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Healthcare Experts Talk Disruption

Updated: Apr 28, 2020

What are the disruptive forces that could upend the acute care business? Are hospitals and health systems well- positioned to weather disruption? Who are the disruptors? And what should analysts look for as they consider the creditworthiness of nonprofit hospitals and health systems? A panel of experts addressed these questions and more at the Advanced Seminar on the Changing Face of Healthcare, sponsored by the National Federation of Municipal Analysts, and held in Minneapolis on October 16-18, 2019.

The panel included:

Liz Sweeney, President, Nutshell Associates, LLC (moderator)

Craig Samitt, President & CEO, BlueCross BlueShield of Minnesota

James Hereford, CEO, Fairview Health System

Eric Larsen, President, The Advisory Board Company

Panelists described the current environment as a time of "deep anxiety" for providers, who are concerned about disruption from many directions, including activist employers like Walmart, the big tech companies like Amazon and Apple, private equity, and vertically integrated competitors such as CVS Aetna and Optum (a division of United Healthcare). Panelists noted that even large nonprofit health systems are tiny compared to some of the large and well-capitalized disruptors who are actively looking for ways to engage in the healthcare space, particularly the big tech companies, and even the federal government (through Medicare Advantage) is a disruptor. Panelists recommended that healthcare providers avoid getting into the health plan business if they aren't already, instead focusing on collaborating with health plans to take some risk for the health of local populations. They stressed that legacy business models, where hospitals earn margins by doing as many high-paying cases as possible, will not be winning strategies in the future.

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