Healthcare Financial Management

I've spent my career helping both sides of a $217 billion argument. I have to admit, I've gone through a bit of a mid-life crisis lately. I've helped health systems maximize billing and lower denial rates. Then I've gone to the payer side and stood up cost containment strategies. I'm proud of my career, but it feels like pushing a boulder one way, then walking to the other side and pushing it back. So much of the healthcare spending problem is adversarial: $𝟳𝟬.𝟳𝗕 𝘁𝗼 𝗮𝗿𝗴𝘂𝗲 𝗮𝗯𝗼𝘂𝘁 𝗯𝗶𝗹𝗹𝘀 Providers hire appeals teams to get claims paid. Payers hire review teams to push them back. Between them, $70.7B annually goes to one question: should this bill be paid? $𝟲𝟬𝗕 𝘁𝗼 𝗲𝘅𝗽𝗹𝗮𝗶𝗻 𝘄𝗵𝗮𝘁 𝘆𝗼𝘂 𝗼𝘄𝗲 Health systems spend $40B helping you understand your bill. Insurers spend $20B on call centers to explain your EOB. You call one, they tell you to call the other. $𝟱𝟱𝗕 𝘁𝗼 𝗮𝘀𝗸 𝗮𝗻𝗱 𝗴𝗶𝘃𝗲 𝗽𝗲𝗿𝗺𝗶𝘀𝘀𝗶𝗼𝗻 Your doctor says you need a procedure, and the payer asks for proof. Providers spend $35B requesting authorization, payers spend $20B reviewing those requests - and 93% get approved anyway. $𝟮𝟬𝗕 𝗯𝗲𝗰𝗮𝘂𝘀𝗲 𝗻𝗲𝗶𝘁𝗵𝗲𝗿 𝘀𝗶𝗱𝗲 𝘁𝗿𝘂𝘀𝘁𝘀 𝘁𝗵𝗲 𝗼𝘁𝗵𝗲𝗿 Providers spend $8B proving they're not cheating. Payers spend $12B checking. $𝟭𝟭.𝟯𝗕 𝘁𝗼 𝗺𝗮𝗶𝗻𝘁𝗮𝗶𝗻 𝗹𝗶𝘀𝘁𝘀 𝘁𝗵𝗮𝘁 𝗮𝗿𝗲 𝘀𝘁𝗶𝗹𝗹 𝘄𝗿𝗼𝗻𝗴 $8.5B in provider credentialing, $2.76B in payer directory maintenance - and the lists are still wrong half the time. Add up the adversarial spending across healthcare, and you get $217 billion - roughly $650 for every person in America, spent not on care, but on providers and payers fighting each other. Other industries don't face this problem. In retail, Walmart and P&G negotiate hard, but both want products on shelves. In manufacturing, Toyota and its suppliers fight over price, but both want parts delivered. The transaction is the goal. In healthcare, one side's core function is often to prevent the transaction the other side is trying to complete. Payers benefit when they pay less. Providers benefit when they get paid more. So both sides hire armies of administrators - a growing arms race, even as every other industry sees transaction costs fall with scale and technology. The most prominent thing on this chart is actually hidden: the patient. They spend zero dollars on this fight, but they pay for every dollar of it - in premiums, in bills, and in hours on hold being told to call the other number.

Two Dallas hospitals sit 3 miles apart. Medicare pays one of them 4.77x more for the same hip replacement. --- For DRG 470 (Major Hip and Knee Joint Replacement), here is what CMS FY2026 IPPS actually pays each of them: 🏥 Baylor University Medical Center: $19,395 🏥 Parkland Health (Dallas County Hospital District): $92,451 Both are 500+ bed teaching hospitals. Both sit in the same CBSA. Both operate under the exact same wage index of 0.9721. So where does a $73,056 difference come from? --- It isn't the base DRG rate. Here is the full CMS FY2026 payment breakdown for DRG 470, line by line: 💵 Operating Federal Base DRG ↳ Baylor: $12,800 ↳ Parkland: $12,800 ↳ Gap: $0 (uniform within the CBSA) 💵 IME (Indirect Medical Education) ↳ Baylor: $1,425 ↳ Parkland: $5,317 ↳ Gap: +$3,892 💵 DSH (Disproportionate Share) ↳ Baylor: $510 ↳ Parkland: $1,789 ↳ Gap: +$1,279 💵 Uncompensated Care Payment ↳ Baylor: $3,564 ↳ Parkland: $71,888 ↳ Gap: +$68,324 💵 Capital PPS ↳ Baylor: $1,124 ↳ Parkland: $1,480 ↳ Gap: +$356 TOTAL ↳ Baylor: $19,395 ↳ Parkland: $92,451 ↳ Gap: $73,056 (4.77x) --- The "Operating Federal Base DRG Payment", the number most people mentally label "the Medicare rate", is literally identical at both hospitals. Every dollar of the $73,056 gap comes from four hospital-specific add-ons, and 94% of the gap is driven by a single line: Uncompensated Care Payment. ↳ These are policy-driven subsidies, not market prices ↳ And they quietly get embedded into every downstream benchmark that uses "Medicare" as a denominator --- This matters if you benchmark hospital prices to drive patients to lower cost facilities. Because when the Medicare number can swing 4.77x between two hospitals across town from each other, "% of Medicare" stops being a useful comparison tool, even though it's still the default metric almost everywhere. Over the next 4 posts in this series, I will show you exactly why, and how to benchmark around it. --- 📊 Source: CMS FY2026 IPPS Pricer | https://lnkd.in/ewvaY-Yu ♻️ Repost for healthcare finance professionals still using "% of Medicare" as a primary benchmark 🔔 Follow me for more on CMS pricing, hospital benchmarking, and price transparency (Brian Cotter, Bright Spot Insights)

#Nationwide Employer Healthcare Strategy. Self-Funded nationwide employers are facing employee health plan budget problems. Healthcare costs are running unexpectedly high. These high healthcare costs are being driven by High Cost Claimants... the 5% of health plan members with high costs that drive 50% of overall health plan spending. Here are 5 #Strategies for Employers to Lower High Claimant Healthcare Costs: 1) #Network: Switch carriers to the only 1 out of the 4 major insurance carriers that has decent contracts with major hospital systems. 2) #ClaimsData: Get your claims data including allowed amount (and preferably Billed Charges, Provider NPI number and Provider Tax ID Number). Put your carrier out for RFP if necessary and include this data requirement in your RFP. 3) Engage #HighCost Claimants: Use the claims data to identify and assist existing high cost claimants and predict and prevent the most probable future high cost claimants. Use age greater than 50 as an initial screen for these potential high cost claimants. 4) Address Fraud, Waste and Abuse (#FWA): Use your claims data to identify fraudulent claims and prevent future payments to that same provider equal to the amount of the fraud. 5) #PBM: Carve-out your PBM to a transparent, pass-through PBM that DOES NOT require you to fill your specialty pharmacy medications through the mail order specialty pharmacy that they own. #EmployeeBenefits #HealthInsurance #Healthcare

The US healthcare marketplace has no idea how to  value behavioral health interventions. And it's costing us everything. Here's what insurers are missing: ↳ Veterans getting mental health care show 40%   lower late-stage cancer rates ↳ Depression treatment cuts heart failure   rehospitalizations by 35% ↳ Anxiety therapy reduces all-cause mortality   in cardiac patients The math is staggering: 1/ Every $100 invested in behavioral health  ↳ Returns $190 in reduced medical claims ↳ Prevents costly emergency escalations ↳ Cuts inpatient hospitalization rates 2/ Mental health treatment for seniors ↳ Reduces dementia diagnosis rates significantly ↳ Particularly effective for vascular dementia ↳ Saves decades of long-term care costs 3/ Employer programs prove the ROI ↳ Telepsychiatry shows comparable total costs ↳ Outpatient interventions prevent crises ↳ Early screening stops illness progression Yet insurers still treat mental health as  "nice to have" instead of "must have." This isn't just about parity laws. It's about basic healthcare economics. When we underpay for behavioral health, we  overpay for everything else. Mental health treatment doesn't just save minds. It saves lives, money, and entire healthcare systems. ------------------------------------------- ⁉️ How much longer can we afford to ignore  the $190 return on every $100 invested? ♻️ Share if you believe behavioral healthcare is mispriced. 👉 Follow me for more (Eric Arzubi, MD).

Caring for aging parents is a challenge many don’t see coming. It can get overwhelming fast. Are you ready? I see it all the time—families blindsided by how quickly those responsibilities show up. And trust me, the financial hit is real. Assisted living can run over $70,000 a year, and memory care? Easily $90,000 annually. So, how do you prepare for something so overwhelming? Here’s what I tell my clients: ➡️ Talk now, not later. Have the tough talk with your parents. Ask about their care wishes and whether they have assets or insurance. The sooner you know, the better you can plan. ➡️ Don’t wait—explore options today. Visit facilities, compare home care, and nail down the costs now. Scrambling in a crisis is the last thing you want. ➡️ Stay financially flexible. Medical and care costs are wild cards. Make sure your plan can handle the unexpected with savings, insurance, or other strategies. And if you’re dealing with this now, protect yourself. In your 50s? Look into long-term care insurance—especially if self-insuring isn’t an option. It’s a smart move, whether you have kids or not. It’s about peace of mind and ensuring you don’t pass the burden onto others. Planning today means less stress tomorrow. Let’s make sure you’re ready. —— P.S. Want to see how long your current assets might last when it comes to long-term care? Use the calculator in the comments.

Vertical-Specific Payment Operations Solutions Market Map 💡 Unique workflow, data and/or integration needs often demand an industry-specific payment operations solution. 🚑 Healthcare: Today’s healthcare system is deeply fragmented with 400–500 payors and ~860k doctors, causing payment friction amongst all key stakeholders. On the payor-provider side, submitting and paying claims is a complex, inefficient process with physician practices spending ~$30B on billing costs annually and only ~60% of claims getting paid electronically. Patient collections for practices continues to be a challenge with a ~75% patient payable collections rate. 📱 Retail/Commerce: Retail/commerce businesses must be able to accept multiple payment methods both in-store and online, ideally embedded within their core operating software. Research from CustomerThink suggests that 50% of customers will cancel their orders if they cannot pay with their preferred method. 💳 Services: The client base for companies in this subsegment are often small to medium sized businesses — think local gyms and fitness classes, hair salons, etc. These clients have had limited access to software, e-commerce or electronic payments acceptance historically. ✈️ Travel, Hospitality, Real Estate: As travel has increasingly shifted to digital channels post-pandemic (e.g., OTAs are now 40% of market), payments challenges have grown (e.g., split/commission payments, instant payouts). 👨💻 Software & Subscription Economy: Software is now a ~$0.8T market, with vendors leveraging their distribution to cross-sell electronic payment acceptance to their clients. Often, it can be advantageous economically to underwrite clients as sub-merchants by becoming a payment facilitator. Payfac capability requires expertise, software and compliance tools. 🛡 Insurance: Payments companies serving the insurance vertical primarily facilitate collections and/or claims payouts, which have historically been manual, paper-based processes. 🏦 Government & NPO: Local governments and utility companies offer regulated, low margin services and need software solutions to manage payments cost and increase affordability to consumers. 🚚 Supply Chain & Transportation: The payments complexities in this $200B+ vertical include managing timing for the release of both goods and funds, multi-party payments and legacy systems or limited data. 🎰 Gaming: The challenge in this space is enabling a seamless pay-in/payout experience while preventing fraud. A study by PayNearMe found that over half of users signing up for a new betting application have faced declined payments. 🌐 Web3: Web 2-Web 3 interoperability is paramount to adoption of digital assets, including fiat-crypto rails. Source: Tarsadia Investments - https://bit.ly/3QhLrZf #Fintech #Banking #Ecommerce #Retail #OpenBanking #OpenAPIs #Orchestration #FinancialServices #CreditCards #Payments #DigitalPayments #OpenData #Cloud #SaaS

Your HealthTech startup isn’t a tech company. Treating it like one can be fatal. I’ve watched brilliant founders from SaaS, fintech, and AI stumble in healthcare. Not because they lacked skill, but because they assumed healthcare works like every other industry. It doesn’t. Here’s what makes HealthTech a world of its own: 1. You’re selling to institutions, not individuals. Hospitals, insurers, and regulators move carefully, not quickly. Procurement in large systems can take 18+ months, with decisions driven by risk and compliance over hype. Committees replace single decision-makers, and the biggest competitor is often the status quo. 2. Trust is everything. In healthcare, one misstep - clinical, ethical, or regulatory - can destroy credibility overnight. I’ve seen startups lose traction after minor compliance lapses. The rules around AI and digital health evolve constantly, and staying ahead of regulation is now a core competency, not a checkbox. 3. Adoption is the hardest challenge. Clinicians spend roughly 40% of their day on admin tasks. Patients are already overloaded. If your product doesn’t fit seamlessly into existing workflows, it won’t get used... no matter how elegant the tech. True adoption takes empathy, support, and time. 4. Solve a mission-critical problem. In healthcare, survival depends on necessity, not novelty. “Nice-to-have” tools don’t last. Clinical validation through peer-reviewed studies and real-world evidence matters more than hype. Evidence earns trust—and trust drives growth. 5. Investors now expect proof of outcomes. Funding is shifting toward startups that demonstrate measurable clinical impact and sustainable revenue models, especially in high-need areas like maternal health and chronic disease management. Impact now trumps velocity. 6. Partnerships power growth. Strategic collaborations, like those between pharmaceutical companies and AI imaging startups, are shaping healthcare innovation. They help new entrants navigate regulation, gain credibility, and scale responsibly. 7. Play the long game. Healthcare rewards patience, resilience, and humility. Quick hacks and blitz-scaling don’t work here. The founders who listen, learn, and adapt to the system’s realities are the ones who thrive. HealthTech is healthcare. With just enough technology to make it work better, not worse. What would you add?

Higher health care costs are increasing the likelihood of difficult financial tradeoffs, including rationing prescriptions, delaying necessary care and cutting back on essentials like food or utilities. These are decisions that often worsen health outcomes and lead to increased absenteeism, lower productivity, and negative downstream effects across the workforce. West Health-Gallup’s latest affordability index found that an alarming one-third of Americans are making significant sacrifices due to health care costs. There are also broader economic consequences here – with more consumers reporting taking out loans or avoiding buying homes. The cost of care shouldn’t thwart someone’s ability to thrive or achieve their goals. Ellyn Maese, PhD at Gallup captures this reality: “Healthcare affordability is not just a health issue: It is a significant economic and societal challenge that affects nearly every aspect of life.” We have to do better. Lowering health insurance premiums is a first start. Additionally, we know that delayed and foregone care have a more dire impact on people living with costly, high-need conditions. These are two of the reasons why Morgan Health is deepening its focus on flexible, affordable coverage options (like those offered by Centivo and Venteur) and high-quality specialty care for conditions like cancer and neurodiversity (Thyme Care, Aradigm and Cortica). This work is important - thanks to Ellyn and interested in your thoughts. https://lnkd.in/eCR9YrZU

Hot take: the biggest threat facing hospitals and health systems in 2026 isn't failure to have an AI plan. Lest we forget in all the excitement about ACCESS, ELEVATE, and OpenAI/Claude for Healthcare, January 1st marked the official start of the mandatory CMS TEAM model. It joins last year's (also mandatory) IQR Inpatient THA/TKA PRO-PM reporting requirement as tangible economic threats. Meanwhile, drug infusion payments are now site neutral, the inpatient only list has been phased out (including all MSK procedures), and site-of-service arbitrage may be on its last legs. These programs will hit hospital bottom lines harder and faster than most tech deployments. Sure, most admins know they need an AI/tech strategy. But the smart ones are focused on the 1% of total Medicare Part A dollars already at risk with IQR and projections that TEAM will be a money loser for many systems (with downside risk is unavoidable in Year 2). The ROI on tech deployments remains fuzzy. The penalties associated with these CMS/CMMI programs are not. The two may not be mutually exclusive, but figuring out AI clinical workflow integration takes time — a luxury few have. Now is not the time to get distracted by shiny new tech. These models are already here. Site neutrality is already here. Without a coherent quality strategy or outpatient/ASC plan, once lucrative inpatient joint and spine cases may soon be liabilities. More than AI, this is what should be keeping hospital leaders up at night. Independent docs aren't immune either. Their boat is already taking on water from another year of cuts, and mandatory quality reporting is coming for them too.

Hospitals are getting squeezed on costs and payments at the same time.   Unprecedented financial challenges are affecting how hospitals purchase medical devices, technology, and SaaS.   Here’s a quick look at the state of the state, a prediction for the next 18 months, and three tips to adapt.   𝗣𝗮𝗿𝘁 𝟭: 𝗧𝗵𝗲 𝗦𝘁𝗮𝘁𝗲 𝗼𝗳 𝘁𝗵𝗲 𝗦𝘁𝗮𝘁𝗲: [1] [2]   • Labor is 56% of hospital costs. RN salaries grew 26.6% faster than inflation over four years.    • Hospital expenses rose 5.1% in 2024 vs. 2.9% general inflation.    • Medicare pays only 83 cents per dollar of hospital costs, creating $130 billion in underpayments in 2023.    • Medicare Advantage (MA) patients have longer observation stays (36.9% longer), but plans reimburse only 49% of costs.    • Tariffs are pushing up the cost of imported medical devices, supplies, and drugs.   𝗣𝗮𝗿𝘁 𝟮: 𝗠𝘆 𝗣𝗿𝗲𝗱𝗶𝗰𝘁𝗶𝗼𝗻 𝗳𝗼𝗿 𝗟𝗮𝘁𝗲 𝟮𝟬𝟮𝟱–𝟮𝟬𝟮𝟲 ✔️ Purchasing committees will demand clearer ROI and better payment terms. ✔️ Budgets will tighten. Capital spending may freeze or slow even more. ✔️ Cost-pressured hospitals will push vendors harder for price breaks, value-based models, or shared-risk contracts. ✔️ Vendors who don't adjust will face longer sales cycles, stalled deals, or lost renewals.   𝗣𝗮𝗿𝘁 𝟯: 𝗧𝗵𝗿𝗲𝗲 𝗧𝗶𝗽𝘀 𝗳𝗼𝗿 𝗩𝗲𝗻𝗱𝗼𝗿𝘀 𝗮𝗻𝗱 𝗚𝗧𝗠 𝗧𝗲𝗮𝗺𝘀   1️⃣ Uncover Marketplace Struggles • Talk to real buyers about staffing shortages, reimbursement cuts, and tariff worries.    • Avoid generic pitches. Show you understand their financial pain and priorities.    • Use buyer language in your marketing.  2️⃣ GTM Planning: Align to Cash-Flow Realities • Consider payment flexibility (subscriptions, deferred payments, leasing).    • Build a strong ROI case. How does your solution reduce costs or free up staff time?    • Be ready to help them get budget approval.    • My take: Cash-flow sensitivity will decide who wins and loses in sales cycles.   3️⃣ Customer Retention: Help Them Navigate the Storm • Over-communicate. Make onboarding and support easy.    • Watch for new pain points (supply shortages, tariff changes). Adjust with them.    • Be fair on renewals. Don’t add big price hikes when budgets are flat.    • Happy customers will remember who helped them weather tough times. [1] American Hospital Association. (2025, April). 𝘛𝘩𝘦 𝘤𝘰𝘴𝘵 𝘰𝘧 𝘤𝘢𝘳𝘪𝘯𝘨: 𝘊𝘩𝘢𝘭𝘭𝘦𝘯𝘨𝘦𝘴 𝘧𝘢𝘤𝘪𝘯𝘨 𝘈𝘮𝘦𝘳𝘪𝘤𝘢’𝘴 𝘩𝘰𝘴𝘱𝘪𝘵𝘢𝘭𝘴 𝘪𝘯 2025. American Hospital Association. https://lnkd.in/eHmyRG-a [2]  Financial Times. (n.d.). 𝘐𝘯𝘷𝘦𝘴𝘵𝘰𝘳𝘴 𝘴𝘩𝘳𝘶𝘨 𝘰𝘧𝘧 𝘋𝘰𝘯𝘢𝘭𝘥 𝘛𝘳𝘶𝘮𝘱’𝘴 200% 𝘵𝘢𝘳𝘪𝘧𝘧 𝘵𝘩𝘳𝘦𝘢𝘵 𝘰𝘯 𝘱𝘩𝘢𝘳𝘮𝘢. Financial Times. Retrieved [date you accessed it], from https://lnkd.in/eTG-_iyy #healthcare #GTM #leadership