Episode 2: Exploring Healthcare Executive “Mindsets”
In this episode of the “Achieving Health” podcast, host Chad Mulvany shares the latest healthcare policy and legislative updates for the week of June 15, 2025. He’s then joined by guests Randy Biernat and Juli Pascoe, partners in the Healthcare Practice at Forvis Mazars. Together, they explore insights from the firm’s Mindsets 2025 Healthcare Executive Leadership Report, based on a survey of 180 executives across the care continuum.
Transcript
CHAD MULVANY
On today’s episode of Achieving Health, I’ve got the latest policy and legislative updates from Washington, D.C. for the week of June 15th, 2025. And then I’ll be joined by my colleagues, Randy Biernat and Juli Pascoe, who are partners in the Healthcare Practice at Forvis Mazars. During our conversation, we’ll explore insights from our recently released “Mindsets 2025 Healthcare Executive Leadership Report.” Stay tuned.
ANNOUNCER
This is Achieving Health, a podcast from Forvis Mazars, where we delve into the topics that matter most to healthcare organizations across the continuum of care. Our goal is to help you navigate the dynamic healthcare landscape and achieve health at your organization.
Here’s your host, Chad Mulvany.
CHAD MULVANY
Welcome to Achieving Health. I’m Chad Mulvany, director in the Healthcare Practice at Forvis Mazars. Thank you for joining me.
We’ll begin today with a segment called Washington Watch, where I share updates on the most recent actions of federal policymakers and their anticipated impact on healthcare providers and payors.
Today’s Washington Watch reflects information as of Friday, June 13th
and is certainly subject to change. Comments on this conversation are based on what’s being reported by D.C. trade press at the time of the conversation, mixed with a lot of judgment about where things may go
based on my experience in D.C.
As far as our agenda is concerned, I want to start off talking about the One Big Beautiful Bill Act or OBBBA and certainly work on that continues
with an aggressive goal of getting an amended version of the House bill passed in the Senate, then back through the House and the president’s
desk by the Fourth of July recess.
However, there are obviously some stress points, and these are the same ones between fiscal conservatives and senators who are worried about Medicaid and access to care in their states. The same things that we saw in the House exist in the Senate.
Also want to touch on President Trump’s directed payments memo, similar to a provision in the House-passed OBBBA. President Trump issued a memo restricting CMS to limit supplemental payments to the Medicare rate. And now there’s a rule at OMB that would appear to be making good on that memorandum.
As far as 340B goes, a proposed rule on rebate models landed at the Office of Management and Budget on Monday, 6/2, and is currently under review. The rule will likely be released sometime this summer and is in response to manufacturers’ efforts to transition the program from a discount model to a rebate model.
In terms of tariffs, President Trump’s regime spent the last week in May in court to mixed results. While two separate lower courts found many of the tariffs impermissible, an appeals court stayed the injunction.
And then finally we’ll cover CMS scrutiny of state expenditures for undocumented individuals, separate from the OBBBA provisions related to Medicaid coverage of undocumented individuals. CMS sent states a letter in the last week of May notifying them of increased scrutiny of spending related to individuals with unsatisfactory immigration status.
With Congress back from the Memorial Day recess, the Senate began work on the One Big Beautiful Bill Act. The CBO issued an updated score
on the House-passed bill that incorporates the manager’s amendment and other interactions. The score only exacerbates tensions between fiscal conservatives and those concerned about the impact of Medicaid cuts on their constituents. Senate Majority Leader Thune is sticking to the July 4th timeline, and will need to address these concerns quickly.
In terms of the updated score, the CBO finds that the House-passed version of the bill would increase the federal debt by $2.4 trillion over a decade. This will only fuel fiscal conservatives’ demands for additional savings. However, there’s also plenty of agi to go around for senators concerned about access to care and sustainability
of rural and safety net providers.
The updated estimate shows the Medicaid and exchange provisions would result in nearly 11 million individuals becoming uninsured. This is up from 8.6 million in the estimate prior to the manager’s amendment by 2034, and OBBBA reducing federal Medicaid spending by over $800 billion over 10 years.
To put the coverage loss in perspective, the number of uninsured today is roughly 26.1 million, or an estimated 26.1 million. Assuming the CBO’s numbers are right, an 11 million individual increase is roughly a 40% increase.
Not surprisingly, the bulk of the changes from the pre manager’s amendment CBO score to the post comes from pulling the work requirements forward, or the community engagement requirements forward to December 31st, 2026, at the latest.
Again, the increase in savings uninsured in federal fiscal situation isn’t a surprise and pulling the work requirements forward. While it did generate some additional savings, it was certainly not enough to offset the changes to the SALT cap.
And just as a reminder, the SALT cap is more of a blue-state issue. So think California, New York, New Jersey. To a lesser degree, Maryland and Illinois. None of these states have a Republican senator. So in the Senate, it will be easy to address fiscal issues by lowering the cap. However, that would likely complicate repassage in the House.
In terms of the battle lines in the Senate, again, as I alluded to up top, it’s the same as in the House. It’s those concerned about the debt and deficit versus those concerned about Medicaid access. President Trump is already engaged in having ongoing conversations with senators who have expressed outright opposition or concerns, in an attempt to persuade them to vote for the Senate version of OBBBA. When we get to that point, team deficit reduction includes Senator Rand Paul from Kentucky, who won’t vote for anything that extends the debt ceiling. So he’s likely a no-vote no matter what. And then senators Mike Lee of Utah, Rick Scott of Florida, and Ron Johnson, Wisconsin, are all currently opposed and claim they will remain so unless the bill includes significantly more spending cuts.
To allay concerns about the need for additional deficit reduction, Speaker Johnson has floated another reconciliation bill in 2026. However, if Senator Paul or Senator Scott, the promise of a future reconciliation bill that addresses spending rings a little hollow.
As you know, every line item has a constituent or lobby that supports it. And the $4 trillion debt ceiling increase included in the house bill will likely last through the end of 2026. So I’m struggling a bit that without a carrot, like reduced taxes or a stick like the risk of breaching the debt ceiling, I’m not sure what gets Republicans in 2026 to lock arms and take a hard vote for more spending cuts, especially right before, likely right before the 2026 midterm elections.
It’s also likely that by the time the vote on the package actually occurs, the full House and the senators facing elections in 2026 will have cleared their primaries, so the threat of being primaried by someone backed by President Trump should be off the table.
On team Medicaid, you have Senators Hawley of Missouri, Collins of Maine, Murkowski of Alaska, Ernst of Iowa, Tillis of North Carolina, and Moran of Kansas. They have all expressed concerns about the Medicaid cuts, particularly the changes to provider taxes.
With Collins, Ernst, and Tillis all up for reelection this cycle, and Collins and Tillis in races that should be contested or projected to be contested, those two in particular may be more immune to pressure from the president to accept cuts they think will be harmful to their states.
And so I think there is right now still a very real tension between fiscal conservatives who want additional changes and additional changes to the bill and deeper cuts related to provider taxes and those that understand that this is a critical tool, the provider taxes that states use to maintain access to care in rural and economically disadvantaged communities.
Speaking of, analysis by the Sheps Center for Health Services Research at the University of North Carolina finds that there are over 338 rural hospitals that are at heightened risk of closure or conversion to another facility type if OBBBA passes.
The analysis looks at whether the hospitals in question have been unprofitable for the last three years, whether the hospital
is at risk of financial distress relative to peers and the hospital’s payor mix. The analysis, included in a letter from Senators Markey, Merkley, Wyden, and Schumer to President Trump, House Speaker Johnson, and Majority Leader Thune.
It’s also been reported that Medicare cuts may be in the mix for the Senate version. Some Republican senators are eyeing overpayments to Medicare Advantage plans as an opportunity to increase savings, while the major trade associations representing health plans are pushing back against any legislative changes would limit risk coding to generate savings for OBBBA. Humana and United have both indicated that they are open to changes that would limit the ability for diagnosis codes documented during home risk assessment visits from being included in the risk adjustment calculation.
As background, the Office of Inspector General found that diagnoses reported on enrollees, health risk assessments, and health risk assessment-related chart views, and not on any other service records
for the year evaluated, resulted in an estimated $7.5 billion increase in Medicare Advantage risk-adjusted payments.
While I think it’s uncertain as to what impact moving to CMS-HCC version 28 for the risk model might have on a potential CBO’s estimate of savings, there still should be some savings here. That said, I am a little surprised that this made it into the conversation, and it’s certainly not guaranteed that it will be in the package even though this could fall under the banner of Medicare waste, fraud, and abuse.
While it was discussed in the Senate Finance Committee briefing that I mentioned earlier, participants were after the meeting, reportedly cagey about the prospects of MA changes. The Senate Finance Committee is the committee of jurisdiction for the healthcare pieces of the bill, or at least the Medicaid and Medicare pieces, potentially, if there are Medicare pieces.
And Axios is reporting that a draft of the SFC language is expected in two parts. It is anticipated that the first part will come out Friday, June 13th. The second part, which will likely include the tax provisions, particularly those related to the state and local tax cap will be released on Monday, June 16th.
From a timing perspective on the bill, I still think that while Majority Leader Thune is targeting the last week of July to pass the legislation and before the Fourth of July recess to get it to the president’s desk, I still think we’re looking at a bill getting back to the president’s desk sometime before the August recess.
Switching gears a little, President Trump this week issued a memo capping Medicaid payments at the Medicare rate. Then the following Monday, June 9th, a proposed rule on state-directed payments likely containing
the implementing regulations rolling back the Biden administration’s clarifications that states could pay up to average commercial rate for SDPs appeared on the Office of Management and Budget dashboard and is currently under review. And just as a reminder, the House-passed version of OBBBA contains a similar provision that would 1) grandfather submitted and approved SDPs at their current rate, 2) cap new SDPs at the Medicare rate for expansion states, and 3) allow non-expansion states to create new SDP programs that pay up to 110% of Medicare. However, if the non-expansion state subsequently expands any program that was paying at 110% of Medicare would then go back to being 100% of Medicare.
Even if the OBBBA doesn’t pass, or passes, but for some unknown reason doesn’t include the SDP provision, it seems the administration is poised to implement this cut anyway. I think the other thing that this indicates is that the administration has bought into the line of thinking that provider taxes and supplemental payments are somehow or another untoward, which they’re not, and where the OBBBA is unclear, attempt to interpret it in ways that further narrow these crucial financing mechanisms that support access to care in rural and economically challenged communities.
However, my guess is that post-Loper Bright, it will be interesting to see how the courts interpret whatever regs come out of CMS after legislation is passed. Given that it will certainly be subject to legal challenges, or I would anticipate that it will be subject to legal challenges.
Moving on to a 340B, a proposed rule ended at OMB on Monday, June 2nd, that will provide guidance on 340B rebate models. The proposed rule is a response to the various lawsuits filed by to HRSA, rejecting their efforts to transform the 340B program from a discount model to a rebate model. And certainly, you know, this is one of those things that makes me nervous. And if I were a 340B-covered entity, particularly a hospital,
it would definitely make me nervous.
Any actions that reduce the availability of the discount for covered entities will compound the margin pressure safety net providers face if the OBBBA is enacted with significant Medicaid cuts. If HRSA does allow for rebate models, I anticipate that states will attempt, like Arkansas, to pass legislation that clarifies the 340B program is a discount program. I’ve said this before, and I think it bears watching.
As currently contemplated, rebate models would require that patient encounter, prescription, and drug purchasing data be shared with an entity designated by the manufacturer for any rebate to be issued. So now, in addition to having a revenue cycle to file claims for patient services, 340B entities would likely need to have a rebate cycle given that much of this data is not required today.
It’s also not hard to imagine that covered entities as part of the rebate cycle would need to develop denial management capabilities similar to what we see in the traditional revenue cycle. And so my guess is
that it would also be low-cost relative to savings for manufacturers’ TPAs to deny the initial claim and request additional data.
Along these lines, if HRSA allows rebates, one of the immediate concerns
that I have is will manufacturers be allowed to compensate the TPA based on rebates retained for the manufacturer? If so, this really does harken back to the misaligned incentives of the recovery audit contractors and will only add additional expense for 340B-covered entities.
Moving on to tariffs, President Trump’s tariff regime spent the last week of May in court. The International Court of Trade blocked the 10% universal tariffs for all countries and reciprocal tariffs once certain countries with which the U.S. has high trade deficits. The court order also blocked tariffs imposed on Canada, Mexico, and China that were implemented in February based on concerns about illicit fentanyl trafficking and immigration issues.
Tariffs imposed under other authorities, such as the section 232 tariffs on steel and aluminum imports remain in place and were not impacted by the ruling. Also, there was a separate case in the U.S. District Court for the District of Columbia that found the tariffs discussed previously to be unlawful.
However, as expected, the administration appealed the court’s ruling and wasn’t granted an injunction, meaning that for the time being, the tariffs are reinstated pending further hearings.
For those keeping score at home, the reciprocal tariffs are currently
scheduled to go into effect on July 9th. And certainly, I think this is a prime example of the uncertainty healthcare organizations are facing
as a result of administration policies.
I anticipate that this case may eventually end up before the Supreme Court, and likely in an expedited manner, despite the favorable rulings in the lower court where a healthcare organization, I would still assume
that these tariffs will go into effect and move forward with measures
to mitigate the impact.
Even if the Supreme Court eventually rules against the administration, it is likely that they will attempt to implement this policy through another mechanism, given that it is a central plank in this administration’s platform.
Finally, related to CMS scrutiny of state Medicaid expenditures
for undocumented individuals, separate from OBBBA, CMS states
a letter in the last week of May notifying them of increased scrutiny
of spending related to individuals with unsatisfactory immigration status. The letter notes that the only permissible use of Medicaid funds for individuals who are ineligible due to immigration status is emergency medical services.
As part of its increased financial oversight, CMS will focus performed evaluations of select Medicaid spending reports, conduct in-depth reviews of selected states’ financial systems, and assess existing eligibility rules and policies to close loopholes and strengthen enforcement. The letter notes improper spending on non-citizens will be subject
to recoupment of the federal share.
Beyond the 14 states and D.C. that are impacted by the overprovision, we will see all states tighten up their processes to mitigate the risk of federal funding recoupment as a result of covering individuals otherwise qualified for Medicaid, whose immigration status makes them ineligible. This will only likely further increase the rates of uninsured in states
with larger immigrant populations.
This concludes today’s Washington Watch. Up next, Randy Biernat and Juli Pascoe will join me to share insights from our 2025 “Mindsets
Executive Leadership Report.”
CHAD MULVANY
I’d like to welcome our guests for today’s episode, Randy Biernat and Juli Pascoe, partners in the Healthcare Practice at Forvis Mazars.
Randy’s work focuses on physician services, including consulting for transactions in compliance, hospital-physician alignment, and fair market value compensation.
Juli works with senior living and long- term care organizations, providing audit and consulting services including strategic planning, operating budget preparation, cost report preparation, and strategic reimbursement.
Randy, Juli, thank you so much for joining us today.
JULI PASCOE
Happy to be here.
RANDY BIERNAT
Good to be with you.
CHAD MULVANY
You know, I’d like to start off by asking each of you to share a bit about the work that you do with healthcare organizations and what led you to the field. Maybe, Randy, we can start with you.
RANDY BIERNAT
I love the work we do in physician enterprise, performance improvement work, work largely focused on just that, driving and optimizing physician performance. We have a great team whose expertise runs through the vertical stack of strategy, operations, and finance. And as a highly regulated space, everything we do is grounded in compliance, where we have a lot of expertise as well.
All this generally is out there under the banner of physician alignment. And that’s what’s so much fun for me. When a group of physicians really all gets pushing in the same direction, great things tend to occur. So that’s how we intersect with the healthcare space.
CHAD MULVANY
Great. Thank you, Randy. And Juli, same question to you.
JULI PASCOE
Yeah, So I have been with the firm a little over 20 years and kind of got in under the wing of senior living in long-term care really early on in my career and fell in love with it about nine months in. And, you know,
our team does go really deep. It was more than just doing an audit, a tax return, and a cost report. It was really about understanding their operations.
And then we dove really deep and we could help provide a billing solution or an outsourced accounting solution or our nurses could get in and help with clinical assessments and things and got the ability to really work alongside providers. And then it’s been really rewarding the last few years to really work alongside with industry associations and helping really think about reimbursement and how we fairly pay for the care for our seniors, because it is an issue that our country is going to have to face sooner than we may like, and we’re going to have to figure out how to pay for it.
So very passionate about that. And helping providers navigate that because they provide such a value for the care they do in the continuum.
CHAD MULVANY
I asked the two of you today to come and talk about our Mindsets 2025 Executive Leadership Report, to give our listeners some background. This report is based on a surve that we conducted at the start of the year, with responses from 180 healthcare executives at organizations across the country and across the care continuum.
We asked about their organizations and biggest challenges, their priorities, and their performance across the core capabilities for achieving health that we discussed in our last episode.
Both of you were heavily involved in developing our Mindsets report, and I’d really like to hear from each of you. What’s one high-level trend that stood out to you from the survey results, especially as it relates to your work?
And maybe Juli, I’ll ask you first for the senior living long-term care perspective.
JULI PASCOE
Yeah, it was really twofold. And I think we may touch on this. So workforce is going to be a continued issue of how we take care of all of these older adults. And as they hit our facilities, where are they going to come from? Especially with immigration reform and other things being a top political issue right now, having to navigate that, but also just the future of reimbursement. So how are we going to pay for this care?
I think people are deeply concerned because we have many state Medicaid plans that are still very much underfunded. COVID had all kinds of implications with the wage rates. We went from paying CNAs, you know,
probably doubling their wage rate almost overnight. And that is a huge part of our workforce.
So, you know, Medicare changed October 1st, 2019 to the patient-driven payment model. We had a slight parity adjustment when it wasn’t budget-neutral. But other than that, we’ve just had these minimal increases. And then state Medicaid plans have just been it’s chaotic, to say the least. With all of the different state Medicaid budgets across the country. And that’s a lot to navigate when that’s a big chunk of your revenue coming in the door.
CHAD MULVANY
And, you know, you mentioned immigration reform, but on the Medicaid side of the House, obviously, one of the things under consideration reconciliation is provider taxes. And if those get cut, you know, to the extent that a state has a provider tax that supports long-term care providers, you know, it just sort of, you know, more straws on the camel’s back.
JULI PASCOE
Oh, it’s a ton. And it’s something that I’m worried that they don’t understand, that people don’t understand how these provider tax work and that they don’t realize that 30-plus states have these to basically fund their already underfunded Medicaid rate. And if that money goes away, I don’t know of too many state budgets that can just immediately fill that hole. Well, someone has to care for these residents. And the average rates are not high in these states. So I don’t know where they would go. And there’s nowhere for them to go.
So it’s a real-life problem that’s more than just dollars and cents at the end of the day, because we’re talking about people.
CHAD MULVANY
Randy, how about your perspective on the Mindsets report for the physician enterprise?
RANDY BIERNAT
Like Juli, reimbursement is high on the list. But the high-level trend that I would point out from the physician enterprise avenue would be incentive misalignment is really the top issue in a pressure cooker of a subsector.
So, you know, what does that mean, mis-alignment? We’ll try to explain it how physicians are reimbursed by payors, right? Medicare Part B has been flat for 25 years plus. How does that align with how physicians themselves earn income, especially employed physicians? And how does that itself align with taking care of patients, which everybody’s kind of here to do. Those things in most health systems aren’t well aligned. Independent groups do a better job of it.
But the reason there are so few independent groups is because of the lack of change in reimbursement rates over a 25-year period. So the unsustainability on the health system side seems to come from the subsidies that are paid to support physician enterprise. So I hear from a hospital, hey, we made $30 million over here, but we lost $28 million. And the physicians’ side, we’ve got a $2 million margin. It’s a half a percent of revenue. Whatever it is, there’s a lot of pain associated with that.
So when we think, about again how much we pay our doctors, you know, dish compared to reimbursement. So health system might get 125% of Medicare’s reimbursement. They might turn around and pay a primary care doctor 200% of Medicare or 175% of Medicare. So they’re upside down before they even incur practice expenses.
So this kind of structural subsidy is out there. It’s been out there for a number of years with the cost, like Juli mentioned, the change in labor cost post-COVID, right. The health system can’t simply absorb the subsidy like it used to. And so it used to be right, we have margin for mission. We’re bringing in doctors. That pressure, that compounding pressure is a problem.
And it all kind of comes back to alignment. Are we getting costs for value? So I’ve got multiple clients who cannot hire enough GI physicians. We’re short maybe 60, 70,000 physicians in this country. It’s expressing itself right now for a bunch of clients as a lack of access. If it takes 5 or 6 months to get endoscopy, you can predict that some portion of those patients who can’t get in are going to show up in the ER, right? We’re sort of going backwards on bending the cost of care.
So these are the kind of forces that are driving concerns in the Mindsets report. There’s a bunch of top issues, but ultimately it gets back to cost to value. And you know, how are we really you know, aligning those incentives. There’s a positive way to do it, but it’s a pretty narrow throughpath. It’s unlike it was even five years ago.
CHAD MULVANY
Given the current regulatory environment, regulatory uncertainty was the top concern for executives in 2025. In our last episode, we talked about how important it is for healthcare organizations to develop regulatory excellence, but getting to that point is not easy. What can organizations
do to navigate their concern, be it in the physician enterprise space of the long-term care space, help navigate some of these changes?
JULI PASCOE
Well, on the senior living and long-term care side, their regulatory environment has just as changed completely. And I feel like we are very you know, we have regulation coming at us from multiple spaces.
We just had the previous administration wants all of this transparency on the ownership of senior living and long-term care, and required a mandatory off-cycle revalidation for every Medicare provider. The amount and vagueness of information that is needed without much clear
guidance has been so overwhelming to a standalone nursing home, per se.
So we have that. We have a payroll-based journal trying to monitor staffing and every hour worked per patient day. We have our typical cost report. We have all of the MDS reviews that target, probe, and educate reviews.
It just, I feel like, if Randy uses a great term with a pressure cooker, our providers are getting hit from all sides with no additional
funding to help mitigate it.
So you have to stay informed. You have to know what is coming. You have to partner with people that can help you navigate that regulatory concern, because I don’t think in today’s environment, you know, there’s some large chain organizations that obviously can manage that better maybe than a standalone that doesn’t have those resources. It’s just a lot. There is regulation. I know that is something that the industry continues to speak up about. However, sometimes I feel like it’s not
as high on the list of priorities. But it’s definitely a big burden
for the facilities to have to constantly, try to report and more reporting and more reporting. It is a lot.
CHAD MULVANY
Well and to your point, even for large sophisticated organizations, some of this is so complex that, you know, they need somebody as well looking over their shoulder, providing advice because, you know, this isn’t the game or the environment that we’re used to played in. It’s moving so quickly and there’s so many different pieces that you have to think through because it’s, you know, I’ll use the ugly Christmas sweater analogy. You pull on one thread and the whole thing unravels if you’re not careful.
JULI PASCOE
Yeah. There’s deep penalties. There’s all kinds of implications
of doing these things wrong. Whether it’s your star rating goes down,
if you’re not reporting quality metrics right or your reimbursement goes down or you I mean, it’s and there’s so many negative consequences
of these facilities just for not understanding the complex
requirements that are in place.
RANDY BIERNAT
Yeah, Chad, I’ve come to view regulatory excellence as a value driver in healthcare organizations. Right. Different than compliance, which in my mind kind of relates to doing the minimum. You know, regulatory excellence is about finding ways to optimize, whether it’s reimbursement opportunities, you know, regulatory flexibility that comes out, whether it’s under COVID or other rules changes or finding creative ways to assess and manage risk.
Again, part of that is having a deep relationship with your service provider. But my observations that top-performing organizations have an internal culture or mindset, if you will, of creativity and vigilance
around the regulatory environment.
It’s just part of the work we do. Part of moving at the pace of healthcare is a focus on what’s happening in our space, and how can we take advantage of it, how can we move? How can we change?
And again, that the leadership teams that think about it, as a value driver, I think are more prepared, ready to get in front of stuff and seize early opportunities, you know, like in the physician space.
Going back to MIPs, early adopters did really well. People who were trailers in that are now sort of nowhere. Right.
And there’s a lot of neutralness to being involved versus the early adopters who leaned in and said, this is not that hard, we could do it, I think got the reward. Just one example I can think of. But that’s where my mind goes on regulatory excellence.
CHAD MULVANY
And, you know, you bring up a good point as it relates to regulatory excellence in the quality programs because there even though there are some, you know, relative performance versus total performance, you know, if you are late out of the gate on that, you do put yourself behind the curve in performance. And so it’s harder to improve. It’s harder to catch up.
The way I’ve always thought about it is early in my career as a consultant, brilliant, right out of college, my first spin, I noticed very quickly that there was a difference in organizational performance in those high-performing organizations versus those that maybe weren’t tended to view and include reimbursement in conversations earlier on in the strategic planning process for whatever the project was, or even the operational planning of the project. So that way they understood where there were opportunities and where there were also things that they might trip over if they didn’t fully take that into account.
Because, you know, if you’re not doing that, you’re either going to miss something that you could have availed yourself of or you’re going to miss something that is going to end up slowing you down and hamstringing you potentially.
RANDY BIERNAT
Yeah, I can words fail when I talk to non-healthcare folks family, you know, acquaintances, friends about how important reimbursement is. Everything rolls through a reimbursement lens. Every big decision rolls for reimbursement. Healthcare people just don’t understand. I do think it is one of the things that makes the sector unique.
CHAD MULVANY
If we switch gears and think about talent and workforce, which is another challenge that was an area of major concern for respondents to the Mindsets survey, less than half of executives said their current staffing levels meet their organization’s operational needs or the needs of their patients. How can healthcare organizations navigate the talent and workforce challenge in an industry that’s still facing shortages and still seeing high levels of burnout and turnover?
JULI PASCOE
Yeah, I think in senior living in long-term care, it’s going to be twofold, right?
It’s going to be and none of them are an easy solution or a short-term solution because it takes time to train additional nurses, attract nurses, retain nurses. That’s going to be the long-term play that hopefully, we can figure out how to do as a country. Probably immigration and figuring out how to do that and keep the workforce that we have in place and so that we do not lose them. If those I’ve heard of,
you know, facilities, I think visas are going to be expiring and that’s going to be a huge deal for them if they lose in certain areas of the country. Which is kind of terrifying.
The other thing, though, is I think leaning into technology and efficiency and thinking about how can we utilize that?
There’s so many things out on the market, in the senior living and long-term care space, too, you know, for fall protection and monitoring, it’s unbelievable. And it’s all moving so fast. I think technology’s going to be a part of it. We got to figure out how to pay for that technology to go back to that.
But then also, you know, maybe doing things a different way, like and when I say a different way, maybe not in the direct care, but going to the overall administration or all of this regulation. How do we outsource certain pieces as our business and have partners that can take care of some of this, so we can focus on what we’re good at, which is taking care of that patient, you know, so are we going to have to partner with people because we can’t do it all. And that’s what we’ve seen.
A huge thing coming out of COVID that people are realizing they don’t have that support and figuring out how to navigate that. So I think it’s all of those things. And I again, don’t think it’s an easy, one thing’s going to fix it all.
CHAD MULVANY
No, I think you’re right. I think it’s sort of a it’s an all of the above solution set, because you have to explore all of those avenues that you just mentioned.
Randy, what about on the physician side?
RANDY BIERNAT
Well, I think, a lot of what Juli said, I agree with. I actually
I agree with everything Juli said. I think a lot of it applies to the physician enterprise space probably applies pretty broadly to healthcare.
So I’ll sort of talk about maybe the physician recruiting level. So if we kind of go up to that skill set, It’s highly competitive. I mentioned earlier, you know, we have this shortage is maybe 60, maybe 70,000 again, it kind of depends on how you estimate it.
One of my standing recommendations is to have a polarizing compensation plan, something that’s highly aligned to your organizational culture and your target operating model.
Again, if you’re a health system employer, if you’re a super group employer or private equity employer, having a polarizing compensation plan helps physicians opt in or opt out to you. So everybody, for a new doc offers a guarantee, what happens then?
You know, standard base plus productivity, plus small quality bonus? That’s typical, right? Literally, a doctor can get 100, 200 offers. You mentioned, you know, health systems and others not being able to meet their staffing quotas.
One of my best clients told me, hey, we’re trying to hire 250 doctors. We’ll be happy if we can fill 100 of those spots, right? That’s just what do we have posted? What do we need? What do we think we’re going to get? That’s the kind of ratio.
And I would say they’re a very physician-friendly organization for whatever that can mean. But really, when I talk about a polarizing compensation plan, it’s being forward about how your organization’s different, right? How does your organization take care of physicians? What’s the experience? How do we take care of patients? What kind of lifestyle can it offer?
And so I think, there’s so many great organizations that have their own story to tell, and have great stories to tell. I think they resonate with different people in different ways. But then when it comes to the comp plan, it looks like everybody else’s.
And so when you’re short, I think you need to know who you are, be honest about that, and really try to get that alignment between the kind of doctor we need, the kind of environment we operate in. All of those things come together so that our physician can look at it and see themselves. Oh, I would like to be here as opposed to, hey, does it meet
my geographic needs? Right?
So you can either have a doc back into you, or you can have doc read words on a page, or connect with a recruiter and really feel like, oh, this is me, right? And so that’s the polarization we want. And we also want doctors who don’t want to work for you not to waste your time. Right?
We got to fly people in and we got to do visits when we’ve got a compensation plan and sort of approach to how we run our enterprise. That is clear and concise and positive, right? That that kind of polarizing piece is going to attract who we want, keep away those we don’t.
And I know some of my clients will say, hey, we’ll take anybody we can get. But really over a three-, four-, or five-year period, that’s just going to lead to turnover and things like that. So. Right. We want when our highly trained, you know, high-cost workforce comes in. We want them to embrace the culture. We want them to want to live in the community and things like that. So, really, when we talk about talent or workforce challenges, getting in front of it, strategically, with how you present to the marketplace, and walking that talk is really important.
CHAD MULVANY
You know what? I liked a couple of things about what both of you said. And Randy, I appreciate the fact that, you know, you asked a question about whether the “we’ll take anybody” approach is really the right approach just because of the turnover challenge and the cost of that turnover. And I think that’s an important thing for people to think about.
But then I also liked how both of you touched on, you know, think about for each position in your organization as it spans the wage skill mix or distribution. And what does it mean for each of those segments to be an employer of choice? What do these individuals value and how can you differentiate yourself? So not only can you bring them in, but they, you’re sticky. They don’t want to go someplace else because you’re providing value to them and meaning.
Despite the challenges and concerns we discussed, the executives we surveyed showed signs of optimism about their financial performance
and growth in 2025 and beyond.
Over two-thirds of executives project revenue growth of 5% or more for their organization in the coming years. What will organizations need to focus on in order to maintain financial discipline and achieve these growth targets?
JULI PASCOE
Yeah, so I’ve been going to board meetings a lot as we’re finishing up our 12/31 year-ends. And I feel like I’ve told every board we may have the first year at the end of ‘24, that’s kind of a normal year, that’s non-COVID. You know, census is kind of trended back up in a lot of our buildings to those pre-COVID levels, which census helps a lot of things in our industry if it gets back to those normal levels. Our payer mixes, while not ideal sometimes because we’re seeing managed care creep in there and they’re paying out of, you know, portion of those Medicare rates. So we’re having to learn with that.
I think there is optimism because they’ve adapted, right. These wage rates have went up. Turnover does seem to be I don’t want to say it’s over, but it’s not like what they saw in they kind of saw the worst in COVID. So what they’re seeing today I think feels a little bit more normal. And they’re very thankful for that.
I think in a lot of states, COVID highlighted the so, you know, highlighted the industry and the care that’s being provided. And they got some necessary funding with either add-ons or rebase things. Or so they’ve got a little bit more money, they are still probably not fully funded, but they’re better than they were.
So they’re building on these small. But then we get this provider tax discussion that kind of comes out of nowhere right, that I don’t think anybody saw coming, though we’ve heard whispers over this for the year.
So while everyone’s optimistic, at the same time, I think we all know that what we’re faced to do is take care of these patients, which are not easy patients to take care of. They’re getting more acute, you know, in our skilled population, in our long-stay population, those patients don’t look like they did 15, 20 years ago. So how do we take care of them? How do we keep that dignity? How do we provide that quality of life kind of do it on that shoestring budget that our government can afford to pay?
So I think it’s optimistic. But at the same time, we have all of this that we’ve still got to figure out. And I think we’re all figuring it out
together.
CHAD MULVANY
You know, Juli, I think I like the fact that you kind of mentioned the transition from COVID, because I think one of the things that in retrospect, that the pandemic and the public health emergency forced us to do was 1) figure out how to become more efficient, to make do with what we had and still provide that high-level care, dignity of life and setting. But then 2) it also taught us how to make those changes quickly. And I think that that muscle memory, if we have it on the provider tax, will help us figure out what the next spin on transformation needs to be
if we’re going to be sustainable. You know, whatever happens through reconciliation. And so I think those were important lessons to pull out of the pandemic.
JULI PASCOE
I agree. And then as we’ve worked with different state associations on these Medicaid plans, kind of laugh that they have been built on, I call them Aunt Betty’s farmhouse. They started out as this, and then they’ve been added on to and added on to and added on to to try to get more money to meet a need, for our patients. But if you step back, a lot of them are complex and make no sense on how we’re funding for our patients.
So I think transformation is going to be something the industry has to face at some point. And at the end of the day, everybody wants to fairly pay providers for the care that they’re providing. And it becomes it sounds so easy when you say it that way. But the systems we’ve developed to do that are very complex.
CHAD MULVANY
Randy, how about you from the physician practice side, what are physician enterprises going to need to do to maintain financial discipline and hit those growth targets?
RANDY BIERNAT
Yeah, Chad. So physician enterprise and most of healthcare really is in a phase of annual margin repair, right?
Structurally, we know or we can predict that government reimbursement is going to be flat to negative. And we’re going to expenses going up 3 to 5%. Like, we just know this thing is true. So we have, you know, that type of expected margin deterioration can only be fixed through growth on a sustained basis. So getting costs right-sized is really important. But it’s really challenging to sort of cut your way to success year after year after year. So, the answer always comes back to growth. You know, we kind of talked about our mindsets and aligned growth and for me, that kind of aligned growth in the physician enterprise space is really critical because of that baked-in and subsidy to the enterprise, right.
So not every referral, which no one can pay for, pay a doctor for. But it used to be that pretty much every referral is a good referral. And that’s just not true anymore. Right. So we need to think about access. But really getting aligned growth, right kind of growth, being wise around that. So, discipline on alignment is really critical making good long-term decisions that will support sustainability and be the right kind of growth.
CHAD MULVANY
No. Great example.
This has been a really insightful conversation. Any last takeaways from the 2025 Mindsets report before we close out?
JULI PASCOE
I think it was actually consistent with what we’re hearing, so it was great to have that confirmation of what was on these executives’ minds.
And hopefully, we can all take that and keep talking about, because, again, I think it’s gonna take us all working together to come up with these solutions that are going to fix a lot of the concerns that they have. So hopefully we continue to play a role in that.
RANDY BIERNAT
I completely agree with Juli. Also go a little narrower on, you know, a takeaway, the concerns that we see in the physician enterprise space. A lot of those can be addressed proactively.
So, long term, physician and advanced practice provider workforce planning is the best practice. You know, what I see in my practice day
to day is there’s so much reactionary and defensive activity in physician deals, arrangements, and that those kind of reactionary and defensive actions are really just another form of kicking the can.
So while it’s much easier said than done, that sort of strategic workforce planting, kind of like planting a tree: best done long ago. And if not then, then now. Right. So now is the best time to set the foundation for future success.
The physician enterprise, and really workforce strategy is the key, especially when we think about the age of physicians, the kind of turnover we can expect. We can have a workforce that looks a lot different in five years by doing work today, or we can do nothing today and our workforce at five years will look a lot like it does today.
And right, so much of the challenges we have a lack of alignment. And so it’s just one of those things. It is hard to get the ball rolling
and get in front of. But that would be the encouragement
to get in front of really all of the main issues we saw in the Mindsets survey.
CHAD MULVANY
Well, Randy, Juli, thank you again for joining me today and sharing your insights. I also want to thank all our listeners for tuning in. In the show notes we have a link to download and read our Mindsets 2025 report for more insights from our survey of healthcare executives.
Hope you’ll join me in two weeks for the next episode of Achieving Health. Until then, hope you’re well.
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