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Dave Hesselink is a managing principal and the fair market value and business valuation practice co-leader within the physician workforce practice at SullivanCotter.

Federal officials are giving more scrutiny to the financial arrangements between hospitals and health systems and their employed and contracted physicians.

Mitigating increased compliance risk through effective governance | Viewpoint

By 2050, it's estimated that 139 million people worldwide will have dementia, but by today's standards, 60% will be undiagnosed. It's clear that there's a significant gap in dementia detection and care, but what can your organization do about it?

Get perspectives from clinical leaders and neuroscience experts about the underlying causes and consequences of these gaps, practical opportunities to address them, and a proven roadmap that shows how leading health systems have successfully transformed their dementia screening and care processes.

Closing the Dementia Care Gap: Expert Insights and Proven Strategies for Health Systems

Sanford Health serves 2.4 million patients annually, and two-thirds of those patients live in rural communities.

Bill Gassen, president and CEO of Sanford Health, says he knows it’s not easy for some rural Americans to get to a doctor, much less a hospital. He acknowledges “the challenges that we're seeing right now in rural America around access, quality, sustainability.”

Based in Sioux Falls, South Dakota, Sanford operates 56 hospitals and more than 280 other healthcare locations across six states in the rural Midwest. Sanford also recently 

merged with the Marshfield Clinic Health System

, a Wisconsin-based organization that also serves a largely rural population.

Gassen says that Sanford is focused on making it easier for its rural communities to get access to care.

“Our efforts right now, both with the integration with Marshfield Clinic as well as across the whole of the organization, is, how do we address those three challenges right now that exist, I believe, more prominently within rural America,” he says.

Sanford CEO talks about merger with Marshfield Clinic and opportunities for more growth

In an interview with Chief Healthcare Executive®, Gassen outlines the steps Sanford is taking to expand access to healthcare services in the heartland. He talked about the recent opening of Sanford’s virtual care center, and its expansion of graduate medical education programs to train more physicians.

Sanford’s service area isn’t exclusively rural, but most of its patients live in smaller communities, Gassen notes. Sanford’s footprint covers South Dakota, North Dakota, Minnesota, Iowa, Wisconsin and Michigan’s upper peninsula.

Gassen acknowledges that his concerns about access mirror those of his colleagues leading hospital systems in cities and suburbs.

“I think you'll hear very common talking points out of them that right now, they're also trying to focus on,” Gassen says. “How do we address access to continue that march on improving quality, and how do we do that in a way that is financially sustainable for all the parties involved?”

Sanford is focused on access and building an integrated organization that utilizes all of its capabilities to meet the needs of patients, Gassen says.

The health system is working to make sure that its 4,000 providers at Sanford Health “have what they need to be successful,” he says.

“We believe one of the important tools, if not the most important tool, that they have, is technology. And so we really invested heavily, and will continue to invest more into the future, to make sure that we arm our clinicians with the necessary tools they need to be able to reach their patients,” Gassen says.

Buoyed by a $350 million contribution from Denny Sanford in 2021, Sanford Health has developed a new virtual care center. The center opened in November 2024, and it provides training for clinicians in virtual care and also aims to develop AI-powered tools to improve rural healthcare delivery.

“That virtual care center serves as the epicenter for what is a large, expansive digital footprint that we built out of Sanford Health,” Gassen says. “That allows our clinicians to be able to reach into the smallest of communities, communities where you count the population in hundreds, not thousands or tens or hundreds of thousands, to ensure that they have access to the necessary care.”

Sanford Health now offers virtual care in 78 specialties.

“We believe that's really important by ensuring that more patients get access to more care closer to home,” Gassen says.

Sanford Health looks to continue to build its virtual care capabilities, he says.

“It’s not only going to be a big part going forward, but it's a huge part today, right now,” Gassen says. “I mean, we have providers who are saving patients millions of miles a year in driving, and we know that that not only saves them time, but it also saves them valuable resources by way of finances.”

Those savings cover everything from gasoline to child care, as well as helping patients avoid missing work.

“Removing some of the friction right now from the healthcare system is something that we're committed to doing, and we know that that's going to help us improve access for all of our patients,” Gassen says.

Most health systems are struggling with recruiting and retaining clinicians, and 

rural hospitals can find it particularly difficult to attract and keep talent

Sanford has been working to expand its ability to train physicians, with the idea that it will be easier to keep those doctors down the road.

“One of the things that we've really tried to do at Sanford Health is understand and appreciate that the workforce has been and always will be critically important,” Gassen says. “And in order to ensure that we have access to world-class physicians both today and into the future, we have to be able to build out that pipeline.”

Sanford has invested in training new physicians and now has 40 graduate medical education programs.

“Through those programs, they're allowing us to train physicians as residents and fellows within our communities where we serve and provide care today, and that is really important,” Gassen says.

“We know that nearly 40% of those individuals will stay where they train,” he explains. “And so if we have the opportunity to train these positions in communities where we're at today, we know that that's going to create an opportunity for us to build, recruit and retain those physicians into the future.”

Most of the system’s patients live in rural communities in the Midwest. Bill Gassen, Sanford’s CEO, talks with us about reducing healthcare barriers in the heartland.

Topic

Sanford Health aims to expand access to care in rural America

Costs of Manual / Paper-based Consents

Nonprofit children’s hospitals are seeing solid financial performance, but financial analysts say they can expect challenges coming.

Pediatric hospitals are going to face more financial pressures due to 

, according to Fitch Ratings and Moody’s Ratings.

“Children’s hospitals are adapting with operational innovations and technology adoption, but staffing costs remain high and pending changes to Medicaid funding will test the sector’s resilience,” Richard Park, a director for Fitch Ratings, said in a statement accompanying Fitch’s recent analysis on pediatric hospitals.

Many patients in pediatric hospitals are covered by Medicaid, and that could pose more financial difficulties for children’s hospitals. Medicaid accounted for a median of 51.4% of the gross revenue of children’s hospitals, compared to the median of 15% for hospitals serving adults, according to Moody’s Ratings.

The heavy reliance on Medicaid funding poses a risk for pediatric hospitals, particularly as 

 on how they can finance their Medicaid programs.

, president and CEO of the Children’s Hospital Association, told Chief Healthcare Executive® 

 that the Medicaid cuts coming from the tax bill “are really going to be detrimental to all hospitals, but children's hospitals in particular, because we serve such a high Medicaid population."

Some children’s hospitals get up to 70% and 80% of their revenue from Medicaid, according to Fitch Ratings.

Many of the Medicaid changes in the federal tax package aren’t set to take effect until late 2026 and 2027. But if funding is cut, some children’s hospitals “may ultimately face difficult decisions regarding specialized service lines and uncompensated care,” Fitch Ratings said earlier this month.

Nonprofit pediatric hospitals are generally performing better than adult hospitals, but Moody’s Ratings said fiscal year 2024 operating medians showed “the lowest profitability in at least five years.” The median operating cash flow margin for children’s hospitals was 8.1% in the 2024 fiscal year.

Pediatric hospitals saw a 10.1% increase in revenues in the 2024 fiscal year, which did surpass the increase in costs (9%) in 2024.

Even with some solid performance, pediatric hospitals have yet to see their operating margins return to pre-pandemic levels, analysts say.

Children’s hospitals continue to see higher labor costs and rising costs for drugs and other key supplies.

On the upside, pediatric hospitals typically enjoy strong philanthropic support, since donors tend to be generous to support facilities caring for children. Because of strong fundraising efforts, nonprofit children’s hospitals have been able to continue to invest in their facilities and academic research programs.

Pediatric hospital leaders have said that fundraising is going to be more critical in the coming years, especially with the prospect of reduced support from Medicaid and the federal government.

“Fundraising is going to be even more important,” Lucio Fragoso, president and CEO of 

, said in a recent interview. “We can never put our mission at risk, where we say yes to every child every time.”

With Medicaid cuts, emergency rooms could get even busier

Pediatric facilities still haven’t returned to pre-pandemic levels, and Medicaid cuts in the coming years are going to add pressures, analysts say.

Children’s hospitals seeing financial recovery, but challenges are looming

Dr. Brandon Smith says he has seen more people skeptical or resistant to vaccines in recent years.

Smith, the associate medical director of the Harriet Lane Clinic at Johns Hopkins Children’s Center, says he has seen more vaccine hesitancy since the COVID-19 pandemic. But now, he’s seeing it more frequently.

“Definitely over the past year, I feel like, anecdotally, in our clinic, we've had more conversations,” Smith tells Chief Healthcare Executive®. “We've had more conversations, but also longer conversations too. I do want to say these conversations for providers aren't easy, and they do take longer time in the room to have.”

Vaccine hesitancy has been a growing concern of doctors, healthcare leaders and infectious disease experts, and it’s only magnified at the start of another school year. Doctors have been troubled by the uptick in families opting against vaccines, including typical childhood vaccines, as well as vaccines for Covid and the flu.

 on declines in vaccination. In the 2024-25 school year, 39 states had MMR vaccination rates below the target of 95%, a significant change from five years earlier, when 28 states fell below that benchmark. Last year, 16 states had MMR vaccination rates below 90%.

Dr. Gary Price, president of The Physicians Foundation, says the rising reluctance to get vaccinated is alarming, and healthcare leaders need to rethink their strategies of reaching patients.

“We've seen a tremendous erosion in vaccination rates, just as a simple matter of public health metric,” Price tells Chief Healthcare Executive®. “That's very clear, and it's unprecedented. We now take for granted the diseases we had declared had been eradicated just a decade ago, we're now having outbreaks of them. So something clearly has changed.”

Experts say doctors and health systems need new strategies to counter misinformation

Vaccine hesitancy and the need for different approaches

Addressing vaccine skepticism, without alienating patients

Doctors say they are encountering more misinformation - and disinformation - from patients

. Six out of 10 doctors (61%) say they met with patients who were influenced by misinformation or disinformation, according to a survey released last week by The Physicians Foundation.

Most doctors say they feel well-equipped to overcome misinformation from patients, but Price says some of that confidence may be misplaced.

“If we feel so confident in our ability to deal with this,” he asks, “why have vaccination rates eroded?”

Providers need to understand where patients are and engage patients in a constructive way, Smith says.

“For every parent who comes in, they might fall on a spectrum of accepting to hesitancy, to refusing vaccines,” Smith says. “And I think for us as providers, understanding where they are in that can really help us to then navigate some of these conversations and fully dig into really what some of the concerns may be, and to speak directly to misinformation.”

Doctors need to remember that virtually all parents want what is best for their kids. Some parents may not be going to reliable sources of medical information, but the fact that they’re looking for guidance anywhere is an indicator of how much parents are invested in the welfare of their children.

Physicians need to recognize that in their conversations with their patients, and their families.

“Even for families who are accepting of vaccines, I also want to say that there are legitimate questions about vaccines that can give a healthy conversation  ... And we as healthcare providers are educators to families, so we should be sharing about why the timing of vaccines are this way, or the importance of certain vaccines at this point in the child's life," Smith says.

Healthcare leaders say the federal government’s changes in vaccine guidance aren’t helping matters. With 

, a longtime vaccine skeptic, leading the U.S. Department of Health & Human Services, critics say he’s creating more confusion and skepticism.

Kennedy has said on multiple occasions that he wants vaccines available for all who want them, but he wants to be sure they are safe.

But Kennedy has also changed guidance on the coronavirus vaccine. The government is no longer advising pregnant women and healthy children to get the coronavirus vaccine, and 

healthcare groups have sharply criticized that change

. The CDC says healthy kids can get vaccinated after a consultation with a doctor.

Dr. Georges Benjamin, executive director of the American Public Health Association, says 

Kennedy has fallen short of providing unambiguous support of the measles vaccine

, even with the biggest measles outbreak in decades.

“If you look at the measles outbreak as one example, eventually he finally said, ‘Yeah, you should get vaccinated,’” Benjamin says. But he says Kennedy undercut that message by still advising people to talk to their doctors about whether it’s needed.

“He gave a degree of hesitancy about whether or not you should accept those recommendations,” Benjamin says. “And so that's created a great deal of confusion.”

Physicians and healthcare organizations also expressed alarm when 

the Centers for Disease Control and Prevention announced plans for new research to see if any tie exists between vaccines and autism

The Center for Infectious Disease Research and Policy at the University of Minnesota is working to try and reduce confusion. Dr. Michael Osterholm, the center’s director, is leading an initiative known as the Vaccine Integrity Project.

 last week affirming the safety and effectiveness of the flu, RSV, and COVID-19 vaccines. In its review, 24 experts examined nearly 600 papers over recent years.

Osterholm told Chief Healthcare Executive® earlier this month that the center is looking to provide medical societies and payers with reliable data.

“We're doing the hard lift of understanding all the data that has been generated in the last several years,” he says.

 also issued recommendations on COVID-19 vaccines that differ from federal guidance. The academy advises that all children 6-23 months get the COVID-19 vaccine, along with kids between 2 and 18 years if they have certain risk factors. The group also says all parents and guardians who want their children to have the COVID-19 vaccine should have access to it.

 and is urging insurers to cover those vaccines.

Still, healthcare leaders acknowledge that they need to try different approaches to reach Americans who aren’t getting their information from reliable news sources. And most members of the public aren’t reading medical journals.

Osterholm says everyone in the healthcare ecosystem is wrestling with how to reach people.

“I think that the collective medical community and public health communities need to come together and strategize about what can be done,” he says.

Hospitals and health systems need to take different approaches to reach people in their communities. Price suggests hospitals can use social media to post information, but more importantly, establish a relationship with those in their communities, including some who may not be engaging with the health system.

“I think we need to understand that the fundamental way to communicate this information has changed if we want to be effective,” Price says. “And I think that same idea has to be applied to our public health messaging and communications. And I think doctors in their offices need help with resources like that.”

Health systems and public health agencies may need to look at helping offer guidance to the public on healthy social media viewing, and advice on how they can check AI-generated answers with reliable sources of information, Smith suggests.

Johns Hopkins is partnering with community groups and schools to do more proactive outreach. The system is also developing magnets for parents of newborns, he says. The magnets will spell out the recommended vaccine schedule for the child’s first four years. 

“We’re finding new ways to be proactive about misinformation and specifically about vaccines,” Smith says.

our conversation about misinformation with Dr. Gary Price,

 president of The Physicians Foundation, in the latest episode of “Healthy Bottom Line,” a podcast by Chief Healthcare Executive®.

Providers say they’re facing more misinformation and reluctance from patients about vaccines. Reaching those patients will require new approaches. 

Vaccine hesitancy: Doctors and health systems face more skepticism, and they need new strategies

The Supreme Court on Thursday tossed a lawsuit that once again threatened the Affordable Care Act (ACA), ruling 7-2 that Republican-led states who brought the case lacked legal standing to challenge the law.

For the third time, an increasingly conservative court left intact the law’s protections that require coverage for preexisting conditions, created Medicaid expansion, promote health screenings and preventive care, and launched novel, value-based payment strategies within the agency that manages Medicare and Medicaid.

The ruling comes as President Joe Biden has tried to build on the ACA and create new incentives for states that have not expanded Medicaid to do so, amid mounting evidence that having health coverage reduces mortality.

 and was joined by Justices Elana Kagan and Sonia Sotomayor, as well Chief Justice John Roberts and two appointees of President Donald Trump, Justices Brett Kavanaugh and Amy Coney Barrett. The opinion focused on the fact that individual states governed by Republicans, along with individual plaintiffs, had failed to show “a concrete, particularized injury fairly traceable to the defendants,” and thus could not challenge the law on constitutional merits.

The latest challenge, led by Texas, began after Trump’s 2017 tax law eliminated the enforcement mechanism for the ACA’s individual mandate. On those grounds, the Republican-led states tried to assert that the entire law must fall, even provisions unrelated to the requirement that all Americans have health insurance.

Today, the Supreme Court’s majority found that the states failed to make their case that the de facto end of the mandate would cause them harm, which would create grounds to challenge the entire ACA.

“Unsurprisingly, the States have not demonstrated that an unenforceable mandate will cause their residents to enroll in valuable benefits programs that they would otherwise forgo. It would require far stronger evidence than the States have offered here to support their counterintuitive theory of standing, which rests on a ‘highly attenuated chain of possibilities.’”

Justice Clarence Thomas wrote a concurring opinion, stating, "Although this Court has erred twice before in cases involving the Affordable Care Act, it does not err today."

An estimated 20 million people had gained coverage under the law at a peak in 2017, but there was some loss of coverage during the Trump administration. More recently, more than 1 million people signed up for coverage through the ACA under a 

 authorized by the Biden administration due to the COVID-19 pandemic. The American Rescue Plan reduced premiums, and additional proposals would make those premium cuts permanent.

While many legal experts had questioned the merits of the Republican states’ challenge, the addition of Justices Neil Gorsuch, Kavanaugh, and Barrett to the court raised concerns among the law’s supporters about what would happen once the case reached the highest court. Gorsuch and Justice Samuel Alito dissented, but the other Trump appointees ruled with majority on the narrower question of standing.

The latest challenge was argued in November, just after Barrett joined the court, and the defense was organized by a group of officials from Democrat-led states. Their leader was former California Attorney General Xavier Becerra, recently confirmed as Biden's HHS secretary.

The ACA is now one of the most litigated pieces of legislation in history. It survived an initial challenge after its passage in 2010, although the court did reshape the law by allowing states to opt out of Medicaid expansion.

However, that decision ended up creating an environment for research comparing health outcomes between expansion and non-expansion states, and now data are pouring in that show how populations with health coverage benefit in multiple ways—those 

 who are able to manage their disease suffer fewer complications.

Veterans of the Obama administration who helped write and implement the ACA were surprised and pleased this morning, and said the decision opens the door for the Biden administration to improve the law.

“Bottom line—this is incredible,” former Obama administration policy official Kavita Patel, MD, told MSNBC. “It’s a chance for the Biden Administration to try to take back some of what the country lost when the individual mandate was taken away. … Not being a lawyer, I don’t think you could have a clearer path saying, ‘this is it.’”

“It’s not a close call in terms of the law, and not a close call in terms of who we are as a country,” said former Acting CMS Administrator Andy Slavitt.

Chiquita Brooks-LaSure, now CMS Administrator with chief responsibility for implementing the law, recalled her work on its passage during her tenure with the House Ways and Means Committee. 

"Millions of Americans can breathe a sigh of relief following today’s Supreme Court 7-2 ruling upholding the Affordable Care Act," she said. "This victory assures access to affordable and comprehensive health insurance for patients and families across the country."

She pointed to the fact that 12 states have still not expanded Medicaid, but the Biden administration hopes that will now change.  "Through the ACA, and hand-in-hand with CMS, dozens of states have expanded Medicaid – bringing quality coverage to our family and neighbors who need it most. We will continue to partner with states because we know 4 million more Americans stand to gain access to quality health coverage in the remaining states."

Other supporters of the ACA also called for working to improve the law.

"CareFirst is pleased that the key provisions of the Affordable Care Act remain in effect and will continue to promote access to affordable health insurance for the individuals we serve and all Americans,” said Brian D. Pieninck, president and CEO of CareFirst BlueCross BlueShield. “CareFirst looks forward to continuing our work with federal and state policymakers to maintain and improve access to healthcare throughout our region."

Officials from the Robert Wood Johnson Foundation called for an end of “meritless attacks against a milestone law. … It is time now for our nation to resume its path toward achieving universal health care coverage.”

Dave Hesselink

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