"How do we create that energy without the drama," says Inspira Health president and CEO Amy Mansue.
In this episode of HL Shorts, Inspira Health president and CEO Amy Mansue shares her perspective on how her role and the industry at large has changed since she took the reins of the South Jersey-based health system in 2020.
Reports forecast costs swelling, forcing hospitals to be proactive with their supply chain strategy.
Tariffs imposed by the Trump administration are expected to place additional financial pressure on hospitals and health systems, affecting supply chain expenses and procurement.
Providers that haven't planned for possible tariffs will have to act swiftly to mitigate rising costs, which have the potential to further restrict hospital margins.
On February 1, President Donald Trump signed executive orders implementing tariffs on imports coming from Canada, Mexico, and China. While the U.S. reached deals with both Canada and Mexico to delay the tariffs that were set at 25% for 30 days, a 10% tariff is currently in place on all imports from China.
In response, American Hospital Association president Rick Pollack penned a letter to the president asking that medical products and drugs be exempt from the tariffs.
"Despite ongoing efforts to build the domestic supply chain, the U.S. health care system relies significantly on international sources for many drugs and devices needed to both care for patients and protect our health care workers," Pollack wrote. "Tariffs, as well as any reaction of the countries on whom such tariffs are imposed, could reduce the availability of these life-saving medications and supplies in the U.S."
Multiple reports and surveys conducted ahead of the tariff implementations anticipated supply chain cost increases.
Vizient's analysis revealed that supply chain prices are expected to rise by 2.3% between July 1, 2025, to June 30, 2026. One import from China that will be significantly affected by the tariffs, the report noted, is enteral syringes. However, the effective date on tariffs on enteral syringes was pushed back to 2026, allowing providers additional time to diversify their manufacturers outside of China.
"These dynamics are part of the reason strategic forecasting should be a routine part of provider operations and not just an annual exercise-based budgeting cycle," Jeff King, research and intelligence director at Vizient, said in a statement.
A survey by Black Book Research, meanwhile, highlighted concerns among healthcare professionals, including hospital finance and supply chain executives, payers, patients, health market customers, pharmaceutical and medical equipment manufacturers, and physicians and ancillary practice administrators.
Of the 200 respondents, 164 predicted that costs for hospitals and health systems will jump by at least 15% in the next six months as a result of tariffs. Nearly seven out of 10 (69%) respondents estimated that pharmaceutical costs will increase by at least 10% due to the China tariff on active pharmaceutical ingredients. To offset higher costs, 27% of respondents reported that they are seeking domestic or alternative international suppliers.
The situation with tariffs imposed by the Trump administration remains fluid, but it's not as if it has caught the industry by surprise. In Premier's 2024 Supply Chain Resiliency survey, 80% of providers and 84% of suppliers anticipated supply chain challenges to worsen or remain the same this year, while 85% of suppliers expected regulatory policy changes to affect supply chain strategies.
In its recent earnings call, HCA Healthcare told investors it "has been working on tariff mitigation strategies for many years," including fixed price contracting, supply chain mapping, and risk assessment, CFO Mike Marks said.
In addition to locking in prices for 70% of supply spend for 2025, HCA has also been diversifying away from Chinese suppliers, according to Marks.
Two hospital leaders share what goes into determining if a merger or partnership is worth pursuing.
Hospital and health system CEOs can't reap the benefits of a well-executed merger or acquisition without first identifying the right opportunities for their organizations.
What goes into that assessment and decision-making process can vary, but understanding if you should pursue M&A and then pinpointing suitable partners are necessary steps for a successful integration strategy.
Here are three areas they highlighted for assessing if your organization is ready for dealmaking:
Build on care continuum
"The first thing we want is to make sure that it fits into our mission and our core," Banos said.
For San Antonio-based University Health, that mission revolves around managing the patient or the population through a complete continuum. When an opportunity comes up, Banos and the leadership team discuss how it would fit in one the three pillars of pre-acute, acute, and post-acute strategy.
An example of that is University Health looking at housing locations where they can keep patients in need of liver, lungs, or kidney transplants for a period while they're being assessed or post-transplant.
"We want to make sure that it helps us provide either a continuation of care or something that's a value-added service," Banos said.
Don't just bring in value, provide it
While CEOs ultimately pursue M&A to enrich their own organizations, knowing what you can bring to the table in a partnership is vital to landing a deal, according to Heywood.
Aspirus Health went through its own merger less than a year ago when the Wausau, Wisconsin-based health system combined with Duluth, Minnesota-based St. Luke's to form a 19-hospital entity.
"Before we partnered with St. Luke's, the question I asked the team was, 'What does Aspirus mean to you? What do you think makes Aspirus unique and what values do you think we can bring to another organization? And then we will go out and look at potential partners going forward based on that,'" Heywood said.
Aspirus was able to sell St. Luke's on its strength of being a rigorously structured integrated system, which allowed it to secure the merger and expand its presence into Minnesota, according to Heywood.
Aspirus continues to take that mindset as it seeks out other opportunities, asking what key attributes it's looking for and if it believes its own attributes can add to an organization.
"It helps us make decisions, but it also helps others when we're talking to them to see the value of partnering with us or choosing not to, depending on the value that they see and what we bring," Heywood said.
Recognize cultural fit
A deal can make all the sense in the world and look good on paper, but if it doesn't align from a cultural standpoint, then it's not worth putting pen to paper, both Banos and Heywood stated.
"Just buying something that provides a service but doesn't necessarily see the value of integrating within your organization would have a lot of disruption for us," Banos said. "So we're very, very careful when we look at a practice or look at an opportunity."
When looking at an opportunity that doesn't share similar vision or values, even if competing organizations may also be in pursuit, you have to be willing to say, 'no thanks' and move on.
"Even though we might need that service, it's just not a strategic fit from the culture of the organization," Banos said.
In the long run, that perspective, along with these other approaches to M&A, will lead you to a quality deal.
The agreement involves two of the 11 bargaining units taking part in healthcare strikes across Providence.
Providence Medical Group has struck a tentative agreement with two units represented by the Oregon Nurses Association (ONA) while thousands of other workers remain on strike.
The deal is for Portland-based Providence Women's Clinic, which is handing physicians and nurses first-ever contracts that improve areas like compensation, benefits, and working conditions.
A ratification vote on the agreement by union members began on Monday and closes on Tuesday.
Nearly 5,000 Providence doctors, nurses, advanced practice providers, and midwives at eight hospitals and six clinics run by Providence went on strike on January 10, making it the largest healthcare strike in Oregon's history, according to the ONA. Including the two units that Providence Women's Clinic reached a deal with, 11 bargaining units in total are participating in the strike.
Oregon Gov. Tina Kotek helped facilitate the agreement by requesting that Providence and the ONA resume mediation.
"This agreement marks a significant milestone in our commitment to providing exceptional healthcare services," Providence said in a statement.
The terms reached for nurses include a 25-step wage scale based on years of experience, providing a pay raise of 4% to 20% for most nurses. They'll also receive additional pay for evening shifts, precepting, and per diem work.
Meanwhile, physicians will receive raises of 7.5% to 15% for advanced practice providers, as well as protections for physician time and competitive incentives for extra work.
Though the agreement is a step in the right direction, Providence still has its work cut out to resolve the strike for all.
"Our members have made significant sacrifices to stand up for fair wages, safe staffing and the ability to provide quality care to their patients," Charlie Saltalamacchia, MD, said in a union release. "This agreement at Providence Women’s Clinic proves that solutions are within reach when Providence negotiates in good faith and prioritizes investment in their most valuable asset; their caregivers. The same commitment to fair bargaining must be extended to all remaining negotiations so that every caregiver can return to work with dignity and respect."
The previous two attempts by the financially troubled health system to sell Crozer fell apart.
Prospect Medical Holdings is hoping that the third time is the charm for its divestiture of Crozer Health.
The Los Angeles-based health system announced its plan to sell Crozer, including all hospitals, ambulatory surgery centers, clinics, and physician offices to a nonprofit consortium of healthcare operators.
Though the parties making up the consortium were not identified, Prospect stated that the proposed sale "will support the preservation and continuation of services to all members of the Delaware County."
Prospect also said in the announcement that it will work with the state of Pennsylvania to facilitate the move. State Sen. Tim Kearney, of Delaware County, toldWHYY News that details of the deal still have to be worked out and that he wants Prospect to fulfill its obligations to Crozer through its exit.
"By selling Crozer Health to a group of experienced healthcare operators, the communities in and around Delaware County will continue to access and receive the critical healthcare services they require," Tony Esposito, Crozer health CEO, said in a statement. "We appreciate the support of the Commonwealth of Pennsylvania, as well as all parties involved, to make this transition possible."
Four-hospital system Crozer is one of several divestitures Prospect is pursuing after filing for Chapter 11 bankruptcy last month.
Prospect first tried to offload Crozer to ChristianaCare Health System in 2022 before the deal fell through. It again tried to complete a sale with CHA Partners last year, but that proposal didn't reach the finish line either.
Elsewhere, Prospect is working to wrap up the sale of two Rhode Island hospitals, Roger Williams Medical Center and Our Lady of Fatima Hospital, to the Centurion Foundation.
Meanwhile, Prospect's deal with Yale New Haven Health for three Connecticut hospitals remains at an impasse with the sides embroiled in a lawsuit.
Prospect will seek bankruptcy court approval for the proposed sale of Crozer on February 6.
Supporting your staff in various ways is essential to solving challenges within the workforce, says one health system CEO.
Though healthcare is years removed from the pandemic, the industry's workforce continues to deal with residual effects that place immense pressure on hospital and health system staffs everywhere.
Amy Mansue, president and CEO of Inspira Health, shared with HealthLeaders three critical areas for executives to focus on to strengthen the workforce.
There's unpredictability around potential changes to programs and their impact, CEO Sam Hazen told investors.
As the Trump administration settles in, health systems are standing by to see how policy shifts could affect strategies for the rest of the year.
HCA Healthcare CEO Sam Hazen relayed some optimism, but also uncertainty, when asked by investors on a recent earnings call what the organization is anticipating for challenges around supply chain and public insurance programs.
The health system giant released its fourth quarter earnings, which reported $18.3 billion in revenue and $1.4 billion in net income. For comparison, HCA yielded $17.3 billion in revenue and $1.6 billion in net income over the same period in 2023.
The possibility of tariffs could put pressure on organizations' supply chain going forward, but HCA CFO Mike Marks stated that the system "has been working on tariff mitigation strategies for many years," including fixed price contracting, supply chain mapping, and risk assessment.
He noted that about 70% of HCA's supply spend for 2025 is contracted with firm pricing and that the system has diversified away from Chinese suppliers over the years.
"Like you, we are closely monitoring the announcements on tariffs from the new administration, including which countries are targeted, the rate of tariffs being implemented, and potential tariff exclusions for healthcare-related items," Marks said.
Hazen, meanwhile, highlighted the growth in exchange enrollment as a positive sign that the Trump administration will keep it around.
"We believe it's a positive outcome for families. It creates greater access to care. It improves outcomes," Hazen said. "So, all of that is a backdrop we think, politically, is a positive and presents an opportunity for the Trump administration, we believe, to sustain and ensure that families have coverage, they have affordability, and they have the opportunity to achieve positive outcomes for themselves and really for their family. So, we don't have any current insights into where this is going."
However, Hazen stated "it's too early for us to call anything" on the direction the administration will take enhanced Medicaid subsidies.
In terms of Medicaid supplemental payment programs for states, which could be nixed under Trump, HCA is still awaiting payments in Tennessee, with a wide range of estimation affecting 2025 guidance.
"When we consider all the various programs, noting the complexity and the variability and the moving parts, we are projecting and estimating that our net effect of supplemental payment programs will range between flat to 2024 to upwards of a $250 million headwind," Marks said.
The proposed $1 billion partnership aims to address healthcare challenges in Minnesota, the organizations announced.
A new integrated care model could be on the way in Minnesota.
Essentia Health and the University of Minnesota announcedthat they're working to create a nonprofit "all-Minnesota health system solution" that would receive $1 billion over five years to improve rural healthcare, increase access to specialty care, and reinvest in the university's medical facilities.
The organizations, which have yet to sign a formal agreement, didn't reveal if the proposed partnership is a merger or includes integration.
What the framework will do, according to the announcement, is provide more career and education opportunities for healthcare professionals, decrease clinical costs, allow for more innovative models, and advance technology across a large health system.
"This is the beginning of an exciting, ambitious — and critically needed — conversation about the future of care in our state,” Essentia Health CEO David Herman said in a statement. “Essentia Health has a long and committed partnership with the University of Minnesota. With nearly 70 percent of all Minnesota physicians having been trained at the University, we know that continuing to deliver excellent patient outcomes while building a sustainable healthcare future rests on the foundation of a strong medical school. These are key reasons why Essentia leadership has begun exploring opportunities to build a new framework for healthcare in Minnesota.”
The proposed partnership could also affect the University of Minnesota's relationship with Fairview Health Services.
The two sides signed a letter of intent last February for the university to buy back the University of Minnesota Medical Center from Fairview, along with renegotiating their affiliation as M Health Fairview, which was formed in 2018 and set to expire at the end of 2026.
An agreement, however, was not reached by the September deadline, putting their connection up in the air.
"We are at an inflection point in our relationship with Fairview Health Services that requires an urgent and innovative solution," University of Minnesota president Rebecca Cunningham said in the announcement with Essentia. "We envision this model as a new path forward in our relationship, one that builds on the momentum all those at M Health Fairview have built and that continues to put patients first, consistent with our organizations’ shared priorities. We have begun conversations and invite further discussion with Fairview to bring this concept to life for Minnesota."
On its end, Fairview said it became aware of the university's plans with Essentia shortly before the announcement and didn't receive details on the partnership.
"Over the last year, we have worked in good faith towards the university’s desire to purchase the academic assets," a Fairview spokesperson said in a statement. "Today's announcement by the university reflects a sudden change in their stated desire."
Essentia Health, meanwhile, is a year removed from calling off its merger with Marshfield Clinical Health System after the organizations agreed to form a 25-hopsital system in July 2023.
Minnesota Attorney General Keith Ellison, who reviewed the deal for compliance with state and federal antitrust laws, would also investigate a union between Essentia and the University of Minnesota.
Working with federal or state funded institutions is one way health systems can make the most of government influence, says Amy Mansue.
Regardless of size or stature, hospitals and health systems often improve their ability to tackle their biggest challenges and serve their community when they form local partnerships.
That strategy has benefited South Jersey-based Inspira Health, which has utilized those connections to strengthen its workforce and increase access to care for patients.
Some of Inspira's partnerships are with government-backed institutions, allowing the system to leverage government reach that's unlikely to be affected by potential policy changes as administrations turn over.
"The truth of the matter is that no one entity, no one hospital is going to be able to solve the healthcare issues of our communities alone," Inspira president and CEO Amy Mansue told HealthLeaders.
Mansue, who has been at the helm of Inspira since August 2020, believes provider organizations should understand how they can partner with federally qualified health centers (FQHC), for example. These federally funded nonprofit centers or clinics serve medically underserved areas, providing primary care services on a sliding fee scale.
For Inspira, the collaboration with public institutions Rowan University and Rowan College of South Jersey (RCSJ) has been particularly fruitful. The trio partnered to create the Pathway to Nursing program in 2023, which enables Inspira employees to have their fourth-year tuition at Rowan University paid in full by the system after they complete their first three years at RCSJ. Additionally, Inspira employees have received a 50% discount on tuition and fees for RCSJ's degree and certificate programs since 2022.
"We've done a lot of work with our local county college, trying to make sure that our staff have the ability to go back to school for free, encouraging that education component part of their career trajectory with us," Mansue said. "All of that helps our local community as well as helps each of us."
Inspira has also fostered a relationship with its academic partner, Cooper University Health Care. The pair formed Cooper and Inspira Neuroscience and Cooper and Inspira Cardiac Care to enhance local access to care in those two specialties.
According to Mansue, that commitment is significant for bringing physicians to Inspira's community.
"Part of that opportunity is just trying to keep things close to home," she said. "The less [the doctors] have to travel to the academic center, the better, and for the academic center, it works out great because they keep the high CMMI and then we have the ability to do new procedures at our facilities close to home that we otherwise wouldn't have had the opportunity to have."
Pictured: Amy Mansue, president and CEO, Inspira Health.
While these types of partnerships can provide health systems with some stability, a new presidential administration, on the other hand, can bring plenty of unpredictability.
Even in the case of President Trump serving a second, nonconsecutive term, Mansue doesn't think there's much leaders can take away from his first stint in office to prepare them for the coming four years.
Not only was a good chunk of his time spent on the pandemic, skewing his approach to healthcare policies, but his current administration also features new faces, bringing their own set of beliefs, Mansue highlighted.
Hospital and health system CEOs may not know how the government will act going forward, but keeping an open mind is how Inspira's guiding hand is operating.
"Obviously, every time a new administration comes in, they bring in new ideas, new opportunities," she said. "We are willing and really excited about the chance to work with new folks. At the end of the day, the federal government makes up about 39% of the spend of our national healthcare expenditures and so with all these new ideas, there's still the running of that operation, which is a huge responsibility.
"We all will step forward and partner with them in any way we can. We all understand that the economic pressure on healthcare costs are continuing, so I think we would continue to work with this new administration to think about new ideas and figure out how to create those opportunities for all of us to become more efficient."
Understanding the context in which hospitals and health systems are operating in is crucial for effective dealmaking.
In this episode of HL Shorts, Aspirus Health president and CEO Matthew Heywood provides insight on the changing economic landscape and its impact on the approach to hospital M&A.
