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Mark Williams is chief revenue officer of the Americas at Datasite.

Higher labor costs and staffing shortages are pushing hospitals to pursue mergers. These are the same pressures that make due diligence more complex.


Labor pressures are reshaping healthcare M&A strategy | Viewpoint

Innovation, strategic thinking, and a favorable regulatory environment should drive more deals.



Healthcare M&A outlook: A promising landscape for 2025 | Viewpoint

Financial distress, value-based care, and digital healthcare services are some of the forces driving deals.

Healthcare M&A is poised to rise in the second half of 2024 | 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

Noah Wyle won his first Emmy for his starring role in “The Pitt,” the acclaimed series set in a Pittsburgh hospital’s emergency department.

But months before, he captured the hearts of employees at Allegheny General Hospital in Pittsburgh. While most of the show is filmed in Los Angeles, 

some scenes were shot at the Pittsburgh hospital

During a press tour to promote the show, Wyle visited Allegheny General and spent hours talking to staff and taking pictures. Dan Laurent, senior vice president of corporate communications at Highmark Health, the hospital’s parent organization, says Wyle warmly interacted with staff.

“Noah Wyle has been amazing, and the producers have been amazing,” Laurent told Chief Healthcare Executive® in a recent interview.

(See part of our conversation in this video. The story continues below.)

Dan Laurent of Highmark Health talks about Noah Wyle and working with The Pitt

Noah Wyle of The Pitt wins fans in Pittsburgh hospital

When Wyle visited the hospital, he met with many of the staff.

“He came down, and he spent several hours at the hospital getting his photograph with every single person who wanted their photograph with him,” Laurent recalled. “Just so, so gracious. And as you can imagine, the staff love him. And it was really fun. So he spent time in the emergency department and then other parts of the hospital that he wanted to visit.”

Wyle comes across as “a genuine, good guy,” Laurent said.

“When we found out we had the opportunity to have him actually come into the hospital and meet with people, the team of the staff, the ER staff, was through the moon,” he said.

The producers of The Pitt held a screening of the first episode at Allegheny General. Wyle and the producers were in Los Angeles putting the finishing touches on other episodes of the show’s first season. But Wyle and others appeared via Zoom before the hospital on the screening day.

Wyle “zoomed in from his home and took questions from the audience,” Laurent said.

The show has received widespread praise for showing an accurate portrayal of the emergency department, 

Wyle and the show’s actors and producers were meticulous in their work, Laurent says. “You hear a lot about Noah Wyle, you know, he's amazing, and you watch him, it's almost like you feel like he could be providing care at one of your ERs, because … you would never know that he's not an actual doctor. And that goes for a lot of the other folks on the program as well. They have really nailed the casting of this program.”

The Pitt captured the Emmy for best drama series, and Katherine LaNasa won for best supporting actress in a drama. The show captured five Emmy awards.

During his acceptance speech Sunday night, Wyle said, “If anybody is going on shift tonight or coming off shift tonight, thank you for being in that job. This is for you.”

 shooting scenes for the upcoming season. The second season of The Pitt is slated to debut on HBO Max in January.

How ‘The Pitt’ delivers a realistic view of a hospital

The star of The Pitt, Wyle captured the Emmy for lead actor in a drama. He earned the admiration of the staff at the Steel City facility where some scenes were shot. 


Topic

Before the Emmys, Noah Wyle won the hearts of a Pittsburgh hospital

More than 1 million tests and procedures that Medicare patients received in hospitals over a three-year period were likely not needed, according to an analysis released today.

The Lown Institute, named for Bernard Lown, MD, a Nobel Laureate who died earlier this year at age 99, released its 

 that measures how well they do in avoiding low-value care, based on established criteria for overuse.

Most of the top performing hospitals in the Lown Institute Hospital Index are not from large, well-known health systems that appear on the annual rankings of U.S. News and World Report—in fact, only Cleveland Clinic, which ranked 58th on the Lown list, is on the U.S. News honor roll, according to the a statement on findings.

But there were some patterns: of the 50 top performers, nine are in the Northeast and 10 were in the Pacific Northwest. By contrast, the South is home to highest number of poor performers—41 out of 50—and five of the 10 worst performers are found in Florida. The Lown Institute noted that 47% of Florida’s hospitals are for-profit enterprises.

The 2021 Lown Institute Hospital Index measured overuse at 3,100 hospitals from 2016-2018, using data from 100% of Medicare claims between January 1, 2016, and December 31, 2018. The analysis focuses on 12 low-value services, including four tests and eight procedures, with the index giving added weight to services that account for higher shares of overuse.

 at the University of Michigan, low-value care includes services “that provide little or no benefit to patients, have potential to cause harm, incur necessary costs to patients, and waste limited healthcare resources.” The Center estimates that low-value care costs the country more than $345 billion a year, and notes that there have been several initiatives to squeeze low-value care from the system.

“Overuse in American hospitals is a pervasive problem that needs to be addressed,” said Vikas Saini, MD, president of the Lown Institute. “Hospitals want to do better and these objective measures of performance can help them move forward.”

Services measured in the Lown Index are: 

 when patients have not had a meniscal tear; 

, which maps plaque buildup, if done on female patients who have no stroke symptoms or history; 

when performed on patients with stable heart disease; 

electroencephalography (EEG) for fainting

 if patients have not had epilepsy or seizures; 

 if patients have not had pulmonary embolism; 

 for patients without a diagnosis of fibromuscular dysplasia of the renal artery; 

The top 10 high-performing hospitals are as follows:

Scott County Hospital in Scott City, Kansas

Beth Israel Deaconess Medical Center in Boston, Massachusetts

West River Regional Medical Center in Hettinger, North Dakota

Mayo Clinic Health System in Lake City, Minnesota

Sidney Regional Medical Center in Sidney, Nebraska

Mary Hitchcock Memorial Hospital in Lebanon, New Hampshire

Healdsburg District Hospital in Healdsburg, California

Contra Costa Regional Medical Center in Martinez, California

CMS has tried to target low-value care in recent years through the use of alternative payment models (APMs), and efforts to eliminate wasteful hip- and knee replacements have been deemed largely successful. Other hospital safety organizations have zeroed in on unnecessary hysterectomies, which the 2021 Lown analysis found were unnecessary in 64% of the cases. In North Dakota and Wyoming, hysterectomy overuse was 90% and 94%, respectively.

The analysis also ranked states based on the overall record of its hospitals and found that Vermont did the best job of avoiding unnecessary procedures, while Alabama fared the worst.

The analysis by the Lown Institute measures hospitals based on their performance of 12 services performed over a three-year period.

Hospitals in South Fare Worst in Avoiding Low-Value Tests, Analysis Finds

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.

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.

Mark Williams

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