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In High Stakes, Issue Navigation, M&A, Quick Think, Strategic Positioning

Don’t Duck. Fight.

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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 or at the link below.

The Big Story: The Healthcare Divide

The healthcare industry was tossed out of the pandemic frying pan and into the media fire this week when NPR and “FRONTLINE” aired The Healthcare Divide, their joint investigation into the growing inequities in American healthcare exposed by COVID-19. More scrutiny came Wednesday when the Senate Judiciary Committee held a hearing on provider consolidation and antitrust issues. Then on Friday the New York Times ran a story about COVID-19 bills.

Our Take

(3-minute read; 10-minute podcast)

Healthcare providers, it’s time to think less like institutions and more like your detractors.

The halo your organization earned through the pandemic is dimming as the negative spotlight shifts back onto institutions providing care. Everyone’s in on the game. Unions are trying to drive a wedge between provider organizations and healthcare workers. The media is collecting hospital bills from readers. Lawmakers are considering how to wield their antitrust powers. Payers are claiming providers are responsible for the high cost of care. And when consumers truly get on board, winter won’t be coming, it’ll be here.

So why aren’t healthcare organizations consistently better at addressing these arguments? Why do responses often sound weak and platitude-rich – like bland, gray word salad? Like they’re ducking the debate?

Fact is, many still aren’t harnessing the power of communications to tell stories in a human way and are thereby yielding their positions as the owners of patient advocacy. Writ large, the provider side of the industry has traditionally operated from a stance of defense and risk management.

But the pandemic showed us a different way; to tell true-grit stories of how they were making the impossible work.

Let’s hold onto that “what works” and make it permanent.

Because all eyes are on provider behavior. Trotting out outdated studies or spreadsheets won’t cut it. That approach doesn’t hold a candle to the other groups bringing in patients harmed by alleged anti-competitive behavior, telling stories of healthcare workers living on food stamps and being sued by their own employer and painting private equity rollups as dirty, get-rich-quick schemes.

Each of those scenarios has taken place at a national level, but similar conversations are happening in local markets. Want to be prepared for when the spotlight turns to your organization? Consider the following.

  • Define the terms. It’s your story, so own it from the start. Use people. Back it with data. Be straightforward. Words like “integration” may help obscure some of the baggage carried by “merger” or “consolidation.” But people need to understand what you’re talking about. Hospital administrators must be masters at simplifying the complexity of business. Lack of clarity leads to frustration and confusion in the long run.
  • Learn the language. What motivates your hospital isn’t always what motivates the PE firm, payer or union who’s sitting across the table from you as you hammer out a partnership. Don’t talk past them. Understand what they’re trying to accomplish, how they think about the industry and the tools/tactics they like to use. Then address the actual issues they’re bringing to the conversation and articulate how you balance operating a company with providing for a critical need.
  • Be specific. Make it a practice to avoid vagaries. You’re better served calling out datasets and concerns specifically. That way, when it comes time for a rebuttal, you’re addressing a real idea rather than muddying the waters and leaving yourself open to interpretation.
  • Don’t keep using the same narratives. People today are responding to things right in front of them – an unexpected hospital bill, changes in the local labor market, mothballing of services at the community hospital. You need to do the same. Stop running with that same old consolidation study. Align yourself with your doctors, nurses and staff and show specifically what you’re doing businesswise to provide support. If you’re called out for negative effects, respond with responsible transparency and humility, not defensiveness.
  • Call out the bad actors. Yes, there are some in every industry niche who don’t have good motives. Don’t sweep that under the rug, because it’ll just mean you get lumped in with them. Some critics, like the Judiciary Committee, are questioning if the PE model is compatible with providing care. If you’re working to show that it is, you need to share the good stories, but be willing to acknowledge when your peers don’t live up to expectations.

Want more? Check out the 10-minute conversation featuring Jarrard Inc.’s David Jarrard and Isaac Squyres:

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In High Stakes, Issue Navigation, Quick Think, Strategic Positioning

Late Night Jabs

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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 or at the link below.

The Standout News: Brought to You By People Who Are Smarter Than We Are

Jimmy Kimmel, who’s used his talk show to speak on healthcare and politics numerous times, jumped in again last week with a pro-vaccine montage. It featured a handful of physicians who flashed their credentials (and student debt) and insulted people who haven’t gotten the shot. It was self-righteous, hilarious and very cathartic. But not helpful.

Our Take

(2.5-minute read)

We’re offering the white coats a little free communications advice: Skip Plan A – “A” for Aggression – when trying to change behavior. When we talk about using doctors and nurses to advocate and inform because they’re your most trusted voices…this isn’t what we’re recommending. Put simply: Don’t go all Kimmel on your patients. Leave the biting comedy to the pros.

Look, we get it. The absolutely legitimate frustration your caregivers feel having experienced firsthand the trauma COVID-19 can cause and continuing to hear people railing against the vaccines or still denying the virus is an issue.

Even so, wanna make someone dig in their heels? Insult them. Make fun of them. Piss them off.

Of course, Kimmel’s doing a bit, not offering an actual public health PSA (as far as we know). We haven’t seen any of you take his approach. But don’t let it rub off. Don’t let the frustration you feel about stagnant vaccination numbers cloud your pro-vaccine communications going forward. As much as you’d like to verbally throttle people who aren’t inclined to contribute to herd immunity, just…don’t.

Experts say the next 100 million doses will be harder to give than everything we’ve done up to this point. A recent STAT News article titled Vaccinations are plateauing. Don’t blame it on ‘resistance’ put it this way: “As daily vaccination rates settle and the country’s progress toward herd immunity slows down, let’s not rush to the same misguided conclusion that this is mostly about lack of vaccine confidence.” Labeling those who buy into falsehoods “as hesitant or resisters only hardens their viewpoints.”

So how do we make this easier? Well, the CDC’s lifting of the mask mandate is certainly a significant carrot (vs. stick) that ought to go a long way. Otherwise, here’s some advice from your favorite spin doctors – that’d be us – about how to get people to roll up their sleeves.

Listen to understand. You knew we’d include “listen” here. There’s a lot of research out there about what’s keeping people from getting vaccinated. Digest it. Consider what it means for the specific communities you serve. Go to those communities and ask about their experience with the vaccine – why they got it or why they didn’t. Check with influential leaders like clergy and teachers to get a sense of what their communities are thinking and feeling.

Recognize that data only goes so far. Numbers are good to back the position you’re advocating. Combine those with real-life anecdotes for a one-two punch that brings home understanding. Stories resonate far more than bar charts, which is something people who intentionally mislead know well. So as healthcare providers, tell stories about what the vaccine allows people to do, the peace of mind it brings – and back them up with good data. People aren’t asking, “What are the numbers?” They’re asking, “How will this affect me?” Paint the picture.

Set expectations with your clinicians. Doctors and nurses have a lot on them already, so arm them to inform, educate and advocate. Give them the tools they need to do so – whether it’s talking points, collateral, access to your organization’s channels or coaching on how to engage with people who have a contrarian view. Remind them that what they say about this issue reflects on the organization, even when speaking on their own time and channels. This isn’t to say you should take action against a physician who speaks out in a way you don’t approve of; instead, be proactive in reminding people about their role, their mission and the trust people have in them.

Remember that carrot. The CDC lifting mask mandates for those who have been vaccinated is an incentive for those who haven’t. The promise of returning to normalcy should be more effective than threats and insults for those who are still on the fence. Reinforce messages focused on the benefits of vaccination.

Stick with it. We know this is yet another frustration in a year full of them. Hang in there. We may not be able to convince all, but with persistence and calm patience we can convince many. A positive approach – and even a little good-natured humor – will go a long way toward getting more jabs in arms.

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In High Stakes, Quick Think, Strategic Positioning

It’s Your Reputation

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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 or at the link below.

The Basics

Two major providers are making a move to help them and their patients by upping investment in online reputation management. They’re looking for more (and more positive) reviews, plus an easier pathway to respond to negative ones. Provider ratings on sites like Google and Yelp are a significant factor when people look for care.

Our Take

A two-minute read for the high points; a 10-minute video/podcast for more

Doctors, we’re talking about your reputation.

And so are a lot of others. While you used to think of marketing and reputation management as “dirty words,” many of you are catching on to the necessity for doing both.

Online reviews are definitely a big deal for patients seeking a provider. Resistance to addressing them is foolish, especially when you start seeing a wave of negative reviews or inaccurate information – like the ambulance that ended up in an empty field because the online listing for a new facility was wrong.

So, how do physicians – ahem, healthcare marketing departments – take care of their online hygiene and manage their reputations? Well, it takes energy and effort – there’s no silver bullet. Which means that before you go sign up with a software provider, you have to do a little of your own recon:

  1. Find your information. Where does your organization show up online? Google? Yelp? Facebook? Where are people finding your brick-and-mortar addresses?
  2. Review your information. Are your hours and basic contact info correct on all those listing sites?
  3. Collect your information. Create a spreadsheet that will serve as a single source of truth. Seem overwhelming? Start with one segment of your organization, say the clinics or just your physicians. This spreadsheet will be critical to tracking your presence online once you do sign up with a reputation management vendor.
  4. Correct your information. You don’t need us to explain this.
  5. Respond to reviews. Get back to people and express your appreciation for their feedback. Don’t avoid negative comments. Don’t do anything foolish, like ask for personal health information in a public forum. Questions? Check with your legal and compliance team – or call us, for that matter (but not for legal advice).
  6. Solicit reviews. Some platforms, like Yelp, don’t allow you to ask for reviews. So check first. Where you can, make reviews part of the post-visit follow up. Make it easy for people. One more time: Make it easy.

So, should you follow in Sharp’s footsteps and embrace reviews, actively soliciting them to help people find you and to look better when the do? If you’ve got your aforementioned ducks in a row, we say bring ‘em on.

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In High Stakes, Strategic Positioning

Digital Digest: The Q1 Lowdown on Digital Healthcare Marketing

Up close view of a doctor's chest holding his cellphone

Over the last year, healthcare marketers have run from thing to thing to keep up with the constant changes at their organizations.

There’s been no time to pause for breath and look out past today. But it needs to happen now, especially as the attention returns to the patient experience.

Here’s what I’m tracking as our industry shifts towards consumerism.

Telehealth

Patient acquisition is key. It’s not only important to get patients to come back to bricks-and-mortar facilities, but also time to look at your new telehealth offerings to ensure the patient experience around those is rock solid. While telehealth visits are expected to drop off somewhat, they should stay well above 2019 levels. Providers need to be looking at the patient population who wants to use telehealth and ensure they have access. For example, to get around the issue of lack of broadband access where patients live, providers may consider partnering with community organizations to provide physical facilities where people can have a remote visit.

Marketing the Experience

The other part of telehealth today is ensuring that providers give their staffs and physicians the tools they need to deliver the best possible experience through remote visits. What does bedside manner look like via iPad? Are front desk teams ready to answer questions about remote visits and to direct people to scheduling tools? Are those tools easy to use?

Similarly, marketing teams need to be sure they’re not marketing a bad experience. Providers have been so focused on getting people back for needed care that it’s easy to bypass the “patient journey” and just push people to get something on the books. It’s certainly not a great idea to encourage people to sign up for an appointment when there are no appointments available for six months. Or to push people towards a telehealth system that isn’t user-friendly. Or to providers who aren’t as comfortable with virtual visits. Marketing teams need to dig through those pieces, then inform the operational decisions and create marketing plans that reflect the realities of the telehealth program.

Easy Information

People want information and they want it now. An “I should be able to do everything online” attitude is fueling angst among consumers when it comes to healthcare. Because people want a frictionless experience across their digital lives, they’re steering toward companies and products that deliver consistent, easy-to-use tools. Healthcare providers should be thinking about what that looks like via their website, social channels and visibility on search engines.

We’re seeing a shift towards the use – and success – of chatbots to deliver information. They let people ask a quick question and get a quick answer for basic things like parking, scheduling and billing. The same goes for Twitter help lines: People would rather tweet and get the issue fixed, quickly.

In another area, Google works very hard to keep people on the search results page. Google something about DIY kitchen plumbing and you’ll see knowledge cards with a list of steps, YouTube videos that play right on the page and links to flanges and disposals from local stores. Those results didn’t appear by chance – they’re the result of intentional work by the content creators or marketing teams to optimize their websites. Hospitals should do the same thing…maybe not creating videos for a DIY appendectomy but looking at frequently-asked questions and developing Google-optimized content to answer them.

Internal Comms

The last trend I’m tracking today is the re-envisioning of “internal communications.” When work became virtual for many one year ago, “internal” communications came to mean something different. Healthcare providers have developed more flexible ways to interact with employees no longer physically co-located, especially for things like daily updates or vaccine information. That’s a great start. Now there’s a need to reach employees with important but less-urgent information. Marketing and communications teams need to think about the way their intranets are structured, how regular CEO updates are developed and delivered and what the quarterly townhall meeting looks like.

Providers are interested in connecting with employees through their mobile devices and communicating through text messaging. With many not coming back to the office soon, if ever, providers need to change the way they think about creating two-way communications with employees.

Healthcare is a highly trusted industry. A recent Jarrard Inc. survey showed that doctors, nurses and hospitals all enjoy well over 80 percent trust among the public. Consumers trust doctors more than their insurance company for accurate information on the price of healthcare services, and they’re more likely to call their doctor’s office than their insurance company for that information. Patients want to hear from you.

Beyond that, we know that information related to cost of services is important to consumers. According to our survey, two-thirds reported that the cost of healthcare services impacts where they choose to receive care. Meanwhile, almost four in ten consumers have used a price estimator in the last 12 months.

Here’s the bottom line: Now is a great time to leverage the trust patients and consumers have in providers. It’s an opportunity to connect with patients beyond a single visit or course of treatment. They’re looking for safety, security and transparency. Be the organization that provides it. You have everything to gain.

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In High Stakes, Strategic Positioning

Price Transparency: Two Months Down and Seven Ways to Get Smart

Stack of one-hundred dollar bills

So, how’s it going 60-plus days into price transparency? Fine for some, not well for others.

As January 1st came and went, we didn’t see a lot of public attention on how providers were responding to the new CMS rule. That’s understandable, given everything else going on in our country at the time: COVID-19 cases peaking, vaccines rolling out, the inauguration, among others. Now, however, price transparency is starting to have its moment.

Let’s begin with some background. The CMS Price Transparency Rule has two requirements: Hospitals must share their charge data in a single, machine-readable file, and they must display at least 300 shoppable services online. If they don’t, they’re subject to a $300 penalty for each day they don’t meet the requirement.

Though we’ve not seen much CMS enforcement yet, we are beginning to see investigative reports from the media on who’s compliant, who’s not and price comparisons of who’s charging what.

A study from Health Affairs (and covered by Modern Healthcare) found that 65 of the 100 hospitals reviewed “were unambiguously noncompliant.” And that noncompliance took several forms, including 12 hospitals that failed to post any data at all. To be clear, this wasn’t a complex academic study where statistics could be used to uncover obscure results. Instead, it was very much in the spirit of the rule – making price information accessible to consumers – where the authors simply performed “a google.com search for “[hospital name] standard charges.”

Another article from Modern Healthcare noted that most Tennessee hospitals are struggling to comply, with only about 20 percent meeting the new rule. Making things worse, where data was available, the report unveiled significant variation in the price of services across Tennessee providers. A knee replacement, for instance, ranged from $10,536 to a $104,120. Similarly, across the state, negotiated rates and cash prices varied up to ten-fold depending on the facility and payer.

Brace yourself for more such stories to follow. As the vaccination story plays out, media attention is shifting to transparency and, even more broadly, healthcare consumerism and interoperability.

To comply, or not to comply … that was the question.

If you complied, that was a good start – but only a start. Going forward, you have to be prepared to answer questions related to your prices and cost of services, especially if yours are near the top of the list or highest in your market.

Some hospitals and providers intentionally decided to take the penalty. If that’s you, how long are you willing to pay that? And how much reputational damage are you risking if people can’t find information they want? And how will you explain why you chose that path?

Either way, we’re not looking at this just in terms of compliance for the sake of compliance. What about making it consumer friendly – and gaining a competitive advantage in doing so? The letter of the law is merely publishing your chargemaster. Going beyond means developing an online price estimator tool or other useful tools that improve the patient experience (think “access” and “engagement”).

Transparency and interoperability are not flavors of the month. We live in an increasingly consumer- centric world, and healthcare is finally having to catch up. The push is strengthening to give patients more transparency to the cost of services and access to their own health information.

Our advice?

Don’t delay the inevitable.

If you’re compliant, start working with your clinical, marcom, operations and patient experience teams to plan how you’ll use the box-checking of the rule to launch you into a more patient-centric model over time. Review your technology, financial tools and more. And while you’re doing it, ask around – see what your patients want and need to make their experience even better.

If you’ve chosen the route of noncompliance, here are seven things you can do right now to prepare for what’s to come:

Healthcare is a highly trusted industry. A recent Jarrard Inc. survey showed that doctors, nurses and hospitals all enjoy well over 80 percent trust among the public. Consumers trust doctors more than their insurance company for accurate information on the price of healthcare services, and they’re more likely to call their doctor’s office than their insurance company for that information. Patients want to hear from you.

Beyond that, we know that information related to cost of services is important to consumers. According to our survey, two-thirds reported that the cost of healthcare services impacts where they choose to receive care. Meanwhile, almost four in ten consumers have used a price estimator in the last 12 months.

Here’s the bottom line: Now is a great time to leverage the trust patients and consumers have in providers. It’s an opportunity to connect with patients beyond a single visit or course of treatment. They’re looking for safety, security and transparency. Be the organization that provides it. You have everything to gain.

Questions About Price Transparency? We Can Help

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In High Stakes, J|Insights, Strategic Positioning

Healthcare Consolidation in the Spotlight

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Today we’re catching up on healthcare mergers, acquisitions and partnerships with CEO David Jarrard and Isaac Squyres, a partner in our regional practice and leader of our M&A team. What does consolidation look like post-COVID-19 and under the Biden administration? David and Isaac are watching this issue closely, as is our network of brokers, transaction attorneys and strategy experts across the country. We recently surveyed that network to get a sense of the trends to expect in 2021, and the short version is that even as there will be a lot of legal and regulatory wrangling, it’s more important than ever to have a clear purpose and a clear story to tell about the value of care that hospitals provide and why a transaction is the right thing to do. Scale for the sake of scale won’t cut it.

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In High Stakes, M&A, Strategic Positioning

Healthcare M&A Predictions, Take Two: Under Biden & Post-COVID-19

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Last July just as the world was about to reopen and fallout from months of lost revenue was about to descend, we polled our extensive network to see what the future held for hospital mergers and acquisitions.

Who would be buying? Who would be selling? How would a previously active M&A landscape change in light of the pandemic? And might the looming election shift power from one side of the aisle to the other, leading to significant regulatory or legislative changes?

You can see what our experts said then.

So, what do they say now?

Glad you asked. Because we did too.

We checked back with several of our prognosticators, along with a few other players in the legal, financial, strategic planning and management consulting sectors, asking them four questions:

As before, we’ve condensed the answers into a few themes, but the full verbatim can be found below the summary.

Asked if the rate of transactions will begin to climb, a slight plurality predicted the pace and volume of transactions will remain at current levels throughout 2021. The rest said they expect to see the pace of transactions ramp up in Q2 or Q3.

Why did our experts pick the timeline they did?

The consensus was that operational hurdles created by the pandemic have subsided or will soon subside, and that atypical events like the distribution of Cares Act relief funds didn’t change “underlying economic pressures.” Moreover, they noted that the endgame to the pandemic seems to be taking shape, as does a path to economic recovery.

As a return to some “normalcy” occurs, it will become apparent who has emerged stronger, who is weaker and which organizations that were struggling and looking for a partner before the pandemic brought life screeching to a halt – might resume a courtship.

These factors and trends were common across the responses we received, with the differences generally being whether people thought they had resolved enough to have already pushed the pace of transactions to a plateau (“the pace we see today is the pace we’ll see this year) or if they’re still getting worked out (Q2/3).

When we asked about top considerations for buyers and sellers, our experts mentioned:

Buyers balancing resources: recovery vs acquisition
Sellers being flexible and setting realistic expectations
Need for care in the deal process to get through regulatory scrutiny
Buyers helping sellers address the state of their workforce
Need for alignment on strategy and purpose behind a deal (not just scale)

When it came to whether or not deals will be harder to do today, the consensus was “yes.” We heard a few common reasons why:

Federal Scrutiny

(Likely) HHS Secretary Xavier Becerra’s name and reputation came up repeatedly.

State/Local Scrutiny

Non-local control and the effect of consolidation on health equity and community good may be a concern.

Value Proposition

New economic realities and getting to underlying valuations may make deals harder.

Purpose

“Scale for the sake of scale” won’t work. Deals need to be strategic and close existing gaps in services/operations.

Transformation

There is a need to pursue deals that will advance technology and value-based care.

COVID-19’s Wake

Sorting out the underlying fundamentals from the noise of relief funds adds layers of complexity.

Whatever predictions do come true, the tone of the comments reveals something quietly significant and hopeful: There will be a renewed focus on non-COVID-19-related work. Providers are turning their attention to what comes next, signaling the pandemic’s last miles and the opening push for the new administration.

Take a look at the full comments below.

ArchGate Partners

Joe Cerreta

Partner

Barry Sagraves

Partner

Are deals going to be harder to do?

Transactions will be harder to complete, though for reasons beyond changing attitudes of federal regulators. While the new administration is likely to neutral to negative toward consolidation, the FTC will continue its historic opposition rather than ratchet it up. Most of the increased difficulty is completing transactions will be the result of a fundamental change in the economics of the hospital industry, with COVID-19 accelerating trends toward value based care and a risk based reimbursement model as well as increasing consumer preferences for outpatient settings and digital interaction. Systems looking to add members will face more uncertainty and risk in transactions. There will be more organizations seeking to join a system than systems seeking new members. Finally, state and local government may be more hostile to consolidation as concerns about health equity and the good of the community add to worries about non-local control.

What are key considerations for buyers and sellers?

Buyers

Buyers will have to effectively balance resources between trying to complete transactions while recovering from the pandemic and meeting the many changes in the industry. Promising appropriate consideration to successfully be selected as the partner of choice and then delivering the promised benefits will be key for overall system success.

Sellers

Those seeking to join a system will need to have realistic expectations. While many partner-seekers will be distressed, those with stronger financial and competitive positions may find fewer and/or less-aggressive suitors. It will be more important than ever that those considering joining a system utilize a flexible, appropriate approach to the market and not unintentionally chase away a high-quality partner with overly cumbersome RFPs, lengthy negotiations or excessive demands.

When will deals pick up?

Q3

Partnership activity (though not necessarily announced transactions) will pick up in the third quarter.  Visibility on vaccines and the course of the pandemic should be more clear, as well as the state of the economy. Buyers should be feeling more certainty and will need to address the underlying needs for growth and scale after a pandemic-induced hiatus.

Ascendient

Dawn Carter

Founder & Senior Partner

Are deals going to be harder to do?

I definitely believe that there will be heightened scrutiny from the Biden administration and the FTC. In addition, buyers will continue to be more discerning in deals they pursue, for their own strategic reasons, as well as to avoid lengthy, expensive efforts that are eventually blocked by the FTC.

What are key considerations for buyers and sellers?

Buyers

Clearly articulating the strategic purpose of the deal and understanding the value the target brings to the organization.

Sellers

Making sure the organization is as financially strong as possible before embarking on a process, as most buyers have very little interest in financially vulnerable organizations.

When will deals pick up?

The pace today is the pace we’ll see.

Things slowed a bit in 2020, particularly as health systems were trying to get their operational “sea legs” for COVID-19.  Despite the ongoing pandemic, those operational hurdles have been dealt with for the most part and there is a lot more normalcy around M&A transactions. The challenges to the pace will continue to be a) a lot of “low-hanging fruit” deals have been done, so those remaining are more difficult for a reason and/or are much larger deals, which then gets to #1 above; b) overall conservative, low-risk position of most buyers.

Bass, Berry & Sims PLC

Angela Humphreys

Chair, Healthcare Practice Group and Co-Chair, Healthcare Private Equity Team

Are deals going to be harder to do?

There certainly will be more considerations at play, including calibrating for a return to pre-COVID volumes, addressing government funding such as Provider Relief Funds, Medicare Advance Payments and PPP loans, and the potential for increased antitrust scrutiny under the Biden administration.  That said, with a bit of pent up demand, 2021 is poised for high deal flow, particularly for companies that have a view towards value based care and the implementation of technology solutions.

What are key considerations for buyers and sellers?

Buyers

Comfort around the long-term sustainability of the business post-COVID.

Sellers

Certainty of valuation.

When will deals pick up?

Q3

Smaller hospitals have been struggling in the wake of COVID-19 due, in part, to a downturn in elective procedures and thin financial reserves.  As a result, they will need to pursue strategic alliances and partnerships to survive. Separately, query whether this will be a year of the mega merger that brings together large competitors to capitalize on synergies from streamlined management and payor and vendor contracting strategies.

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Robert York

Director, Value-Based Care Practice Leader

R. Christopher Regan

Founding Partner, Managing Director

Are deals going to be harder to do?

Increasing regulatory scrutiny and industry impact due to COVID has refocused healthcare executives to increase overall partnership evaluation and diligence efforts. We don’t see deals happening just to make a deal. It is critical to ensure that future partnerships are sustainable and will deliver on the organization’s long-term strategic goals and objectives as well as satisfy any regulatory concerns.  The partnership process from evaluation to close consumes tremendous organizational bandwidth and so it is critical to make sure there is a clear and sustainable business case for a particular partnership upfront before investing significant time and effort.

What are key considerations for buyers and sellers?

Buyers

Healthcare leadership is re-evaluating overall organizational portfolios given the lessons learned from this past year and identifying capabilities and relationships they need to build out operationally, clinically and financially to stabilize and strengthen the organizational position into 2021.  No matter where you sit in the healthcare eco-system it is time to re-evaluate your organization’ position and needs based on the changed external and internal situation and go-forward outlook.

Sellers

Hospitals and health system partnerships have been focused on building up scale and reach for the sake of scale and reach. But, building scale for scale’s sake is no longer a sufficient case for partnership by itself and healthcare leadership is placing a greater focus on partnerships that can diverse revenue/risk profile and materially advance capabilities and close gaps in the current portfolio including physician, ambulatory and other non-hospital based businesses, virtual/ technology enabled care delivery and management and payor and health plan products.

When will deals pick up?

The pace today is the pace we’ll see.

Hospital deals started to pick back up in Q4 2020 and we see that continuing.  Broader healthcare M&A activity outside of hospitals including both virtual/ digital health plays and physician and ambulatory really remained strong and is continuing to do so.  We expect this resurgence of partnership activity to continue through 2021 as healthcare leadership attention shifts from crisis management to mid- to long-term strategy and sustainability; however, the range of options will look different from years past and continue to extend well beyond traditional hospital to hospital deals.

Juniper Advisory

Rex Burgdorfer

Managing Director

Are deals going to be harder to do?

Health care combinations won’t necessarily be harder to do, but partnership processes will likely need to be more robust to meet heightened regulatory scrutiny. The leadership of Vice President Harris and HHS Secretary nominee Becerra may influence policy at the FTC and DOJ. It is also worth noting that State Attorneys General are also playing a more active role in reviewing hospital transactions. 

COVID has, and will continue to, drive transformation in health care. The experience of a global pandemic has accelerated the rate of change in the industry dramatically. As a result, hospitals and health systems are increasingly looking for new ways to work together to serve their communities and ensure their ongoing vitality. There are a few trends we expect to see more of in 2021: 1) number of transactions between large $1+B health systems across geographic boundaries, 2) partnerships between providers and payors and 3) unique structures that bring two health systems very close together operationally but stop short of change of control. 

What are key considerations for buyers and sellers?

There has been a growing focus on regulatory review in M&A transactions.  As the market for corporate control in the hospital industry matures, data like the American Bar Association “Deal Point Study” are settling in on what constitutes ‘market’ value, terms, and conditions.  The wildcard, however, which always seems to arise in the final negotiations of a definitive agreement, is the risk exchange surrounding various government programs and oversight.

For both buyers and sellers, speed and moving partnership processes forward continues to be a main objective. The benefits of partnership and scale have never been more important than during the pandemic response. The sooner hospitals can affiliate, the sooner their institution and their community will see the positive impact.  However, for buyers of distressed hospitals, we are seeing prolonged periods of due diligence as they evaluate their financial positions and risk. 

When will deals pick up?

Q3

Systems that we work have a pent-up demand for forming regional partnerships.  COVID proved to be a significant disruption to hospital operations and strategic plans. The federal Cares Act relief funding was helpful but has not changed the underlying economic pressures causing management teams to believe that better coordination across the sector is needed to improve the efficiency and quality of care.  Once vaccinations are more widespread, and long-term strategic initiatives dusted-off, I think we’ll see a return to ~100 transaction per year.

Are deals going to be harder to do?

The effect of the Biden Administration on transactions is uncertain, but the guess is that we will see a more active FTC going forward.  But I don’t believe that the regulatory environment and any changes implemented under the Biden Administration will be a material impediment to closing deals.  The challenges are going to be around valuation expectations for both buyers and sellers given the last 12 months of operations for hospitals were so impacted by COVID.   An additional uncertainty that will influence the valuation discuss will be any progress on expanding the coverage of the Medicare program.

What are key considerations for buyers and sellers?

Buyers

Buyers will need to evaluate the state of the workforce at a target facility to understand the potential and the length of time for employees to return to “business as usual.”

Sellers

Sellers will want to assess what a Buyer brings to the table that might help the same workforce fatigue issue.

When will deals pick up?

Q2

My prediction is that we will see the pace of hospital transactions increase in Q2, assuming that the recent positive trend in COVID-19 cases continues and more of the population is vaccinated.  Hospital leaders will be able to see the light at the end of the tunnel and turn back to strategic planning.  Also, there will be a number of hospitals/systems that will need to take strategic steps having been financially weakened over the last year.

Are deals going to be harder to do?

Yes, the historic trend of the mega-merger will be under a microscope by the Biden Administration. The Biden Administration has made it clear that it will intensify its review of healthcare mergers and acquisitions and the expectation is that there will be longer periods for review and greater likelihood of second requests by the FTC. In addition, State Attorneys General have become much more aggressive in their review of potential combinations, resulting in increased involvement in the terms of the agreement, particularly focusing on the covenants of purchasers post-closing, including provision of indigent care, limitations on rate increases and attention to social determinants of health. As a result of these factors, Buyers will have to take into account the increased time delays, expenses, potential divestiture of assets and increased commitments to the community in connection with such transactions. That being said, although it is anticipated that Secretary Becerra may indirectly and discreetly play a role in the policies connected with healthcare merger and acquisition review, we anticipate that Becerra’s strong support of the ACA will be a counterbalancing factor, along with continued relaxation of regulations and issuance of waivers at least for the remainder of COVID-19. In addition, buyers have the burden of scoping and quantifying the potential COVID-19 liabilities and the complications to a transaction as buyers try to understand what stimulus funds were received and the restrictions regarding use of the funds and the potential requirement to repay such funds. Finally, there is just the simple fact that healthcare mergers and acquisitions have become increasingly complex, time consuming and expensive. For all of the aforementioned reasons, it will be imperative for the parties to have a clear and strong strategic basis for the transaction, and go in in with eyes wide open to the challenges.

What are key considerations for buyers and sellers?

Buyers

From the perspective of a buyer, it is important to identify the key strategic goals of the transaction and create clear and consistent communication regarding how the transaction will satisfy those goals both within executive leadership and ultimately to the board. Increasingly, we are seeing that if the board is not tracking closely with the executive leadership team in the process, then there is more opportunity for the deal to not advance forward.

Sellers

As has historically been the case, certainty of close is imperative for sellers. As a result, I think that it is important for sellers to proactively take as many issues as possible off the table by being proactive in terms of diligence, transparency in terms of identification and resolution of issues so that the parties can minimize the closing conditions.

When will deals pick up?

Q2

There is significant capital that has been sitting on the sidelines for the better of part of 2020 that is waiting to be deployed.  Now that we have the (i) certainty of the election results, (ii) declines in COVID-19 cases, (iii) positive vaccine projections and (iv) boards and management teams more able to focus on strategic growth, hospitals and health system deal activity is picking up.  We are seeing an increase in activity in the letter of intent/definitive agreement stage already that should lead to deals closing Q2 of 2021.  In addition, we have seen a significant uptick in the hospitals and health systems focused on strategic service lines and vertical integration.  We also anticipate that the regional consolidations will continue to trend in 2021 as they have for the past few years.

Are deals going to be harder to do?

Deals have been difficult to do for a while and it does not seem that will be getting any easier, whether that is due to state Attorney General enforcement, lower HSR filing thresholds and FTC interest, or more discerning financial, operational, cultural and legal due diligence by parties. Having said that, while timelines may get drawn out and deal terms may get modified to accommodate stakeholders and regulators, deals will still close.

What are key considerations for buyers and sellers?

Buyers

Since many hospital M&A transactions are effectuated through “membership substitutions”, one consideration for buyers in such structures is what post-closing operational covenants buyers are willing to commit to the “seller” (and, in effect, the communities served by the seller’s facilities). In prior years, many buyers were willing to commit to continue to operate the facilities, service lines and programs “as is” for a number of years, as well as committing to spend significant funds on capital commitments, IT integration or other meaningful projects at the seller facilities, and those are increasingly difficult commitments for buyers to make.

Sellers

On the flip side of a buyer’s consideration regarding making significant, long-term post-closing commitments, sellers need to consider, in the absence or reduction of such commitments, what is appropriate transaction consideration to “hand over the keys” and still obtain necessary approvals from their board, stakeholders or regulators. As hospitals move away from a focus on bricks and mortar development, and invest in telehealth, value based-care arrangements and innovative care delivery models, sellers will need to consider whether preservation of existing operations is appropriate.

When will deals pick up?

The pace today is the pace we’ll see.

The pace for 2021 is already very active, and such pace is likely to continue throughout the year, as C-suites and boards of hospitals looking to engage in discussions with potential buyers are now more able to commit the necessary time and attention to strategic initiatives. Buyers are also willing to engage in such discussions and are anxious to execute on opportunities that may not have presented themselves but for COVID-19.  In addition to “traditional” M&A, parties are actively discussing alternative transaction structures, including joint operating agreements, joint ventures, clinical collaboration arrangements, adding to the already energetic pace of transactional activity thus far in 2021.

Ponder & Co

Eb LeMaster

Managing Director

Are deals going to be harder to do?

In the context of regulatory scrutiny, there are several compelling reasons for why deals may become more difficult to consummate. As a long tenured member of the California Assembly, a House Representative and California Attorney General, Xavier Becerra, has a strong track record for aggressive antitrust oversight, including his opposition of the proposed deal between Adventist Health and St. Joseph Health and adding stringent conditions to the Cedars-Sinai Medical Center merger with Huntington Memorial Hospital. Moreover, spurred by the challenges of the pandemic in an already challenging operating environment, we expect the stakes of regulatory intervention to continue to rise as providers seek in-market or adjacent-market acquisitions. Notable deals that received FTC intervention, or are under regulatory review, include Prisma’s acquisition of three LifePoint hospitals in South Carolina and Methodist Le Bonheur’s attempted acquisition of Tenet’s Memphis assets. As providers continue to evaluate their strategic options and expand out from regional hubs or divest non-core assets to in-region competitors, we expect this trend of increasing regulatory scrutiny to continue. Consequently, to help mitigate protracted deal processes due to regulatory intervention and significant legal expense, we are already seeing buyers, more intentional on the front end of due diligence, proactively engage anti-trust counsels and economic advisors, to assess the merits of a deal from a regulatory perspective.

What are key considerations for buyers and sellers?

Assessing the likely breadth and intensity of buyer interest prior to marketing is more important than ever during the pandemic. In some cases, buyers are focusing almost exclusively on pre-pandemic financial/operating trends and results while in other cases, they are factoring in the impact of the pandemic, adjusting run rate cash flow downward and adjusting target results for governmental financial support. New Hanover Regional Medical Center, for example, was able to hold the line on its $1.5 billion pre-pandemic valuation from Novant Health, certainly benefitting from the significant interest from a range of for-profit and not-for-profit partners in the event terms changed. Other sellers with less interest from the market have not been so fortunate as transactions have been repriced or commitments changed. Ultimately, this is as much an art as it is a science, and the outcome is heavily dependent on the breadth and depth of partner interest.

When will deals pick up?

The pace today is the pace we’ll see.

We expect the average quarterly volume in 2021 to be similar to the levels of 2020. On the one hand, Q4 2020 announced volume was strong with 28 announced transactions, the highest single quarterly total since Q1 of 2018. Also, there is a healthy backlog of more than a dozen systems in partnership discussions and under LOIs towards affiliation from the latter part of 2020. However, the pandemic will continue to hold down transaction volumes as healthcare systems and hospitals have been given short-term breathing room through pandemic government support payments and as volumes continue to ramp up ahead of original expectations despite the continued pandemic. Many health systems are using this time to recalibrate financial projections for the remainder of 2021 and continue to study strategic options. Also, the top driver of consolidation–significant negative governmental reimbursement change—is highly unlikely in the near-term in light of the pandemic and related pressures on health systems.

Are deals going to be harder to do?

Historically, Democratic administrations have applied more regulation to transactions. So, we believe we can expect that there will be more scrutiny particularly of larger transactions. Xavier Becerra and Kamala Harris were very engaged in looking at anti-competitive behavior when they were in the Attorney General’s office in California, so it would not surprise me if larger transactions got additional scrutiny from the FTC. For example, this article cites Becerra’s antitrust litigation against Sutter Health.

What are key considerations for buyers and sellers?

Buyers

Buyers need to consider and make sure that the grants and loans provided to facilities in 2020 are not masking systemic financial issues and considering the impact repayment of those amounts may have on the cash flow of the hospitals. Using CHS as an example, the government appears willing to spread repayments out over quite a long period of time.

Sellers

Sellers will need to move quickly. Transactions that take 9-12 months are more costly and increase the likelihood the deal won’t get done. It also weighs on your employees and could lead to attrition. Sometimes you can’t avoid it, getting AG approvals and the like, but if you can, getting a deal closed quickly will save everyone money and make for a happier workforce.

When will deals pick up?

Q2

I think second quarter due to more vaccinations, more return to normalcy, and more pent-up demand. 2020 was a surprising year for M&A activity, but I remain bullish on transactions. I think the pandemic has strengthened some systems and weakened others which is a natural setting for more M&A transactions.

Historically, Democratic administrations have applied more regulation to transactions. So, we believe we can expect that there will be more scrutiny particularly of larger transactions. Xavier Becerra and Kamala Harris were very engaged in looking at anti-competitive behavior when they were in the Attorney General’s office in California, so it would not surprise me if larger transactions got additional scrutiny from the FTC. For example, this article cites Becerra’s antitrust litigation against Sutter Health.

Buyers

Buyers need to consider and make sure that the grants and loans provided to facilities in 2020 are not masking systemic financial issues and considering the impact repayment of those amounts may have on the cash flow of the hospitals. Using CHS as an example, the government appears willing to spread repayments out over quite a long period of time.

Sellers

Sellers will need to move quickly. Transactions that take 9-12 months are more costly and increase the likelihood the deal won’t get done. It also weighs on your employees and could lead to attrition. Sometimes you can’t avoid it, getting AG approvals and the like, but if you can, getting a deal closed quickly will save everyone money and make for a happier workforce.

Q2

I think second quarter due to more vaccinations, more return to normalcy, and more pent-up demand. 2020 was a surprising year for M&A activity, but I remain bullish on transactions. I think the pandemic has strengthened some systems and weakened others which is a natural setting for more M&A transactions.

In High Stakes, Strategic Positioning

Provider Profile: Glens Falls Hospital

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A Workforce Vaccination Success Story

Eighty-seven percent.

That’s the acceptance rate for the COVID-19 vaccine at Glens Falls Hospital in Upstate New York. Moreover, the organization has already completed its administration of first doses. Remarkable milestones, certainly.

Glens Falls has some advantages – most significant being that it’s a small hospital with 400 beds and 2,500 employees. Even so, the level of vaccine acceptance among the employee base is stunning – especially in comparison to nearby hospitals that are sitting at 50 to 60 percent.

We wanted to know how they did it, so we chatted with Ray Agnew, vice president of hospital and community engagement, who explained his organization’s secret sauce. (See video for full conversation). Here are his top takes:

  1. Find a champion. Agnew and the Glens Falls team looked to Hillary Alycon, their director of infectious disease prevention and control, as a key messenger to explain the value of the vaccine. Alycon is known for connecting with people. “She’s incredibly articulate and fun to be around,” said Agnew, adding that she has a gift for explaining complex issues in understandable ways.
  2. Educate, don’t tell. The team has featured Alycon in two vaccine education videos. The first was for employees to understand why accepting the vaccination would be good for them and their patients. The second was for the community itself. Communications also puts out a weekly bulletin to help people understand what the vaccine is all about. Agnew emphasized that offering the same basic content in multiple formats and styles has been vital to helping each audience understand it and be more likely to accept it.
  3. Be transparent. It’s pretty straightforward. “We let people know that when we got information, they’d get information,” Agnew noted. Honesty about what is known and unknown helps people feel confident in the information they do receive, especially when dealing with a challenging situation like a disjointed vaccine rollout.
  4. Plan for simplicity. Made every effort for the vaccination process itself to be as easy as possible, Agnew said. “That’s been a big part of our success,” he said. When you’re talking about a fearful situation – fear of the disease and some fear of the vaccine as well – focus on simple messaging, process and directions.  Do that, and the communications will resonate.

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In High Stakes, Strategic Positioning

Price Transparency: An Experience, Not Just a Rule

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When the clock ticked over to January 1, the new CMS price transparency rule came into effect.

While its implementation may have been largely overshadowed by other issues, the rule is in place and providers should be thinking about it.

Whatever your plans were for the rule beforehand – list your prices, implement user-friendly price estimator tools, ignore the rule for now and pay the fine – it’s worth considering how your approach can affect your reputation and, potentially, bottom line going forward.

We spoke with James Cervantes, associate vice president and leader of the price transparency work here at Jarrard Inc., and Prashant Karamchandani, director in the revenue cycle practice at The Chartis Group, about key considerations for providers now that the rule is off and running. Watch the video or read the transcript below.

Read the Transcript

PK: CMS has put out there the regulation around price transparency and wanting organizations – healthcare organizations – to start to list the rates that they have with insurance companies, as well as,  they want patients to have visibility into what they’re charging and then what the reimbursement is and have an opportunity to do some comparisons.

And I think that’s the letter of the law and regulation. You have to have some level of viewing your shoppable services, but I think organizations that look at the regulation as just the only thing they need to do to be compliant are missing a key opportunity to use this regulation as a catalyst for change.

Which is aligning more to a more enhanced and better patient experience across the enterprise. And by that we mean starting to look at this to bring patients in. So if patients are coming to your website, looking at your rates, looking at your service offerings, you should be hooking them into a better workflow to continue them through that entire process.

Meaning, once they look at that information, they should then have an opportunity to identify what’s their actual estimate going to be for those services, start to think through, ‘How do I schedule for those services?’ And then if they can make payment or cannot make payments, start to engage in a conversation with the organization as to how they can address some of that.

So, yeah,there’s more you can do. And the more you can do with it is a different strategy. And it’s where folks should be spending that time right now – on that strategy – as well as complying with the letter of the law. So it’s a combination of both.

JC: So once you’ve created the program and you created your workflows and you operationalize that program, the next step is really to then communicate and share those tools and information with your patients and your community. So, how are you guiding patients to the front door of your health system or your hospital?

How are you directing them to the cost assessment or price estimator tool that you have? How are you reminding them of any financial or personal assistance programs that you have? Reminding them that if you’re providing estimates to procedures or surgeries, where to go for that information. So this is really in many ways a great time to remind patients and those that are seeking care at your organization of all the tools and information that they’ll have access to as they make their financial decisions about receiving care.

PK: I think there’s some key tangible benefits. So patient acquisition and patient retention, you’re going to instill trust within your patient population by providing this information out there and also continue having them coming back because you’ve created a whole new experience and level of transparency that they’re not used to today.

So it’s more than just listing pricing online, which is, I think, why we want to view it as a broader strategy. It’s really getting them into that better enabled and self-service workflow, which is how you want to be engaged with your patients and with all kinds of technology out there that you have, different things you can do to build that ecosystem. But I think that’s a key thing from an acquisition and retention perspective.

I think additionally, it helps from a patient financial experience for both not only the patient, but also for the organization. You can start to have more upfront conversations, easily, around expected out of pocket costs, how they might be able to pay for it, providing the mechanisms in which they can pay with all different types of technology, whether it be credit card or Google Pay, Apple Pay, the various things that are out there. That’s a key opportunity as well.

And then I think there’s a handful of patients out there – and it’s continuing to increase – where we’re seeing larger deductibles and out of pocket costs be placed on patients. So, we call under-insured and even the uninsured where you want to have a more upfront financial assistance conversation and creating that tightly knit workflow to help identify that through the price transparency and estimation will enable patients to better know, ‘can we afford it? Can we not? If we can’t afford it, what are my options?’ So they don’t feel reluctant to get care, but they feel like the provider organizations are really working with them to be helpful. And helping them find a solution so they can get care, but they also don’t create an extra financial burden on themselves.

JC: As providers share this information and communicate with patients. I think it’s really important to make it very clear and in a concise way using language that patients understand. So we’re talking a lot about price transparency. That doesn’t necessarily mean that price transparency needs to be the way that you refer to this program.

It’s really making sure that patients… it’s communicating very clearly all the tools and information and resources that they have access to. And for most patients that might just mean connecting them with your financial services team or your personal assistance program and having that really be a dialogue.

I think it’s important to make sure that the information is clear. It’s concise. You’re not using language that is a legal term that patients wouldn’t understand. So sort of putting it at their level and making sure that it’s just very clear and easy to access if they’re going through a website or if they’re calling the phone number to talk with someone.

PK: So I think there’s some key considerations you’re looking for. And some fall in the realm of the operations side of the house and some fall in the realm of technology and digitally enabling patients to have this experience. So first, I think it’s creating a strategy around the patient financial experience or the patient experience overall and using the price transparency component as a large initiative underneath it.

And then once you do that, you start to identify creating a much more refined and streamlined workflow for patients to enter into. So really it’s on an operational side, you’re mapping it out. And these are the functions that are going to hit scheduling departments, departments that do key revenue cycle functions around patient access.

So, pre-registration registration, insurance verification, et cetera, financial counseling, like we talked about. And then you have your component on the back end, which is the actual collections, which might happen at times. So you’re really looking at a more holistic view in terms of how you need to operationalize this.

And it’s more than just within the revenue cycle. If you’re a large provider organization, you need to get your clinics involved, your key departments involved, providers have to be integrally involved in these conversations. And then I think technically you need to evaluate your ecosystem and say, ‘within our core systems that we have today, can I do these things like provide an estimate? Can I do these things like collect payments ahead of time or pre-service  based off of the estimate? And can I do it in such a way that’s engaging with the patient to enable a level of self-service and customization so it’s not a generic experience? And I think those are the key things. So, defining the strategy, working with those departments to create that operational workflow, but making sure that workflow is supplemented with the right technology, both within your organization – and that might be infrastructure-related – as well as more patient-facing to get them in there. But really, when you think about it, that means it’s more than just a revenue cycle issue or a clinic issue. We’re talking about several different departments working in an integrated fashion to create that seamless experience.

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In High Stakes, Strategic Positioning

What Democrat-Controlled Washington Could Mean for Healthcare Providers

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For the first time since 2008, Democrats are poised to control both chambers of Congress and the White House once Joe Biden is sworn into office. The last time Democrats had complete control of Washington they used their political capital to pass the Affordable Care Act (ACA).

So, should we expect more sweeping change now that Democrats can once again run the field? Probably not.

There are two big differences between 2008 and now: Democrats razor-thin majorities in Congress and the COVID-19 pandemic that will continue to dominate DC.

What can healthcare leaders expect from a Democratic-controlled Washington? Here are a few thoughts:

More and bigger COVID-19 relief. While the idea of $2,000 stimulus checks for most Americans has grabbed headlines, Biden and congressional Democrats are certain to push for a new round of federal COVID-19 relief. That means additional dollars to support cash-strapped healthcare providers and more money to boost the sluggish vaccine rollout. Knowing this, now is the time for healthcare leaders to be in contact with their federal elected representatives to discuss the impact COVID-19 has had on their organization, team and community.

Shoring up the ACA. The thin majorities in the House and the Senate limit Democrats’ ability for large-scale healthcare reform like a public option or Medicare for all. However, expect Biden and congressional Democrats to restore ACA funding that was cut by the Trump administration and push for new exchange subsidies that would lower the overall consumer cost to purchase plans through the exchange.

Additional scrutiny on (some) healthcare consolidation. For months, experts have predicted that the financial challenges created by the pandemic will accelerate health system consolidation. At the same time, president-elect Biden has suggested healthcare mergers, especially mega-mergers, will receive additional scrutiny. Acquisitions of rural hospitals and smaller health systems are unlikely to receive the same attention from federal regulators as the mega-mergers.

Friendlier environment for unions. President-elect Biden has promised to be “the strongest labor president” ever. Additionally, Biden has chosen Boston Mayor Marty Walsh, a former labor union leader, as his Labor secretary. With Biden in the White House and Democrats controlling Congress, look for movement on the PRO Act, a rewrite of the National Labor Relations Act, that would make union organizing easier and weaken right-to-work laws.

With changes expected on both the legislative and regulatory fronts, now is the time for healthcare executives to have a thoughtful conversation with their leadership team about how change in Washington will impact their organizations. And, it never hurts to establish or renew relationships with your elected representatives to ensure your organization’s point of view is known.

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