How One CFO Handles Private Equity Competition and Physician Retention

John Beaman, CFO of Adventist Health, knows where to focus strategies for his health system’s success.

In the increasingly competitive landscape of healthcare, Adventist Health CFO John Beaman stands out in navigating the challenges posed by private equity firms and maintaining physician satisfaction.

His strategic approach sheds light on how his organization addresses these critical challenges.

Private Equity

Private equity firms have become major players in healthcare, often acquiring practices and facilities with the promise of streamlined operations and enhanced profitability. For nonprofit health systems like Adventist Health, this trend can pose a significant threat. These firms can offer attractive financial incentives to physicians, potentially drawing them away from organizations focused on patient care rather than profit margins.

So how does Beaman fight off private equity investors and compete with their tactics? Well, he doesn’t. Beaman stressed that private equity firms are only interested in primary care or pieces of the healthcare journey. His strategy involves proving to the surrounding community that his health system can be their trusted care provider.

“We've taken the strategy and approach that our value proposition is more the integration and connectedness of all pieces of health care,” Beaman said. “And [the community] sees us as someone that's their partner and empowering them and their health journey. And to me, that's where I see our differentiation is because we're able to connect those dots.”

That’s not to say, he clarifies, that a quick clinic or a certain technology that a private equity firm provides to give the community quick access to care isn’t helpful. He just doesn’t see the need to compete there.

“I think us trying to compete at that level is probably not in our best interest,” he said. “Our best interest will be more the holistic, integrated approach for the people in our communities.”

Retaining Physicians

A second tier to the challenge of private equity competition has to do with physicians. Often private equity firms are gunning for specialty care physician groups, and many health systems feel the need to implement physician attraction and retention strategies.

Beaman's advice here is to search for physicians that would be interested in your particular health system. What can your health system offer them?

“On the physician side, we've also become more intentional around recruiting physicians that want to work for a not-for-profit health system or want to be in some of our communities that are that are very rural,” Beaman said. “In fact, we have a rural residency program where we actually train physicians to be practitioners in a rural setting.”

Adventist Health, Beaman shares, has been able to retain about 75% of its physicians within their network/communities post-completion of their residency.

“I think those strategies are going to be the ones that pay off in the long term for us as a not-for-profit health system because it gets to finding people who want to be a part of our mission, who want to be in the areas that we serve,” he said.

Beaman said that this longevity is a characteristic that speaks to the community and underscores the strong presence of a trusted community provider.

“At the end of the day, I think that's better for the people in our communities because now they've got a partner that's, you know, we've been in many of our communities for over 100 years, and hopefully we'll be in them for another hundred.”