310: Finding margin in providers' new policy reality

So the conversation that we're having today is about health system finances.

But really, it's about the leaders that are trying to inflect health system finances.

So that's actually where I want to start our conversation.

Because when you work in an industry where normal margin is typically, what, around 3%, managing finances is really a constant battle.

It's never easy.

You all are working with health system leaders day in and day out.

Start us off by giving us a pulse on maybe how and what these leaders are feeling right now.

I think there's not necessarily a commonality across the country.

There's a lot of disparity between sized organizations.

So I definitely find larger health systems are feeling a little bit more optimistic.

They typically have... perhaps instead of starting at 3% margin, they're starting at eight or 10% margin.

So they've got a bit more padding and cushion versus when I'm talking to smaller community health systems that often exist in largely suburban and rural markets, they're already operating at that 3%, or maybe they're actually looking at being in the red for the end of their fiscal year.

And so there's a lot more urgency and a lot more worry and concern about the now than the health systems I talked to seem to be a little bit more worried about 24 to 36 months out.

That's a great point.

We talk about health systems as though they are a monolith when we know that's actually not the case.

Right.

Absolutely.

I think also health systems, while they are under immense amounts of pressure, there isn't that feeling of doom and gloom.

They've been hit by policies that might not paint the prettiest picture before.

To a certain extent, they know that they'll be able to weather the storm.

It's more of how are we going to weather the storm rather than can we weather the storm?

I think that's a great distinction.

One of the things I love about working in healthcare is this sort of, I won't call it perpetual optimism, but there's no option for ultimately failing.

We have to continue to find ways forward.

which can feel increasingly hard when we look at, hey, if health systems are under a barrage of financial pressures, yes, the market shifts we've been seeing for so long, and then also a lot of policy pressures.