR, and then send a detailed report of the suggested changes we've made. The One Clinician Rule must be followed, so the clinician needs to see the report (with our included reasoning for said changes) and then the clinician is free to change it back. ANY agency that uses a 3rd party provider that offers to lock OASIS upon completion change process, or run away. We're here to enhance compliance through accuracy, not cause compliance issues. The clinician's name is on the signature line, therefore, the clinician gets the final say. Period. End of Discussion. Note: We would strongly recommend working with us to understand why we may have made a change and the clinician disagrees- we can hopefully provide guidance, education, and context so that the clinician can trust that we're on the agency's side and striving for accuracy. Dollars and compliance happen to follow the accuracy. https://lnkd.in/g4pxi9xA

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“Meanwhile, regulatory oversight such as Maryland’s does little or nothing to meaningfully address true crises in U.S. healthcare: affordability, decreased life expectancy and gaps in care for those experiencing homelessness and mental illness.” Thank you, Jeff Charles Goldsmith This is a good read. Much is made of regulating cost growth in hospitals and that misses the greater point. If people have no homes to return to and no mental health support, they will wind up back in the acute care system. As long as the shortage of primary and specialty care physicians continues, people will continue to experience access challenges and will wind up back in the acute care system. I would also add that the existing healthcare system financial model is predicated on the smooth transition of patients from one care setting to another, which we have seen breakdown under the challenges listed previously (broken by Covid and deepened by post Covid workforce shortages). And, insurer practices that double down on administrative burden as a business model makes solving all of these challenges much more difficult. We have to remember that people take care of people. Get the people and experience right, and the rest has a chance of being solved. The most disruptive thing that could be done in the near-term and intermediate term is to educate and inspire more people to become physicians, APPs, nurses and techs. That takes prioritization, money and sustained focus on patient and provider/nurse experience. #hfma #healthcare #hospitals #healthcarefinance #healthsystems #oregonhfma #oregonhospitals

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If you build it, will they come? I’ve heard countless organizations - #MA plans, #Medicaid plans, risk-bearing providers, vendors, PBMs, and retail players - say “we need to build the capabilities to XX”. Many are looking to vendors for solutions, but few vendors are ready to invest in new capabilities without contracts.  Anyone else sensing this (problematic) new conundrum? Here’s my quick take and a few ideas to break through this barrier. Many sales meetings are often held with functional departments, and often do not include the #MedicareAdvantage #StarRatings, #RiskAdjustment, #HEDIS, IT or P&L owners. We must collaborate to get those departments’ urgent needs integrated into new vendor purchases in order for new activities to meet new and emerging needs, remembering that: 🌟 Vendors are vital to your success.  🌟 Vendors operate in a more volatile environment than plans. 🌟 Vendors have smaller budgets than plans. 🌟 Vendors need signed contracts to make significant investments.   🌟 Vague RFPs waste vendors’ time and resources. Collaboration creates win-win contracts which expand capabilities of both parties. I encourage plans to: ✅ Ask vendors about their roadmap; including timing and certainty of planned enhancements. ✅ Include the #Stars, Risk Adjustment and #PartD teams in new vendor discussions. ✅ Consider adding a vendor's roadmap capabilities to contracts. ✅ Co-create with trustworthy vendors. I encourage vendors to: ✔ Ask about the customer’s unmet needs. ✔ Offer to co-create solutions to new and emerging needs with willing customers. ✔ Offer to accelerate roadmap capabilities with willing customers.   ✔ Articulate the things you would be willing to do if a customer would be willing to contract for it. This is a #MarketMakingMoment as #CMS has thrown down the gauntlet with #NewNeedsOfStars and #NewNeedsOfMA. This is a stellar time for vendors to review current and planned capabilities with a broader lens on new and emerging MA, #Compliance, Stars, #ECDS, #Interoperability, #HealthEquity, Medicaid & #SNP Aligment, and Risk Adjustment needs. If you need help, reach out to us.  #WhatGotYouHereWontGetYouThere  ⭐ ⭐ ⭐ ⭐ ⭐

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And we're LIVE, on #financeyahoo, for all the world to see. The #workforcestrategists have shared vetted solutions, and it's time to mend what is broken. #HealingHealthcare has the EBP we need now, and for our respective futures. Dina Readinger, EMBA, #amplifypublishinggroup

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Interesting and insightful discussion between HIMSS Finance and David Kirshner. David emphasizes how the healthcare industry can take cues from other sectors to better manage non-clinical costs. Well worth the listen! #healthcare, #Finance, #healthcareconsulting. https://lnkd.in/gZUgarpM

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Here's how UnitedHealthcare steals from you And raises the cost of healthcare: Intercompany eliminations A recent STAT article uncovered some very unsurprising practices whereby UHG reimburses its physicians, employed by Optum, at rates much higher than market rates Whatever market rates are anyways And I know what you're going to ask, if UHG is paying its docs higher rates, isn't that still just taking money out of its own pocket? Why, yes, but also no Here's how it works without the effery: UHG gets $1B in premiums UHG pays $850M for medical care UHG makes $150M and satisfies MLR requirement And with the effery: UHG makes a $1B in premiums UHG reimburses $950M to its own docs The docs make $950M in revenue The docs' costs are $750M UHG eliminates $950M The real cost to UHG is only $750M UHG makes $250M UHG raises premiums next year UHG gives middle finger to MLR requirement The magic for UHG is that it gets to justify higher premiums because the "cost" of healthcare is so high It also gets to skirt right around Medical Loss Ratio rules because its own reimbursement amount is bumpkins and goes from the right pocket to the left Game. Set. Match. As Seth says, don't hate the payer, hate the game Problem is, the payers invented the game and wrote the rules P.S. If you love this hot pink graphic, you'll extra love The Healthcare Breakdown, where I use pictures with borderline offensive colors schemes to show you the games being played in healthcare Check it out here: https://buff.ly/47NeASx See you out there!

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