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DigitaLee 11: Crypto Scams on LinkedIn and Tracking Pixels on Hospital Websites

Orange text that reads "The Digital Future of Healthcare" with smaller text at the bottom saying "DigitaLee with Lee Aase" on a navy blue background

This week on DigitaLee, David Shifrin and Lee Aase talk about digital security in two forms. First, the general trend of hackers and scam artists constantly finding new ways to snag your info…and money. These days it’s a cryptocurrency scam on LinkedIn costing people tens of thousands of dollars. The second thing is the recent news that many hospitals have tracking pixels placed not just on their websites but on their patient portals. That’s bad news and a bad look when it comes to healthcare marketing and, most importantly, patient privacy.

Listen and subscribe to the podcast, or read the transcript below.

Read the Transcript

David Shifrin: All right. So a brand new topic today, Lee, something that nobody has ever talked about before, ever. We were digging under rocks and found this. No, it’s not true. I wish it was true, but it’s not. Conversation today about cybersecurity and protecting our own personal information, and this really started with an article that we found – I think it’s from CNBC – talking about a LinkedIn scam where people are creating fake profiles and then pulling people into cryptocurrency scams while they pose as financial advisors and bilking people out of a lot of money.

So that kind of raised the issue of you always have to be wary about what you’re dealing with online, and then led into sort of a wider conversation about just personal information online in general, which brought up this other new problem that has been revealed recently, where tracking pixels have been placed on not just hospital websites, but in some cases on patient portals. And that is allowing for the transfer, the sale of private health information and other personal information from patients to be sold.

Lee Aase: Yeah. the LinkedIn article – the article about using fraud on LinkedIn, people setting up fake accounts and enticing others into investing in cryptocurrency – and then the story the one person featured was that that they had been directed into Crypto.com, a reputable site, and then building that relationship and then over time having it being migrated or being encouraged to migrate into another site owned by the other, by the bad guy. So I think it’s just good for us to know that people who are wanting to do us ill are restless. Restless. They do not rest and they’re very eager to exploit opportunities.

I see it all the time with text messages that I get saying “an AT&T message: your bill has been paid and please accept your gift” with a link to click, there’s all sorts of just shady things like that are happening. And just I guess eternal vigilance is the price of liberty, as the old saying goes, or the price of yeah, economic liberty. Because the person in this particular case had lost $280,000, had been swindled out of that. And I guess what we’re seeing with these digital platforms is just a lot more opportunity for people to have a broader, for the bad guys to have a broader range, broader scope in terms of an audience that they can try to exploit.

DS: What’s interesting about that article too, I thought, was that it highlighted that LinkedIn is a good place to scam people because people look at LinkedIn as a relatively safe professional place to go. And I think your point is exactly right. They just have to be wary and can’t, frankly, can’t trust anything.

LA: Yeah. They also post that they work at a given institution or for a given company. And there isn’t any verification of that. That’s they’re alleging that. And I’ve had that back before, in my days working with Mayo Clinic, somebody would say they were a Mayo Clinic employee, and they were reaching out to me, and I’d look them up in the directory, in our online directory, employee directory to say, so is this even really a…I don’t recognize this person, is this a Mayo person? But it’s so easy to just say, oh this is somebody who works with me. Yeah, I’ll accept them, whatever.

DS: And then I don’t know if you want to talk about this here, Lee, but you had mentioned too that you had a recent experience with some bots and spammers that fits in with this.

LA: Yeah, it was just crazy. It was right along these lines. And speaking of AT&T, I got a call from AT&T that someone was trying to purchase a phone using my phone number and they had, they were calling to confirm that it wasn’t me, or to check that it wasn’t me. And I said, no, that’s not me.

And when I hung up, I opened my email and I had about 200 different email list subscription things that were coming in saying thank you for signing up for the Indiana Department of Labor list and for the US Agency for Economic Development. And so I did a Google search and said, so why am I getting all these emails for subscription lists?

And I guess this is a scam that’s happening now, where people do some kind of a hard, they were trying to get a free phone, and what they’ll do then is use your email address to subscribe to email newsletters that don’t have a captcha on them, you know, prove-that-you’re-human kind of thing, so then the idea is that when that, AT&T notification comes that it’s swamped by all these other emails that you’re getting as well, and you end up deleting it and not recognizing that it’s happening.

They’ve harvested the lists of all these places where they can push one button and put in your email address and subscribe you to all of them through a bot, and then it’s just a matter of creating chaff, creating counter measures that prevent you from seeing what’s going on. So yeah, that’s just one new wrinkle about the relentlessness and restlessness of the bad guys in terms of figuring out new ways to cover their tracks.

DS: Lee, let’s flip this then from sort of our responsibility – it’s always our responsibility to be vigilant – but to think about this in terms of what we actually give permission for and our expectations around privacy. Our information, as everybody knows, is out there everywhere; we sign up for Facebook, we sign up for Twitter, we sign up for anything, and with cookies we’ve just signed our whole lives away. And yet at the same time, there’s still an expectation, right, that certain elements of our life should be private, particularly when it comes to health.

And so that is a concern now with these, the exposure of tracking pixels being placed on provider websites and on patient portals. So talk a little bit about how social media is collecting information, how these pixels work and why it is possible.

LA: Yeah. When a pixel gets placed on a website and whether in this case that we’re talking about here, you’re talking about patient portals, I think that’s just amazing to me that someone would think that was an okay thing to do. It’s one thing when it’s a regular hospital website, when you’re into the patient portal, then you’re looking and you do events that trigger capture of information.

And they were talking about that; the name of the patient, the time of the appointment and the doctor…so if it’s a specialist in gynecology or in other, whatever specialist, whatever specialty it is, it can be pretty revealing of what kind of interest or condition that the patient might have.

I think hospitals and health providers that are dealing with pixels at all on their sites are really setting themselves up for pretty a big privacy concern blowback, that there will be some episodes like this that will come in the future where information gets disclosed, that somebody will raise a major issue and people and organizations that are using these within their sites are going to be not in a good spot. They’re going to have reputational risk. And I just don’t think…they have reputational risk now, they will suffer reputational damage and there will be concern about it that’ll be hard to erase.

So I would really recommend that hospitals and other providers be super reluctant to engage in that and maybe be very careful. And I don’t know, there was the old Ronald Reagan saying “trust but verify”, but I don’t know, you know, I don’t think you should trust. I think it’s just, it’s playing with fire to be messing with that.

DS: So it does put a little bit of a crimp on marketing plans, because if you just say, look, we’re not going to mess with this at all, we’re not going to mess with pixels, then that does – and talking on the main website, not talking about patient portals, that should just be a given – but if you say we’re not going to even go near the fire much less play with it, then yeah.

That could have potential implications for how you’re doing retargeting, how you’re setting up your advertising campaigns. But I think that the challenge then is, or the call then is just to find other ways to reach people, use other tools. But don’t put yourself in a situation where you’re unwittingly violating all kinds of patient confidentiality.

LA: If you’re the gateway for information getting out about your patients, and even your prospective patients, getting shared with others and sold to others, that’s just not…marketing is something that’s done in healthcare, obviously needs to be done, but that needs to be put in and it needs to be in a very circumscribed place so it’s not doing harm to the people that we’re trying to serve.

DS: So then Lee, for the tip, I think that kind of is it, but more specifically, what are a couple of things digital teams should, after listening to this, should go and check, or that an executive should ask their team to make sure everything’s okay?

LA: Yeah, they should just be definitely finding out what the organization is doing and has done with pixel placement and use of these, and if they’re going to go into it, going with eyes wide open and really understanding in what limited respect they might consider using something like this, but it is playing with fire and likely to get burned.

DS: Okay. And then the other piece of this, again flipping it back towards the patient then, is so often we’ll get emails from different service providers saying whatever, “Xfinity will never call you requesting your password or your social security number,” something like that. And I think that ends up in the material that we get from hospitals or doctors’ offices in that sheaf of papers that we always have to sign in the privacy practices. But I think it’s also important just to, it’s one more responsibility on the providers, but to take the time to explain to your patients how you collect information, how you ask for information, what you’re doing, and to really give them the resources that they need to protect themselves and their personal health information.

LA: And in a way it’s like the survey fatigue that we all have because you get this “American Express wants to know what your experience was like with your most recent person” or Delta airlines or whoever. And with all these disclosures of privacy practices as the consumer, it is bewildering.

It’s just, it’s a snowball. And so finding ways to, as healthcare providers, to be clear about that and eliminate the jargon and try to be plain English communication. But mainly don’t do bad things. Use the mom test: what would you want happening with your mom’s information? And golden rule: doing unto others is you’d have them do unto you, that if you wouldn’t want your information used in that way, you probably ought to not be doing it. Especially given that many of our, many if not most, of our healthcare providers are nonprofits, so you’re supposed to have a charitable public service orientation. I think that weighs very heavily on the level of caution that you should be exercising when engaging in any of this kind of stuff.

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Communications Guidance on Roe v. Wade

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It’s here.

Today, the United States Supreme Court struck down Roe v. Wade.

The ruling is “one of the most consequential in modern memory.

Across the country, healthcare providers are deeply involved in the private and very public conversations happening in light of the seismic decision.

The questions we’ve been asking since the leak have been answered. This is a moment of divisive and profound emotion. Celebration and relief on one side. Fear and anger on the other. Exhaustion by all as our country is further unsettled.

Hopefully, you’ve done the homework recommended several weeks ago. Either way, here’s immediate guidance.

Speak. To whom and how depends on your community, your culture and position. But the people important to you – your colleagues, nurses, allied physicians and, likely, your community – want to know how today’s decision affects them; how, as an organization, you’re thinking about it and acting on it; and what the longer-term consequences might be.

There are (too) many hot button cultural issues today, some of which healthcare leaders may have strong opinions on but little standing. Weighing in on the war in Ukraine is a local decision.

The redefining of women’s health services, however, is squarely in your lane. It is where your voice is uniquely trusted, needed, expected. Again, whether to have a message on this issue is not optional. Not addressing it – the choice of silence – is a powerful message, too. Choose words.

Here’s where to start:

  1. Align your team. This issue is divisive enough; your organization should speak now with one voice. Gather your leadership group as colleagues, listening to each other in a spirit of friendship, good faith and a shared commitment to the mission of care. Find that common message.
  2. Know your record on abortion services. You have an obligation to follow all laws and regulations. You also have a mission to care for those in need. How have you been operating and, now, how will you operate in the context of your state’s environment?
  3. Equip leaders. Send your managers into team huddles with the tools they need to listen effectively, guide conversations as appropriate, and allow people to express how the news is affecting them while keeping things civil and centered on the common mission.
  4. Check in with employees. Provide channels for team members at all levels to learn about the organization’s stance and how it affects operations, while leaving space to provide input.
  5. Support your clinicians. There’s deep concern about the legal risk faced by physicians who provide women’s health services in states with existing or soon-to-be-passed restrictive laws. Get your legal, clinical, financial and marcom teams together to discuss how you’re handling this and how quickly you can move. Then, meet with the clinicians who may be affected to discuss your plans and listen to their concerns.
  6. Check back with your GR team. Your state officials have been planning for this decision, and it’s a fair bet that your legislature’s and legislators’ plans have been all over the news. Even so, there may be nuance now that the decision is official. You’ll want to know.
  7. Anticipate “what now” questions. Be ready to speak directly to the questions that are asked, but don’t feel like you must have an answer to every question. This is new. Similarly, don’t get bogged down in discussion on scenarios that didn’t come to pass.

This is a hard moment. We know it demands the very best of each of us as we move through this fractious time, and as you take on this challenge for your organization. Mission, culture, zip code and politics all play a role in how you respond. Why so hard? Because it raises the questions, “Who are we as an organization?” and, “Who do we choose to be?”

We also know this is the latest in a relentless accumulation of hard moments. As you rise to the occasion – again – take care of yourself and your team. And know that we’re in it with you.

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DigitaLee 9: Marcom’s Role Helping Healthcare Providers Address Gun Violence

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This week, former head of social and digital at Mayo Clinic Lee Aase and Jarrard’s David Shifrin talk about recent mass shootings, including those in medical facilities in Dayton and at St. Francis in Tulsa. We’re horrified by what’s happening, and there’s so much to deal with here, but because this podcast is focused on helping healthcare marketing teams in their roles as the voice of the organization, we talk about some things that digital marketing and communications pros can do to help guide messages around the issue of gun violence. And, maybe reduce some of the criticism that often follows any kind of difficult situation.

Listen and subscribe to the podcast, or read the transcript below.

Read the Transcript

David Shifrin: So Lee, good to see you again. Last couple of weeks have been a challenging time in society and healthcare. So many national headlines across the past couple of weeks and the numerous headlines around gun violence. We were looking at this issue with the mass shootings and Buffalo and in Texas.

And then just as we’re sort of trying to process that, then we see gun violence come to healthcare facilities in Dayton and Tulsa. We see healthcare providers in the middle of this issue and in this conversation for multiple reasons, and so in all of that, marketing and communications and digital teams are having to craft messages around challenging issues. And in this case today, specifically around gun violence, and do that in a way that is meaningful and addresses the issue in a meaningful way.

So I wanted to spend some time with you thinking about how we can support marcomm digital folks at healthcare providers, and just give them some things to focus on very practically as they are dealing with all of this input and trying to craft messages that are productive for the community.

Lee Aase: I would just say, first of all, it’s just a gut-wrenching time when you’re faced with all this stuff, and when we’re seeing just the devastation that comes from this stuff, and people immediately want to say “We got to do something. Okay, we gotta have a response,” and that’s totally understandable.

It’s commendable, that people would say “we want to do something about this,” but it’s like, what’s the thing that you do? And these are the kinds of issues on which reasonable people disagree. They have different solutions, and nobody wants to see schools get shot up or healthcare facilities get shot up.

And so how do you deal with the environment that we have? How do you deal with the constitutional issues that we have? As well as then some of the things like the mental health crisis, which is obviously behind a bunch of this, when you see especially in some of these mass shooting events.

And we were talking a little earlier about how for children that gun violence is, like, just inching up as the number one cause of death now. And that’s not just mass shootings, but it’s the day-to-day kind of mayhem that’s happening. And so it is, it does put us in a tough position to try to…because the desire that people will have is to have some kind of response. And then they say our thoughts and prayers are with them, and people are like, thoughts and prayers don’t do anything! And then you get into, yeah, we’ve all lived that. We’ve all lived that.

DS: It devolves so quickly.

LA: Yeah. And so I think from my perspective, the thing is as marketing communications, people working on behalf of organizations, our job is to help the leaders accomplish what they’re trying to accomplish, and what is the goal that they have by doing this thing? And thinking through what the implications are and how they might say this and, you know, put together messages that aren’t accusing everybody else who’s on the other side of, who has a different opinion or bad faith, and to try to create an environment of respect. And I realize I’m saying this in the context of online discussions, how’s that going to happen?

But starting within the organization, probably, that’s where there is more decorum perhaps, starting the conversations internally, close to home and talking about as organizations, what concrete positive steps we might take.

And some of it might be around mental health and that they’re really addressing some of that, but it’s a vexing time and it’s really a time when, for people who are in that, in the public eye and kind of feeling like there’s a need to take a public stand, it does make it complicated to try to say, so if we take that stand, what are going to be gaming it out? What are the follow-ups that are going to come out of that? And what are we prepared to do that would make a difference?

DS: Yeah, I think that’s such a good point because putting a statement out about gun violence, it has to go beyond saying we’re against gun violence. That’s basic, that’s a default position, right? Nobody is for gun violence. So then what, where do you go from there?

LA: And then I guess the other thing to think about with that is that okay, when we’re making this statement, what action are we prepared to back it up with from our organization? How are we going to constructively contribute toward this, other than saying these guys should do this or these guys should do that.

It’s like what, if leadership means leading, means doing something that is helping to solve the problem versus pointing fingers at other people and saying that the problem’s with them. But for a healthcare organization if you really are seeing it as a public health crisis or public health emergency, public health issue at least, then what can the healthcare organizations uniquely contribute to it that other organizations can’t?

DS: So yeah, I think it makes a lot of sense. And so for marketing and comms folks, it’s helping to guide those conversations. You’re saying supporting leadership in kind of helping to push leadership towards those specific actions and commitments.

And so making sure that the words and the actions match up, and I think there is a unique responsibility and opportunity for marcomm folks to be able to do that; to look at what is being said and then say are we, how are we going through this? And working with operations and clinical and finance to say let’s get everything lined up so that when we say “here’s our statement,” we can also then come in and say “here are the things that we’re doing next.”

LA: Yeah. And we’re prepared to deliver and we’re going to execute on it and yeah. And to do it in a way that doesn’t inflame the situation more, as I said assumes good intentions on behalf of the people that are engaged in the conversation so that it doesn’t devolve, as you said.

DS: Let’s look a little more specifically now at an individual incident.

What about on sort of the backend of a situation that’s going to inevitably, unfortunately, lead to people criticizing your response?

It’s just, it’s what happens. People want something different than what they get by default. And so is there anything that folks should think about saying or not saying in response to potential criticism about what they said, how they handled it, et cetera, et cetera?

LA: I think just humanizing the people who are involved in the response, just emphasizing that we’re all torn up by what’s happening here and we’re doing the best we can in the moment to be able to give people the information that they need and deserve and want, while also protecting the privacy of the, we’ve got HIPAA, we’ve got all these other issues that we need to deal with as well.

And I think the big problem we’re seeing in society in general is just a lack of empathy. A lack of being able to see from the perspective of those involved. And so by humanizing, even this might be a place where the people who are involved in telling the story, maybe even featuring them in some of this, telling that story of what it’s like to be dealing with a situation like this. Because especially on a, if you’ve got a social platform where they see the organization’s icon is the response to you and it’s not coming as a real person, then it feels disembodied. It could be an AI bot on the other side that’s responding to you. So creating that more warmth, more personal bonding there, I think is something that yeah, particularly in the aftermath that you might help people understand that nobody signed up for this, this wasn’t part of the…yeah, you signed up for it and you handle things as they come in, but it’s challenging for everybody involved.

DS: I love that advice for just humanizing and bringing the people who are behind those accounts, the admins, putting their names and faces potentially behind it. I think that’s really cool.

Okay, Lee for the last segment this was a question that we got sort of through some of our client-facing folks here at Jarrard and I thought this was actually a little bit tangential, but it’s really, yeah, an interesting, the different types of crisis response.

And I thought we could talk about it here a little bit, you know, call it the question from the community, is when do you activate a response to something that’s been said on social media? And again, kind of goes back to what we’re just talking about when people come after you verbally. Not thinking here about a negative review or, oh, I wish this had been better or the parking was crap, but just somebody who’s really upset, getting a little bit loud, you know? So is there a framework or a rule that should inform when you stay quiet, when you go public, when you respond to people directly? That mini reputational crisis.

LA: It’s a sort of a mini Hippocratic oath for political, for communications, for online: don’t make it worse. So first you just need to make the judgment: is this going to amplify, is our engagement with this going to amplify it and spread it to a broader audience than if we tried to deal with it in another way?

I think always, if there’s an opportunity to reach out and connect with a person to try to take that discussion offline, to try to identify if there’s a way to face to face, human to human, be able to work through it, that’s a win. Or if you’re able to.

There’s sometimes that’s just not going to happen. There’s just a level of animosity built up. That’s where blocking comes in, and on some platforms that’s not available, but you see that happen sometimes on Twitter. I can say I’ve never blocked anybody, I’ve never had to block anybody, but you see sometimes that with muting conversations on Facebook or whatever, that sometimes people have had their say, you haven’t muzzled them, you haven’t stopped them from being able to express themselves. So it’s not de-platforming them, but it’s also saying, you know, if somebody is determined…there was a, I think it was Winston Churchill says a fanatic is someone who can’t change his mind and won’t change the subject, but if you’ve made the judgment that there really isn’t any winning this person over, that at some point you just need to politely agree to disagree and disengage from it. And then where of course there’s, if it’s a patient concern, there’s always the patient privacy HIPAA issue. You don’t have the full ability that the patient has to be talking about the situation because that’s their private information and they can be, they can disclose whatever they want and you’re limited on what you can do.

So that’s where you have to be very cautious in where you’re going to engage. Always trying to deescalate if you can. But at first, just making sure that you don’t add fuel to the fire.

DS: Okay. And so that really does tie in, I’ll retroactively tie it into the second point that we were talking about, where you saying just humanize it, try to make those personal connections and talk about what happened.

LA: Yeah. It’s amazing what people will say by email that they wouldn’t say face to face, and if there’s…and just offering an opportunity to say hey, could we get together and talk about this? And I think that face to face communications is an underappreciated and underutilized tool.

DSh: Alright. Thanks, Lee.

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Event Recap: Healthcare M&A from and Around the AHLA Transactions Conference

Light-colored rope on the left coming from all directions and dark-colored rope on the right coming from all directions, meeting and twisting into one in the middle

Healthcare mergers and acquisitions are having an interesting moment and were quite the topic of interest at April’s American Health Law Association’s Health Care Transactions Conference. As has been reported numerous times over the past year or two, the number of deals has dropped but the average size has gone up. Questions about how the current administration and FTC would approach consolidation have been a talking point across industries since now-President Biden won the presidency. Some massive deals go through, others get scuppered. And in the middle of these moves by traditional providers, private equity continues to evolve its role in healthcare delivery, bringing organizations together and backing them with capital and operational guidance.

With that backdrop, we circled back with a few of our AHLA friends to get their impressions of the current healthcare M&A environment. Specifically, we asked them:

  1. What were your top two takeaways from the event or conversations surrounding it?
  2. What was the biggest surprise?
  3. In light of the above, what are the top considerations for provider organizations to successfully navigate a transaction today?

Here are the topline takeaways. Quotes from the experts follow.

Themes

Uncertainty and concern around regulatory scrutiny of deals remains. And it’s not just from the FTC, but from states, as well.

The cost and shortage of labor, particularly travel nursing, is having downstream effects on the cost of doing business and patient outcomes.

Surprises

In the PE world, valuations are rising but not always for reasons one might expect. In many cases, multiples are pushing valuations as much as margins are.

It’s not just small, independent organizations that are being buffeted by a tough financial outlook. It’s a rocky landscape even for large systems, and that will likely be seen soon in M&A volume.

Across the board, seasoned industry veterans are expressing a notable level of concern thanks the rising cost of doing business and the added scrutiny on transactions.

Advice

Running a clean, organized transaction process is more important than ever.

Get counsel involved early to stay ahead of regulatory roadblocks.

Make the case for a deal – clearly and early.

Rex Burgdorfer

PARTNER

Health systems we talked with have been upended by the trend of traveling employees, especially nurses. In many cases, the cost structure of the organization has risen by 20 percent. The impact can not only be felt in the financial statements, but also in quality and safety measures. Temporary staff are often working in unfamiliar departments, with new equipment, and without the muscle memory on a team. The New York Times covered this well a few ago:‘Nurses Have Finally Learned What They’re Worth’

What were your top takeaways?

Health systems we talked with have been upended by the trend of traveling employees, especially nurses. In many cases, the cost structure of the organization has risen by 20 percent. The impact can not only be felt in the financial statements, but also in quality and safety measures. Temporary staff are often working in unfamiliar departments, with new equipment, and without the muscle memory on a team. The New York Times covered this well a few ago: ‘Nurses Have Finally Learned What They’re Worth

What was the biggest surprise?

The degree to which historically high-performing systems have been shaken in 2022 was a surprise. While we don’t yet see the impact on M&A volume statistics, I think we will in the coming quarters.

What are top considerations to successfully navigate a transaction

Transparency is key. Designing and implementing a competitive process to provide fiduciary decision-makers with a basis of comparison has always been central to demonstrating to regulators (e.g., state attorneys general) that the terms and conditions achieved in a particular transaction are “fair.” Where a lot of systems go wrong is not using the LOI stage to proactively communicate the rigor of the market clearance, the rationale behind the combination and merits of the partnership to AGs.

Krista Cooper

SENIOR HEALTHCARE ATTORNEY

What were your top takeaways?

My biggest takeaways were related to the conference’s antitrust track. Essentially, between the FTC’s new “holistic approach” to merger review and the increased scrutiny on affiliations, we can expect more vigorous reviews on the federal level. When you layer that with new state laws requiring pre-transaction notifications, the shifts could have material impacts on the approach and timing of some transactions.

What was the biggest surprise?

Given the pace of PE transactions in 2021, I was surprised to learn that unspent capital is still near record highs.

What are top considerations to successfully navigate a transaction

Prepare and prepare some more! Provider organizations considering a transaction would be well served to understand their organization’s operations, the market conditions, and the basics of the regulatory landscape. Deals are still moving very quickly whenever possible, and being well organized with good professional support can make a big difference.

Jay Greathouse

PARTNER

What were your top takeaways?

Whether it is on the equity and funding side, or on the compliance side, healthcare transactions are under a tremendous spotlight from every level. Couple this scrutiny with a greater demand by sellers for creative upside capture (e.g., earnouts, aggressive liability limitations, representation and warranty insurance growth, etc.), and there is significant pressure on what the market will support in transactions.

What was the biggest surprise?

Healthcare transactions are always under scrutiny, so many practitioners see it as simply part of the practice. But hearing so many seasoned practitioners raise the flag on the new long-look landscape was eye-opening.

What are top considerations to successfully navigate a transaction

Transaction fundamentals matter more than ever. That means good governance behind an organized, clean transaction process being run by reputable counsel. Add in the antitrust scrutiny and greater examination of transitions, and I think we will see an uptick in deals that stall, fail or unwind – and that’s when the quality of the transaction will be examined in the public and courtroom.

Jay Harris

PARTNER

What were your top takeaways?

The keynote speaker discussed the returns on investment for private equity investments in healthcare. One of the statistics mentioned was that almost half of the returns enjoyed by PE investors in healthcare in the last decade have come from the increased multiples. Meaning, the improvement in multiples provided as much of the return on investment as revenue increases and margin improvement combined. Can we expect multiples to continue to increase over time from current levels?

Michael Ramey

PRINCIPAL

What were your top takeaways?

I heard an overall uncertainty, and some anxiety, regarding the level of anti-trust enforcement going forward. The administration has definitely communicated an increased focus on healthcare transactions, but the level of enforcement beyond acute care seems to be uncertain.

Also, an interesting fact conveyed by the keynote speaker is that valuation creation in private equity-backed entities, historically, has been through revenue and multiple expansion, not margin expansion. That leads to the question if such growth is sustainable.

What was the biggest surprise?

The biggest surprise to me is the prior noted comment regarding the lack of margin expansion in private equity-backed deals. This runs counter to the MSO model of creating efficiencies through scale to generate incremental value.

What are top considerations to successfully navigate a transaction

I think the tried and true approach of involving competent healthcare legal counsel early in the process to navigate regulatory and transactional landmines remains key, along with involving healthcare-specific financial and compliance advisors. Several stories were shared at the conference of bad outcomes when this isn’t followed.

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A First Quarter to Remember…Or Forget

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Note: This piece was originally published over the weekend in our Sunday newsletter. Want content like this delivered to your inbox before it hits our blog? Subscribe here.

The Big Story: UnitedHealth Posts Higher Quarterly Revenue, Raises Earnings Guidance

“The healthcare and health-insurance giant, the first industry heavyweight to report first-quarter results, posted double-digit revenue growth at both its Optum and UnitedHealth care units.”

Must be nice.

The State of Play

While insurance companies appear to be doing well, our hospitals are staring at some bleak Q1 numbers. Why? Well, consider that:

  • COVID-19 relief funds are drying up.
  • Patient volumes for many services are below pre-pandemic levels and may or may not recover in Q2.
  • Demand for staff exceeds supply. When there’s not enough staff, some patients needing care can’t get it (feeding the problem above).
  • The cost of the staff hospitals do have is through the roof and unsustainable.
  • Inflation is clocking in at 8.5 percent. That’s producing multiple ripples. Cost-conscious patients may be reluctant to spend to get the care they need – especially for preventative care. And staff pay raises are unlikely to keep up with the cost of living, making retention all the more difficult.

What to do? A traditional response by health systems to these pressures would be to cut costs through layoffs or service closures.

  • But many systems already cut services and staff deeply during the pandemic. Few today will let go of staff in such a competitive marketplace.
  • The high cost of care is a barrier to all but the most urgent patient volumes. This only becomes more acute during periods or massive inflation, when, pound for pound, everything costs more – whether ground beef or gasoline or medical equipment.

One possible source of at least partial relief is renegotiated payer contracts. We’re hearing from more provider organizations in our network that they’re considering – or undertaking – new negotiations. Payers will likely respond aggressively, and with increasing tension between the two, patients are at risk of getting caught in the middle. And that’s never good.

However, some payers are willing to come to the table in recognition that we’re all in this together and the distinction between payer and provider is merging. Where those constructive conversations can take place, it serves as an example of the wider opportunity for partnerships of all stripes – which also include joint ventures with private equity back partners, shared-service alliances with other systems or outright sales for scale and financial stability.

For health system communicators, get ready for change. Again. Here’s how to brace for it:

  • Be at the table. Find the time and the path to being part of the strategic conversations happening in your health system today, across executive leadership, operations, finance, legal and government relations.
  • Know your story. In times of stress or change, leadership teams can have multiple stories they want to tell. The perspective of communications chiefs is invaluable to helping leadership stay focused on the core messages while maintaining the agility to respond to the changing environment.
  • Be responsibly transparent. Times are still hard. Change will continue. Know that you will need to tell this difficult story and explain some hard truths to the community you serve. But it’s better that you tell the story first than letting someone else twist it for their own purposes.
  • Have coffee with a reporter. Build relationships with local media as much as you can. Reporters these days often have wide mandates and cover a lot of topics. That means the nuance inherent to big issues facing the local hospital or health system isn’t always reflected in coverage. Be a year-round resource for local business reporters who may have a byline on the story about your next payer battle.
  • Be ready for the fight. The stakes have increased, and payers are pushing hard. Provider organizations want to focus on delivering care, not arguing about money. But that, unfortunately, is necessary.
  • Keep the conversation going. Whereas payers are constantly negotiating contracts – it’s their business model – any given hospital is only doing that every few years. Ensure your team is keeping an eye on trends, communicating to stakeholders about what you’re doing as an organization and updating your playbook for the next negotiation.
  • Don’t accept a turnkey approach. Payers are working from a thick, and broadly consistent playbook. Still, every story, every negotiation, every community served looks a bit different. As payers are becoming increasingly aggressive, you need to ensure that your plan reflects your unique needs.
  • Be grounded. Bring everything back to your mission, your calling and your duty to serve.

This piece was originally published over the weekend in our Sunday Quick Think newsletter. Fill out the form to get that in your inbox every week.