LevinPro HC’s Kate Humphrey attended McDermott Will & Schulte’s HealthEx, a powerhouse summit that brought together healthcare leaders in Nashville, Tennessee. For two days, industry leaders and experts partook in engaging conversations about the complexities of the current healthcare landscape. Attendees sat in on sessions that ranged in topics from reimbursement trends in the Behavioral Health Care market to scaling AI in health systems to the overall state of M&A.
Here are several of our key takeaways :
Organic and Intentional Growth Over Scale
Several panels discussed the idea that many investors, especially in the outpatient and Physician Medical Group (PMG) markets, have shifted away from a roll-up strategy and focused on de novo growth. Many investors have begun prioritizing clinical and operational growth over scale for scale’s sake. However, other speakers were quick to point out that the focus on de novo growth won’t slow M&A; rather, it will be more focused on select specialties that allow investors to capture patients throughout their entire health journey, such as urology and OB/GYN.
The focus on select assets extends beyond the PMG space, as intentionality was a recurring theme throughout the conference. With many acquirers becoming more selective and calculated with their investments, facility space, imaging capabilities and durable equipment services, for example, have become sought-after assets.
Pros and Cons of AI
At past conferences, the conversation around AI tended to focus on administrative and billing automation, but this year at McDermott’s HealthEx, the dialogue has shifted. While the hype around AI in those spaces has not died down, the conversation has also expanded to discuss how to migrate AI out of the exploratory phase and into scaled implementation.
Yet, a large portion of the sessions also discussed the drawbacks of AI, especially for providers and patients. One speaker even said that the biggest competition among health systems isn’t with each other but with AI. As patients frequently use AI models to self-diagnose, many patients either bypass professional care entirely or seek highly targeted treatments that may miss the root cause of their issues.
Another facet of AI that raised cautious concerns was its use of outdated information, particularly in women’s health. As women weren’t commonly included in clinical trials until 1993, much of the data AI draws upon for diagnoses is outdated and inaccurate. In this, they urged investors to exercise caution when rolling out AI for clinical use.
The Longevity of Home Health
In the home health-focused panels, much of the discussion centered on the longevity of Home Health, particularly given its flexible payment structures. The prominence of cash-pay models for home health services is enabling faster, lower-cost access to care, bypassing traditional insurance challenges and ensuring continued patient use.
Another point that several speakers hammered home was the application of patient data to relieve pressure and expand care services. Stronger patient data enables better care coordination, consumer choice and operational agility for providers. Utilizing the data has also helped increase margins because in-home providers can treat complex variants more accurately, a key aspect of value-based care reimbursement models.
Regulations and Policies
However, not all sentiments towards the health of the Home Health & Hospice market were optimistic. Earlier in May, CMS announced a temporary moratorium on new Medicare enrollment for home health and hospice agencies. While it is too soon to fully assess the impact, the announcement was a major part of the discussion as panelists speculated about its potential to increase transactional and operational risks for organizations, providers, and investors.
Additionally, multiple speakers highlighted smaller CMS rulings that are reshaping reimbursement policies, site-neutral policies and payment methodologies. Specifically, multiple panelists noted that CMS mandated a temporary 2.5% statutory update to the Medicare Physician Fee Schedule conversion factor, which increased a physician’s pay. However, when combined with newly introduced CMS “efficiency adjustments” and budget-neutrality shifts, the actual financial impact varies significantly across different healthcare sectors and specialties. This was met with backlash from Congress and physicians over its short-term nature and inability to offset broader reimbursement pressures.
Keep an eye out for an upcoming wrap-up that will dive deeper into specific details from the conference.
