Episode Description
In this episode of the Health Systems CXO podcast, Brian Contos discusses the current challenges facing health systems, including financial pressures and policy changes. He emphasizes the need for health systems to rethink their growth strategies, focusing on operational scale through AI and site of service optimization.
Key Takeaways
Health systems are facing renewed margin erosion, driven by rising labor costs, inflation outpacing reimbursement, and chronic underpayment from Medicare.
The reconciliation bill is introducing major cuts to federal Medicaid and ACA funding, increasing the number of uninsured patients, and straining provider finances through reduced coverage and 340B eligibility risk.
Operational scale and site of service optimization are essential, complementary strategies for growth without proportional cost increase—critical in a low-margin environment.
AI-enabled efficiencies in documentation, OR scheduling, and patient navigation are generating measurable ROI and creating new revenue streams, not just cost savings.
Health systems must move beyond “ASC 1.0” thinking. Ambulatory Surgery Centers (ASCs) should be integrated into enterprise-wide strategies, not treated as standalone assets, especially in light of competitive pressure from for-profit ASC operators.
Site-neutral payment policies should be seen as a strategic opportunity—not just a reimbursement threat—by building integrated care networks that compete on value.
Effective implementation requires prioritization, operational redesign, physician alignment, and bold repositioning, not incremental adjustments.
The full transcript of our conversation is also available to read. Show the Transcript.
Robin Brand
Robin Brand serves as VP of Industry Insights at The Health Management Academy.
Brian Contos, is the Senior Vice President of Member Insights at the Health Management Academy, who recently led a compelling virtual forum with Health System Chief Executives on Agile Scaling and Asset light approaches for health system growth.