Exploring the Intersection of Business, Healthcare, and Policy
Big announcement from our founder, Dr. Adam Brown: the University of North Carolina’s (UNC) Kenan-Flagler Business School has announced the addition of a “Business in Healthcare” minor. This decision makes it clear that UNC’s Center for the Business of Health is meeting the moment to ensure future U.S. business leaders understand the challenges the healthcare system faces and how the private sector can better meet the needs of patients and communities.
We are hoping this new offering helps foster the careers of more physician-executives. Check out this blog post to see why we think that dichotomy is so important.
Impact happens when we bring together the best schools, the best minds, the best people, and the best ideas. Our team would love to engage with you today to pass on some of the lessons that Dr. Brown is offering students at Kenan Flagler. Get in touch here.
FTC noncompete ban will increase physician autonomy
As Healthcare Dive reported, the U.S. Federal Trade Commission (FTC) voted last week to ban noncompete agreements. Specifically, the rule prevents employers from enforcing current noncompete agreements and from issuing new ones. The rule does not apply to nonprofit hospitals and some highly compensated executives, but, still, you read the first sentence right: most healthcare professionals who previously signed noncompete agreements have had these shackles removed.
That’s big since, according to the American Medical Association, between 37 percent and 45 percent of physicians are affected by noncompetes.
According to AXIOS, of the roughly 26,000 comments the FTC received regarding rule, a “significant” number came from healthcare employees. These comments argued that:
Particularly in rural areas, employers can force these agreements on doctors and nurses while offering lower wages because they know there are few other options for work.
Even healthcare workers making a “decent living” feel they did not have bargaining power.
Noncompete agreements were “coercive.”
Our BIG Thoughts: Oh, we’ve got them. With nearly 80 percent of physicians employed by large corporate entities, will FTC's decision will restore autonomy to physicians. Check out Dr. Brown’s interview with FOX 5 DC for more, and check out his LinkedIn post too.
Momentum building against private equity in healthcare
As Fierce Healthcare reported, a new study by the Private Equity Stakeholder Project (PESP) indicates more than one-fifth of the healthcare companies that filed for bankruptcy in 2023 were owned by private equity (PE) firms. Some of them were owned by the same firms. Indeed, the group’s report “names and shames” specific “repeat offender” firms, including KKR, Fierce Healthcare noted. (Becker’s Hospital CFO Report has more details about the report.)
This report is not the last we are likely to see from PESP. In fact, Becker’s Hospital Review reports the nonprofit watchdog of the private equity industry and Wall Street recently launched the Private Equity State Risk Index, which will assess the effects and risks that private equity poses in different U.S. states.
Watchdogs are not the only ones taking notice. According to a separate Fierce Healthcare report, federal regulators are weighing new safeguards against how PE firms operate within the healthcare sector and “aren’t signaling any reprieve for the corporate investors experts say are behind withering care standards and preventable bankruptcies.”
Our BIG Thought: These numbers are staggering, but we still believe PE can be a positive force in healthcare. It can, for example, provide capital for innovation, scale organizations, and drive the adoption of new technologies and practices. Clearly, however, risks must be carefully managed. To avoid further bankruptcies, policymakers must strike a delicate balance between encouraging investment and innovation while protecting the interests of patients and providers. Read more here.
A solution to staffing challenges
According to Becker’s Hospital CFO Report, 36 rural hospitals have closed since 2020. “The closures highlight the heightened financial challenges that rural hospitals face amid persisting workforce shortages, rising costs and leveling reimbursement. In addition, only 45 percent of rural hospitals now offer labor and delivery services, and in 10 states, less than 33 percent do,” Becker’s says.
Meanwhile, Oliver Wyman reports that “Staffing poses the greatest immediate challenge. Redesigning key processes and teaming models can offer relief to a tired workforce and reset the cost structure.”
Our BIG Thought: It is no secret that we think hospitals need to think outside their own walls to address their staffing challenges. As Radiant Healthcare explains, the significance of Healthcare Business Process Outsourcing cannot be overstated, particularly considering the profound impact of the COVID-19 pandemic as healthcare organizations face ongoing challenges to minimize expenses, optimize efficiency, and enhance patient outcomes.
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