Rounds: The Mental Health Moment

So Chrissy, kicking off the news, some really sad bits.

Conifer is laying off more than a thousand employees on November 2nd, as its contract with its largest customer outside of Tenet, Common Spirit, comes to an end on Halloween, no less.

Yes, it's definitely some sad news.

And these were mostly remote employees from what I learned.

I will say, I think this speaks to a much bigger trend we're about to see in healthcare writ large.

And I will use one word to describe that trend, and that one word is insourcing.

Reason being that many companies, especially health systems these days, are thinking that with the advent of AI, that they no longer need these 20-year-long contracts with legacy vendors to do things like revenue cycle management.

Instead, they're pulling it in-house.

They're saying this could speed up their work with Epic by a number of years.

And to me, this is a big opportunity for the startup ecosystem.

There are so many companies in RCM unlikely that this will be fully insourced.

I think it'll be insourced coupled with some vendors that I'm sure that the health system's in active discussions with as we speak.

Now, saying that leaving conifer is a trend towards insourcing is kind of saying like leaving Meditech is a trend towards insourcing, right? I mean, their cost to collect was double the industry average.

That just shows that maybe conifer didn't have the best product, right? Yeah.

Absolutely.

And again, this is why I think it no longer makes sense to be doing these 20 year long contracts as if it's a government vendor.

I understand that it takes time to go through governance and IT and integrations and all the work to set it all up.

which is where it makes sense to be with one vendor for such a long time horizon.

But competition is a good thing and new innovations are coming to market.

So you have to be able to be agile based on what's here.

And if they had stuck out this contract, they could have entirely missed the AI wave that is certainly coming for Revcycle.

Fair, fair, but the market's making some pretty big bets in RCM, right? You got R1, you got Ensemble, and a lot of fundraising there.

So I don't know.

I view this as Conifer being less of a strong asset.

What surprised me, they tenant paid a $540 million redemption payment to Common Spirit, and they own about 24% of shares.

So Chrissy, kicking off the news, some really sad bits.

Conifer is laying off more than a thousand employees on November 2nd, as its contract with its largest customer outside of Tenet, Common Spirit, comes to an end on Halloween, no less.

Yes, it's definitely some sad news.

And these were mostly remote employees from what I learned.

I will say, I think this speaks to a much bigger trend we're about to see in healthcare writ large.

And I will use one word to describe that trend, and that one word is insourcing.

Reason being that many companies, especially health systems these days, are thinking that with the advent of AI, that they no longer need these 20-year-long contracts with legacy vendors to do things like revenue cycle management.

Instead, they're pulling it in-house.

They're saying this could speed up their work with Epic by a number of years.

And to me, this is a big opportunity for the startup ecosystem.

There are so many companies in RCM unlikely that this will be fully insourced.

I think it'll be insourced coupled with some vendors that I'm sure that the health system's in active discussions with as we speak.

Now, saying that leaving conifer is a trend towards insourcing is kind of saying like leaving Meditech is a trend towards insourcing, right? I mean, their cost to collect was double the industry average.

That just shows that maybe conifer didn't have the best product, right? Yeah.

Absolutely.

And again, this is why I think it no longer makes sense to be doing these 20 year long contracts as if it's a government vendor.

I understand that it takes time to go through governance and IT and integrations and all the work to set it all up.

which is where it makes sense to be with one vendor for such a long time horizon.

But competition is a good thing and new innovations are coming to market.

So you have to be able to be agile based on what's here.

And if they had stuck out this contract, they could have entirely missed the AI wave that is certainly coming for Revcycle.

Fair, fair, but the market's making some pretty big bets in RCM, right? You got R1, you got Ensemble, and a lot of fundraising there.

So I don't know.

I view this as Conifer being less of a strong asset.

What surprised me, they tenant paid a $540 million redemption payment to Common Spirit, and they own about 24% of shares.