Happy Tuesday, Hospitalogists! How bout them Olympians? Seriously, the Olympics is such a cool event. The life stories, heartbreak, country pride, learning about random sports and their rules and of course becoming experts in them in the span of 10 minutes, and, best of all, athlete triumphs are second to none. Today's Tuesday send is back to the usual news roundup + analysis. Then this Thursday kicks off a series on the public, for-profit hospitals: part 2 of my Ardent analysis followed by HCA, Tenet, UHS, and CHS Q2 highlights in subsequent weeks. Let's dive in! Thanks so much to Navina and UKG for sponsoring today's send. |
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The most important news from the week |
Humana's CenterWell takes over leases at 23 Walmart Health sites |
On July 24th, Humana announced intentions for CenterWell, its senior advanced primary care clinic operation, to take over the leases at 23 now-defunct or not-yet-open Walmart Health clinic locations. Sites are located in 4 states - Florida, Georgia, Missouri, and Texas. Humana will rebrand the clinics to CenterWell and Conviva and will have the clinics open by 1H 2025. For Walmart, at least in 23 of the planned 75+ locations, the retail giant locks in a long-term lessee for dedicated healthcare space going otherwise unused for a while. Walmart also gets the whole retail health thing in some more foot traffic to its stores. On Humana's end, without knowing the structure, I'd wager they got a pretty good deal here. Humana probably cherrypicked locations and the clinic buildout is already done, meaning the payor doesn't have to spend any $ or wait at all to start acquiring patients. So while not perfect, it's a low-cost, low-ish risk entry into these settings. The bigger question facing CenterWell in this environment is simply whether potential patients want to receive advanced primary care services co-located or attached to a Walmart! Makes you wonder where Walmart and Humana would be had that merger gone through... |
A Quick Hospital Earnings Roundup |
Over the next several weeks, I'll be covering each public hospital co's Q2 results so be on the lookout for that! For now, here they are: HCA posts $17.5B in revenue in Q2 and raises full-year guidance (expects a ~19.8% adjusted EBITDA margin on revenues of ~$70B) |
Tenet raises full-year guidance again (hey Tenet if you wanna update this deck design I'm available) |
UHS beats second-quarter profit estimates on higher hospital admissions and also raises its guidance. It's good to be a large health system in 2024. The pendulum has swung very far in their favor. |
CHS slims losses in Q2 but falls short of Wall Street projections |
Bonus round! Here's Centene's Q2 earnings as well as a bonus. $39.8B posted in Q2 revenue, 87.6% MLR, 8.0% admin ratio, 30%+ growth in marketplace membership, and ~18% decline in traditional Medicaid membership |
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Blake's Weekly Executive Summary |
Key considerations for decision makers. Notable moves, policies, and strategies |
PBMs continue to stay under intense scrutiny during a House Committee on Oversight and Accountability hearing hearing, as lawmakers were disappointed with executive answers on PBM practices. The question is whether anything material actually comes from this, or if PBMs escape for another couple of years until they're called to the Hill again. Keep an eye on this ruling re: the FTC and non-competes, as a Pennsylvania court rejected an attempt to block the non-compete ban. From the article: - We anticipate that ATS will appeal this preliminary injunction ruling to the US Court of Appeals for the Third Circuit. We also anticipate that the parties in Ryan LLC v. FTC will prevail at the district court level and that the FTC will appeal the court's final injunction decision to the US Court of Appeals for the Fifth Circuit. The outcome of these two cases at the federal court of appeals level – and likely others as more challenges are brought – will likely be reviewed by the US Supreme Court in the coming months.
Keep another eye out on this development over potential healthcare M&A regulation. No real traction, but the proposed Health over Wealth Act would give HHS the ability to require private equity firms to obtain licenses in order to engage in healthcare-related investment. HHS would then be able to revoke licenses for certain bad actor behavior. Lots of interesting proposals in this one and some overlap with what I proposed in my private equity healthcare article (escrow fund creation, sale-leaseback reform, private equity task force, etc). Ascension sells 9 hospitals along with the associated ambulatory footprint and post-acute to Prime Healthcare Services, and I'm not sure why Prime, one of the largest private, for-profit health systems, is buying the portfolio Ascension couldn't wait to get rid of in the greater Chicago market. It'll be interesting to see what Prime does, but the bigger story here is Ascension, which is on a journey to scratch and claw its way out of the operating hole in what should otherwise be a cozy operating environment for large regional health systems. For you Ascension & Prime folks out there, would love to hear from you! Flo Health - yes, the #1 downloaded women's health app - raised $200M in a Series C with a $1B+ valuation today!! General Atlantic's minority investment and partnership into the women's health consumer app "will help position Flo for its next phase of growth, with a focus on expanding into new user segments including perimenopause and menopause, enhancing its tech-driven health insights, and pursuing strategic expansion opportunities. "To support these ambitious goals, Flo intends to increase R&D headcount with investments in top-tier talent across its global offices in Europe and North America. Flo also intends to leverage General Atlantic's significant expertise in scaling companies at the intersection of consumer technology, healthcare, and subscription business models." The Senate HELP committee issued a subpoena for Steward Health Care CEO Ralph de la Torre, a physician, to answer for his war crimes in running Steward into the ground. |
- Working with private equity executives, Dr. de la Torre became obscenely wealthy by loading up hospitals from Massachusetts to Arizona with billions in debt and selling the land underneath these hospitals to real estate executives who charge unsustainably high rent.
- As a result of Dr. de la Torre's elaborate Ponzi scheme, Steward Health Care, and the more than 30 hospitals it owns in 8 states, were forced to declare bankruptcy with some $9 billion in debt.
DeepScribe wins an enterprise contract with Louisiana-based Oschner Health to serve up to 4,700 affiliated providers in ambient documentation. According to Ochsner's latest financial filing, the health system employs 1,706 physician FTEs. 1,600 affiliated physicians hold board certifications in 90 specialties. Ochsner also trains 900 medical residents and fellows annually, and outpatient clinics saw 4.1 million visits in 2023. Anyway, DeepScribe won out over another 'unnamed' tested AI scribe vendor (gotta be Nuance) and key differentiators mentioned were customization and flexibility of template design, willingness to address problems with nuance (pun totally intended) and integration. Besides primary care, other specialties tested were palliative care, oncology, and nephrology, including a purported 75% clinician adoption rate. A must-read article published from Bloomberg on the concerning state of nurse practitioner education is making the rounds across healthcare organizations this week. I've connected with several folks working in this space, including a firm called Whitecoat Technologies, looking to make NP education better and more cohesive. We need to standardize NP education and understand where gaps in learnings are, because shortfalls affect all of us - NPs are the fastest growing. |
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Join UKG for the Industry Insights Digital Summit on August 8, from 12 PM to 4 PM ET. This free, virtual half-day event features 12 thought leadership sessions focusing on empowering frontline workers through trust, belonging, and connection. It's an opportunity to earn SHRM and HRCI credits, connect with industry peers, and hear from UKG experts. This will be perfect for leaders who want to enhance frontline work experiences and have some fun along the way. Can't make the live event? No worries, you can catch all the sessions on-demand until October 20. Secure your spot below and start building a better frontline experience. Register now |
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Here are some jobs that I'm curating for the healthcare industry. You can see the full list of jobs I've curated here. If you're looking to hire, use the promo code HOSPITALOGY to get your first job listing free on my curated job board. |
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Thanks for the read! Let me know what you thought by replying back to this email. — Blake |
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