Hospitals and health systems are seeing some signs of stabilization in 2023 following an extremely difficult year in 2022. Workforce-related challenges persist, however, keeping costs high and contributing to issues with patient access to care.

With 18 announced transactions, Q3 2023 continued the momentum in activity we have seen throughout the year. A high percentage of financially distressed organizations in this quarter’s transactions reflected the impact of challenging operational and financial headwinds.

Today, the commercial group health insurance market is hollowing out, primarily driven by affordability pressures that have been building for decades.

Before you can establish the organizational thought platform that best guides your hospital forward, you will need a leadership team that is committed to creating a “listening and learning” healthcare company.

Despite significant volatility in the capital markets and operating and financial headwinds in the healthcare industry, medical office buildings are holding their own as attractive investment opportunities, according to our survey of a diverse range of real estate investors.

While hospital operating margins remain below historical levels, overall conditions have stabilized in 2023. The median Kaufman Hall Calendar Year-To-Date Operating Margin Index reflecting actual margins was 1.1% in August.

Counterparty risk management must be continually reinforced by implementing and following best practices. This process can help form a stronger and more diverse network of banking partners that will serve an organization well throughout its business cycle.

Balance sheet strength has buffered consumers and businesses from some of the restrictive shock of higher rates. With a relatively brittle revenue model in healthcare, the focus becomes whether, when, and how to restructure operations as balance sheets are spent down.

In the pre-pandemic era, payer-provider partnerships were often focused on creating value by managing costs of care and delivering high-quality care. In today’s more challenging macro-economic environment, these conversations are becoming more direct and practical, with both payers and providers asking hard questions.