Leadership Health Care (LHC), a Nashville Health Care Council program for emerging leaders, Cohorts provide the participants an opportunity to engage in a peer mentoring program facilitated by an experienced healthcare executive. Throughout six cohort sessions, participants discuss substantive topics around a common focus area to enhance their knowledge and leadership skills.
Navigating Challenges in Healthcare’s Evolving Landscape: Insights on Value-Based Care, Medicaid, and Price Transparency
The healthcare industry is in a state of transformation, with value-based care, Medicaid reforms, and price transparency leading the way. These evolving landscapes present challenges and opportunities that are reshaping how healthcare providers, payers, and investors navigate the system. A recent conversation at out LHC Finance Cohort featuring Brian Tanquilut, Healthcare Services Equity Research Analyst at Jefferies LLC offered valuable insights into the current state of these critical topics.
The Changing Landscape of Healthcare in Nashville
Tanquilut reflected on the transformation of Nashville’s healthcare ecosystem. Traditionally dominated by legacy players the city now hosts a growing number of healthcare companies from outside markets. This shift has expanded opportunities and introduced new investment dynamics, as both public and private companies shape the industry.
“In Nashville, there’s a lot of innovation happening in healthcare—whether it’s technology, new care delivery models, or value-based care,” he said. Even sectors like dental and physical therapy are seeing renewed investor interest, demonstrating that healthcare finance is cyclical, with older models resurfacing in new ways.
“In Nashville, there’s a lot of innovation happening in healthcare—whether it’s technology, new care delivery models, or value-based care.” – Brian Tanquilut, Healthcare Services Equity Research Analyst at Jefferies LLC
Navigating the Realities of Value-Based Care Investments
The discussion on value-based care (VBC) underscored both the promise and the difficulties of these models. Tanquilut highlighted how past investment cycles provide crucial lessons for the future, reinforcing that “in healthcare, history matters.” While some companies have struggled financially, others are finding ways to refine their approaches for long-term sustainability.
A major challenge in VBC lies in the data gap between payers and providers. Delays in patient data—make it difficult to deliver timely care, creating obstacles to the very efficiencies that VBC aims to achieve. Despite these hurdles, VBC remains an attractive alternative to traditional fee-for-service, particularly through capitation models. By providing a fixed payment per patient, capitation can streamline revenue cycles and reduce administrative burdens. However, not all providers can make capitation work, particularly those serving Medicare Advantage (MA) populations. As reimbursement rates tighten and medical loss ratios rise, many VBC providers face financial strain.
Medicare Advantage has historically been a key driver of VBC adoption, offering profitability post-COVID due to higher reimbursements and lower utilization. But with payment rates now under pressure, the financial viability of VBC models is being tested. The road ahead requires balancing innovation with financial sustainability—ensuring that value-based care isn’t just an ideal but a lasting, effective solution.
The Risk of Rate Cuts and Access to Care
While the trend toward home health is promising, participants acknowledged the risks of rate cuts and their potential to destabilize the healthcare system. One cohort participant raised a valid concern about the trickle-down effect of drastic rate cuts, which could push healthcare providers into bankruptcy, resulting in a lack of available care for patients.
Tanquilut noted that the healthcare industry as a whole is operating on razor-thin margins, especially for hospitals. With margins often in the low single digits, drastic cuts to reimbursements or Medicaid funding could lead to hospital closures and broader access-to-care issues. He cautioned that while cuts may look good on paper, they could have serious real-world consequences that would disproportionately affect patients.
The Challenges of Price Transparency
Lastly, the topic of price transparency was brought up. While it’s a well-intentioned policy aimed at creating more openness in healthcare pricing, the reality is more complicated. As Tanquilut pointed out, price transparency laws often only disclose list prices, which may not accurately reflect what patients actually pay. The complexity of insurance contracts means that the prices negotiated between healthcare providers and insurers are often confidential, limiting the usefulness of public-facing price transparency data.
Despite these challenges, there is hope that price transparency will eventually lead to more competition and better pricing for consumers. However, until these issues are addressed, the true impact of price transparency remains unclear.
Moving Forward
As the healthcare landscape continues to evolve, stakeholders must navigate a series of interconnected challenges. From value-based care models that promise efficiency but require the right data and partnerships, to Medicaid reforms that could have far-reaching consequences for providers and patients alike, the need for thoughtful, pragmatic solutions has never been greater.
Ultimately, the future of healthcare hinges on the ability to balance innovation with sustainability—ensuring that reforms in value-based care, Medicaid, and price transparency lead to better outcomes for patients, providers, and payers alike.
The Next Generation of Healthcare Leaders
Leadership Health Care’s mission is to cultivate talented healthcare professionals into the industry leaders of tomorrow. LHC aims to provide young professionals with ongoing opportunities to develop their knowledge of the healthcare industry through educational events and networking opportunities. Fill out this form to learn more about LHC.