July 15, 2025 • 18 mins
Kris Blohm, Managing Director, Practice Co-Leader, Mergers & Acquisitions, Kaufman Hall, and Courtney Midanek, Managing Director, Practice Co-Leader, Mergers & Acquisitions, Kaufman Hall, discuss the rapid acceleration of major business unit or "operating portfolio" moves within health care organizations that are navigating the complexities of specialized areas such as home health, skilled nursing, DME, outreach labs, and behavioral health. They cover how legal, financial, and operational teams must collaborate strategically to ensure successful outcomes. Sponsored by Kaufman Hall, a Vizient company.
Watch this episode: https://www.youtube.com/watch?v=93bS4EY3Np0
Learn more about Kaufman Hall: https://www.kaufmanhall.com/
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
SPEAKER_00 (00:00):
This episode of AHLA's Speaking of Health Law is
sponsored by Kauffman Hall, aVizient company.
For more information, visitKauffmanHall.com.
SPEAKER_01 (00:17):
Thanks for joining today.
I'm Courtney Medanek, theco-lead of the merger and
acquisition practice at KauffmanHall.
SPEAKER_02 (00:23):
And I'm Chris Blum.
other co-lead of the mergers andacquisitions practice at
Kauffman Hall of his inkcompany.
Today, we're here to talk to youabout different ways in which
health systems and healthcareorganizations can think through
their portfolio of business andservice lines.
(00:43):
And one of the interestingdynamics that we're seeing, and
Courtney would love to have yourperspective on this, is that the
operating environment for healthsystems and healthcare providers
has stabilized, but it hasn'treally rebounded to the desires
(01:04):
and needs of these organizationsvis-a-vis margin improvement and
accretion.
That's putting some prettymeaningful constraints on these
types of organizations.
I know I'm seeing a lot ofinterest in portfolio review and
rationalization.
What are you seeing in themarket and how are some of your
and our clients thinking throughhow they evaluate, whether to
(01:28):
partner, whether to review,whether to divest.
SPEAKER_01 (01:33):
Yeah, I think the first thing that I would say is
that our point of view is thatyou really should be thinking
about a portfolio reviewholistically and across all sort
of your business units andaccess points and offerings
rather than doing it in avacuum.
We're coming off this five-yearperiod, or maybe it's five-year
(01:54):
plus, I guess, at this point, aperiod of disruption and strong
headwinds.
And so it can be tempting to...
just sort of react to the latesttrend or big splashy
announcement that you happen tosee and say, oh, we should look
at this business unit or weshould look at this other one.
But all of these pieces reallysort of fit together.
(02:16):
And so again, we really feellike best practices, if
bandwidth and resources permitto assess all of this
holistically, this is anenvironment that's constantly
evolving.
And so it's gonna be a littlebit iterative, right?
So, for example, you might havean inpatient facility or
(02:36):
facilities that's sort ofbursting at the seams.
And so the natural inclinationis we need more inpatient
capacity.
But if you're thinking acrossthe continuum and looking at,
you know, maybe ASC or otherambulatory strategies or home
health, you may make differentdecisions.
Right.
And so, you know, our sort offirst thought is or my first
(02:57):
thought today is, you know, tothink about all of this together
rather than on a one off or adhoc basis.
And then drilling down one leveldeeper, you know, is sort of the
assessment itself.
Right.
And so, as you might expect,that starts with a drill down on
the performance of thesebusiness units.
And we really caution customers.
(03:18):
a fresh set of eyes on theseanalyses.
We see health systems, sometimesvery large, very sophisticated
organizations that actuallydon't have a line of sight on
how these business units areperforming or may have an
outdated view of that.
We've got leaders of thesebusiness units or service lines
(03:39):
or others that may have alwaysthought that XYZ area is very
profitable and adding a lot tothe bottom line.
but it really requires a deepdive and a data-driven type of
process to really take a look atthat.
And that's really only the firststep, right?
(04:00):
We have to look at the marketdynamics, headwinds and
tailwinds of all of these partsand pieces.
And of course, all within thecontext of you know, capital
constraints and resourceconstraints.
If only we had unlimited capitaland resources and we could do
everything and be all things toall people, but that's just not
(04:22):
the environment that we're inright now.
And so, you know, again, kind oftaking that holistic approach,
you know, is really kind ofwhere I would start here.
And so maybe to that end, Chris,You know, have you seen
situations or how do you thinkabout making sure that this
(04:43):
isn't a siloed approach, butrather something that is
comprehensive of a lot ofdifferent disciplines?
SPEAKER_02 (04:50):
Well, it starts, I think, where you started,
Courtney, an assessment ofwhether or not a particular
business meets an organization'slong-term goals and objectives.
Whether that be clinical,business, community, all of the
above.
And then it really also from anexecution standpoint starts with
(05:11):
leadership.
I think you said holisticapproach.
It needs to be holistic withleadership as well.
So that's not only the C-suite,although it starts with the
C-suite, it involves the boardas well and the various subject
matter experts, whether they befinancial, organizational,
legal.
It really just begins there.
(05:33):
It begins with a sharedstrategic vision of what the
organization is trying toaccomplish and supported by some
level of plan.
Now, as you know, we wouldadvocate for a formal plan on
paper, not something anecdotalor philosophical, but something
on paper, define goals andobjectives and constraints, a
(05:57):
statement of purpose for thetransformation.
Again, whether it be clinical orbusiness or financial, And then
I think a hard look at whatcapabilities and constraints an
organization has in reachingthose goals overall.
And then with respect toexecution, just good
communication and transparencybetween the management team.
(06:20):
A CFO can't do this alone, a CEOcan't do this alone, a CMO can't
do this alone.
We need to consider legal andregulatory constraints, of
course, certainly if you'rethinking about partnerships, So
really it begins and I thinkends with management and
accountability and really amindset that change is important
(06:46):
and it's important to evaluate.
And sometimes that means makinghard decisions about certain
business lines.
Sometimes it means really havinga vision to invest in certain
business lines, both sides ofthe coin.
SPEAKER_01 (07:00):
Yeah, no, I totally agree.
And I feel like, you know, we'reseeing more and more examples of
this and some of our healthsystem clients thinking about
how to approach some of thesequestions.
And you may be listening toChris's and my comments and
thinking, you know, they'retalking about this holistic
approach and bringing all thesepeople in.
(07:21):
Are they envisioning like dozensand dozens of people attacking
this problem?
I mean, I think it's really abalance, right?
I think I may have mentionedearlier, I had a colleague years
ago who said, you know, whenasked, how big of a team are we
talking about here?
And he said, you know, it shouldbe a team that's, you know,
(07:42):
certainly robust enough to covereverything you need, but they
should be able to like share apizza.
I mean, we're not talking about,you know, a whole army of folks.
And it's a balance, right?
Because, you know, we need tohave all of the the appropriate
inputs, but at the end of theday, have an executive sponsor
that sort of calls the shot.
(08:02):
And one example that I know I'veseen a lot recently, we've seen
a lot of outreach lab deals.
And I think it's a good exampleof drawing from many different
disciplines.
And it's a very iterative typeof approach, kind of like the
example you just gave, Chris,like a CFO can't do one of these
transactions from beginning toend, right?
(08:23):
And so what we'll see is, MaybeI'll start there.
From a financial point of view,often in transactions like that,
we're weighing upfrontmonetization proceeds with what
we're giving up in terms ofincremental cash flow.
But then we're also taking intoconsideration clinical and
operational impact.
So in an outreach labtransaction, we're, you know,
(08:46):
considering, you know, makingsure that we are still supported
from a continuity of careperspective.
We still need testingcapabilities in our communities
And so if we're asking forcertain commitments in a
transaction to support theclinical and operational needs,
and those transactions oftenit's draw sites or things like
that, how does that impact themonetary proceeds in the
(09:08):
analysis I just mentioned?
And then how do we package allof that up in the transaction
itself, which we provideinsights on, but our legal side
colleagues, you know, reallywrap around all of that and
provide support, not only onsome of the regulatory issues
that pop up in transactions likethat, but also how we think
(09:28):
about the commitments and how wethink about what happens if
those commitments aren't met.
So it's really a pretty holisticprocess.
SPEAKER_02 (09:38):
Yeah.
And I want to double click, Ithink, on something you said,
Courtney, which I think ispretty unique to healthcare.
You mentioned the health systemin this case, still needing
access to the business.
And I think that's something,again, really unique to
healthcare.
Your partnership, and even insome cases, divestiture, doesn't
(10:00):
mean that you let go of thebusiness or asset entirely and
never see it again, which Ithink makes our jobs more
interesting, and certainly fromthe legal side more interesting,
because there's a structuringelement here that doesn't end
with buy, sell, but has a wholehost of other commitments and
considerations that keep the twoentities, buyer, seller,
(10:24):
partner, together becausethere's a necessity to do so
down the line.
And that's incumbent in lab,that's incumbent in post-acute,
that's incumbent in medicalproducts, ambulatory,
multi-site, anything andeverything you can think of in
terms of care delivery.
needs to still occur and it'sstill going to occur the
(10:46):
community and the service area.
So it just doesn't disappear atthe end of the deal.
I think that's something reallyunique.
And again, also complex relativeto doing these types of or
evaluating these types ofpartnerships.
SPEAKER_01 (11:00):
Yeah, I totally agree.
And I think it actually speaksto the evolution of these
transactions and transactionterms, too.
I think, you know, A lot ofexecutives that we had talked to
maybe 10 or 15 years ago feltlike it was sort of this binary.
If I own it, I have access to itand I sort of don't need to
(11:20):
worry about that.
If I don't, then I'm reallytotally vulnerable.
And it doesn't mean that there'sno vulnerability, but I think
that we have...
found creative structuralapproaches through these
contractual arrangements andthat there would be some kind of
a linkage and partnership goingforward.
It might not look the same.
It might mean that we eitherdon't own it at all or we own a
(11:43):
minority part of it, but thereare creative ways that I think
we've found to continue to makesure you can tap into that
continuity of care withoutowning everything 100%.
Right,
SPEAKER_02 (11:57):
right.
SPEAKER_01 (11:58):
Yeah.
You mentioned, Chris, earlierthe mindset of some of the
executives.
What are some of the things thatyou've seen in terms of an
important mindset when embarkingon a journey like this?
SPEAKER_02 (12:13):
Well, yeah, this is going to sound cliche, but it's
to not fear change and to do acontinuous, I'd say, evaluation
of one's business and one'sportfolio.
rather than look at it as aone-time transformational event.
There could be a whole host ofvarious initiatives, including
(12:34):
partnerships that are part of alarger plan.
And I know that that soundsdaunting because where do you
start and where do youprioritize?
And I think it goes back to whatyou began with, Courtney, which
is take a look at the entirepicture, look at the goals and
objectives of the businessoverall, and start to do an
operational or even strategicslash operational assessment of
(12:58):
each of the portfolio pieces onwhether they help an
organization ultimately meetthat goal.
And that, again, could befinancial, operational,
clinical, or otherwise.
But it's to not fear change.
It's to constantly look at theoptimal mix of the business.
It's be willing to make hardchoices about legacy businesses
(13:21):
and assets that have been partof the fabric of the
organization for a long time ormaybe forever.
And it sounds, I think, again,counterintuitive because
healthcare providers are in theimportant business of delivering
care and you wanna be able to dothat, but there's also a
business component to it.
Not be afraid to rent versus ownin some cases, an organization,
(13:50):
may find that one of itsimportant service lines that
could very well be core but notthrive in its current state may
thrive with a partner or withsome other construct.
And I think that's an importantdecision to make.
And really just continually mapyour portfolio against your
broader strategy.
(14:11):
So it sounds intuitive when youtalk about it, but I think
putting it in practice issomething that is a lot harder
to, taking that first step andbeing organized about it, right?
SPEAKER_01 (14:24):
Totally.
I was at a client a couple ofweeks ago and we were having
this conversation and talkingabout, and one person said,
well, we have to think aboutlike, what are our sacred cows?
And someone else said, in thisenvironment, we have to
eliminate that mindsetaltogether.
There can't be sacred cowsanymore.
We have to put it all on thetable and then we assess it,
(14:47):
right?
And we think about our goals andobjectives and our constraints
and we do that in a holisticfashion, inclusive of our
mission, but we have to havethat open mindset on the front
end, right?
Easy for us to say.
SPEAKER_02 (15:02):
Yeah, yeah.
And you can't, You can't, orit's at least very hard to
evaluate those sacred cowsunless you really put some, I'd
say empirical rigor behind it,right?
First and foremost, what's thefinancial performance of the
sacred cow or the service line?
(15:23):
What's the growth opportunity?
What's the market opportunity?
What are your resourcerealities?
When you start to do thatanalysis, and it's hard work,
once you start to do thatanalysis, That should give you
the answer.
If everything checks out, thenit's pretty straightforward.
There's a potential to invest.
If two, three, or four more ofyour major priorities and
(15:47):
checklists don't check out, thenyou kind of have the answer to a
pretty hard question.
Yeah, and we're seeing so manyimportant service lines, like
physician constructs, forinstance, where certain pockets
of ambulatory just be dilutedfrom a financial perspective in
the market for no other reasonthan the market forces or payer
(16:10):
forces are headwinds againstthem, having nothing to do with
the organization or even thepeople.
And that's just a market realitythat some of our clients need to
accept.
And the good news is there areresources to help them do that.
SPEAKER_01 (16:28):
Definitely, definitely.
Well, I think we covered a lotof ground.
What did we miss here?
I
SPEAKER_02 (16:35):
don't think we missed anything.
We went through the importanceof being both open and pragmatic
about an organization'sresources and constraints and
being really deliberate aboutlooking at a portfolio
holistically and evaluating oroperationally assessing
(16:55):
portfolio components.
We talked about some of themetrics and some of the
mechanisms to do that.
And I think we talked about someof the constraints or roadblocks
in doing that.
I just maybe close and say, atKauffman Hall, we really do
(17:18):
pride ourselves on this holisticapproach.
Our M&A practice, for instance,helps organizations evaluate how
partnerships as an inorganicgrowth and optimization strategy
can help an organization meetits objectives.
We understand that eachorganization is unique, so
(17:40):
requires a customized approachand we pride ourselves on being
able to deliver that approach toour clients.
SPEAKER_01 (17:50):
Terrific.
Well, we appreciate everybody'stime and joining the podcast
today.
SPEAKER_02 (17:56):
Thanks, everyone.
SPEAKER_00 (18:03):
Thank you.
(18:33):
you
This episode of AHLA's Speaking of Health Law is
sponsored by Kauffman Hall, aVizient company.
For more information, visitKauffmanHall.com.
SPEAKER_01 (00:17):
Thanks for joining today.
I'm Courtney Medanek, theco-lead of the merger and
acquisition practice at KauffmanHall.
SPEAKER_02 (00:23):
And I'm Chris Blum.
other co-lead of the mergers andacquisitions practice at
Kauffman Hall of his inkcompany.
Today, we're here to talk to youabout different ways in which
health systems and healthcareorganizations can think through
their portfolio of business andservice lines.
(00:43):
And one of the interestingdynamics that we're seeing, and
Courtney would love to have yourperspective on this, is that the
operating environment for healthsystems and healthcare providers
has stabilized, but it hasn'treally rebounded to the desires
(01:04):
and needs of these organizationsvis-a-vis margin improvement and
accretion.
That's putting some prettymeaningful constraints on these
types of organizations.
I know I'm seeing a lot ofinterest in portfolio review and
rationalization.
What are you seeing in themarket and how are some of your
and our clients thinking throughhow they evaluate, whether to
(01:28):
partner, whether to review,whether to divest.
SPEAKER_01 (01:33):
Yeah, I think the first thing that I would say is
that our point of view is thatyou really should be thinking
about a portfolio reviewholistically and across all sort
of your business units andaccess points and offerings
rather than doing it in avacuum.
We're coming off this five-yearperiod, or maybe it's five-year
(01:54):
plus, I guess, at this point, aperiod of disruption and strong
headwinds.
And so it can be tempting to...
just sort of react to the latesttrend or big splashy
announcement that you happen tosee and say, oh, we should look
at this business unit or weshould look at this other one.
But all of these pieces reallysort of fit together.
(02:16):
And so again, we really feellike best practices, if
bandwidth and resources permitto assess all of this
holistically, this is anenvironment that's constantly
evolving.
And so it's gonna be a littlebit iterative, right?
So, for example, you might havean inpatient facility or
(02:36):
facilities that's sort ofbursting at the seams.
And so the natural inclinationis we need more inpatient
capacity.
But if you're thinking acrossthe continuum and looking at,
you know, maybe ASC or otherambulatory strategies or home
health, you may make differentdecisions.
Right.
And so, you know, our sort offirst thought is or my first
(02:57):
thought today is, you know, tothink about all of this together
rather than on a one off or adhoc basis.
And then drilling down one leveldeeper, you know, is sort of the
assessment itself.
Right.
And so, as you might expect,that starts with a drill down on
the performance of thesebusiness units.
And we really caution customers.
(03:18):
a fresh set of eyes on theseanalyses.
We see health systems, sometimesvery large, very sophisticated
organizations that actuallydon't have a line of sight on
how these business units areperforming or may have an
outdated view of that.
We've got leaders of thesebusiness units or service lines
(03:39):
or others that may have alwaysthought that XYZ area is very
profitable and adding a lot tothe bottom line.
but it really requires a deepdive and a data-driven type of
process to really take a look atthat.
And that's really only the firststep, right?
(04:00):
We have to look at the marketdynamics, headwinds and
tailwinds of all of these partsand pieces.
And of course, all within thecontext of you know, capital
constraints and resourceconstraints.
If only we had unlimited capitaland resources and we could do
everything and be all things toall people, but that's just not
(04:22):
the environment that we're inright now.
And so, you know, again, kind oftaking that holistic approach,
you know, is really kind ofwhere I would start here.
And so maybe to that end, Chris,You know, have you seen
situations or how do you thinkabout making sure that this
(04:43):
isn't a siloed approach, butrather something that is
comprehensive of a lot ofdifferent disciplines?
SPEAKER_02 (04:50):
Well, it starts, I think, where you started,
Courtney, an assessment ofwhether or not a particular
business meets an organization'slong-term goals and objectives.
Whether that be clinical,business, community, all of the
above.
And then it really also from anexecution standpoint starts with
(05:11):
leadership.
I think you said holisticapproach.
It needs to be holistic withleadership as well.
So that's not only the C-suite,although it starts with the
C-suite, it involves the boardas well and the various subject
matter experts, whether they befinancial, organizational,
legal.
It really just begins there.
(05:33):
It begins with a sharedstrategic vision of what the
organization is trying toaccomplish and supported by some
level of plan.
Now, as you know, we wouldadvocate for a formal plan on
paper, not something anecdotalor philosophical, but something
on paper, define goals andobjectives and constraints, a
(05:57):
statement of purpose for thetransformation.
Again, whether it be clinical orbusiness or financial, And then
I think a hard look at whatcapabilities and constraints an
organization has in reachingthose goals overall.
And then with respect toexecution, just good
communication and transparencybetween the management team.
(06:20):
A CFO can't do this alone, a CEOcan't do this alone, a CMO can't
do this alone.
We need to consider legal andregulatory constraints, of
course, certainly if you'rethinking about partnerships, So
really it begins and I thinkends with management and
accountability and really amindset that change is important
(06:46):
and it's important to evaluate.
And sometimes that means makinghard decisions about certain
business lines.
Sometimes it means really havinga vision to invest in certain
business lines, both sides ofthe coin.
SPEAKER_01 (07:00):
Yeah, no, I totally agree.
And I feel like, you know, we'reseeing more and more examples of
this and some of our healthsystem clients thinking about
how to approach some of thesequestions.
And you may be listening toChris's and my comments and
thinking, you know, they'retalking about this holistic
approach and bringing all thesepeople in.
(07:21):
Are they envisioning like dozensand dozens of people attacking
this problem?
I mean, I think it's really abalance, right?
I think I may have mentionedearlier, I had a colleague years
ago who said, you know, whenasked, how big of a team are we
talking about here?
And he said, you know, it shouldbe a team that's, you know,
(07:42):
certainly robust enough to covereverything you need, but they
should be able to like share apizza.
I mean, we're not talking about,you know, a whole army of folks.
And it's a balance, right?
Because, you know, we need tohave all of the the appropriate
inputs, but at the end of theday, have an executive sponsor
that sort of calls the shot.
(08:02):
And one example that I know I'veseen a lot recently, we've seen
a lot of outreach lab deals.
And I think it's a good exampleof drawing from many different
disciplines.
And it's a very iterative typeof approach, kind of like the
example you just gave, Chris,like a CFO can't do one of these
transactions from beginning toend, right?
(08:23):
And so what we'll see is, MaybeI'll start there.
From a financial point of view,often in transactions like that,
we're weighing upfrontmonetization proceeds with what
we're giving up in terms ofincremental cash flow.
But then we're also taking intoconsideration clinical and
operational impact.
So in an outreach labtransaction, we're, you know,
(08:46):
considering, you know, makingsure that we are still supported
from a continuity of careperspective.
We still need testingcapabilities in our communities
And so if we're asking forcertain commitments in a
transaction to support theclinical and operational needs,
and those transactions oftenit's draw sites or things like
that, how does that impact themonetary proceeds in the
(09:08):
analysis I just mentioned?
And then how do we package allof that up in the transaction
itself, which we provideinsights on, but our legal side
colleagues, you know, reallywrap around all of that and
provide support, not only onsome of the regulatory issues
that pop up in transactions likethat, but also how we think
(09:28):
about the commitments and how wethink about what happens if
those commitments aren't met.
So it's really a pretty holisticprocess.
SPEAKER_02 (09:38):
Yeah.
And I want to double click, Ithink, on something you said,
Courtney, which I think ispretty unique to healthcare.
You mentioned the health systemin this case, still needing
access to the business.
And I think that's something,again, really unique to
healthcare.
Your partnership, and even insome cases, divestiture, doesn't
(10:00):
mean that you let go of thebusiness or asset entirely and
never see it again, which Ithink makes our jobs more
interesting, and certainly fromthe legal side more interesting,
because there's a structuringelement here that doesn't end
with buy, sell, but has a wholehost of other commitments and
considerations that keep the twoentities, buyer, seller,
(10:24):
partner, together becausethere's a necessity to do so
down the line.
And that's incumbent in lab,that's incumbent in post-acute,
that's incumbent in medicalproducts, ambulatory,
multi-site, anything andeverything you can think of in
terms of care delivery.
needs to still occur and it'sstill going to occur the
(10:46):
community and the service area.
So it just doesn't disappear atthe end of the deal.
I think that's something reallyunique.
And again, also complex relativeto doing these types of or
evaluating these types ofpartnerships.
SPEAKER_01 (11:00):
Yeah, I totally agree.
And I think it actually speaksto the evolution of these
transactions and transactionterms, too.
I think, you know, A lot ofexecutives that we had talked to
maybe 10 or 15 years ago feltlike it was sort of this binary.
If I own it, I have access to itand I sort of don't need to
(11:20):
worry about that.
If I don't, then I'm reallytotally vulnerable.
And it doesn't mean that there'sno vulnerability, but I think
that we have...
found creative structuralapproaches through these
contractual arrangements andthat there would be some kind of
a linkage and partnership goingforward.
It might not look the same.
It might mean that we eitherdon't own it at all or we own a
(11:43):
minority part of it, but thereare creative ways that I think
we've found to continue to makesure you can tap into that
continuity of care withoutowning everything 100%.
Right,
SPEAKER_02 (11:57):
right.
SPEAKER_01 (11:58):
Yeah.
You mentioned, Chris, earlierthe mindset of some of the
executives.
What are some of the things thatyou've seen in terms of an
important mindset when embarkingon a journey like this?
SPEAKER_02 (12:13):
Well, yeah, this is going to sound cliche, but it's
to not fear change and to do acontinuous, I'd say, evaluation
of one's business and one'sportfolio.
rather than look at it as aone-time transformational event.
There could be a whole host ofvarious initiatives, including
(12:34):
partnerships that are part of alarger plan.
And I know that that soundsdaunting because where do you
start and where do youprioritize?
And I think it goes back to whatyou began with, Courtney, which
is take a look at the entirepicture, look at the goals and
objectives of the businessoverall, and start to do an
operational or even strategicslash operational assessment of
(12:58):
each of the portfolio pieces onwhether they help an
organization ultimately meetthat goal.
And that, again, could befinancial, operational,
clinical, or otherwise.
But it's to not fear change.
It's to constantly look at theoptimal mix of the business.
It's be willing to make hardchoices about legacy businesses
(13:21):
and assets that have been partof the fabric of the
organization for a long time ormaybe forever.
And it sounds, I think, again,counterintuitive because
healthcare providers are in theimportant business of delivering
care and you wanna be able to dothat, but there's also a
business component to it.
Not be afraid to rent versus ownin some cases, an organization,
(13:50):
may find that one of itsimportant service lines that
could very well be core but notthrive in its current state may
thrive with a partner or withsome other construct.
And I think that's an importantdecision to make.
And really just continually mapyour portfolio against your
broader strategy.
(14:11):
So it sounds intuitive when youtalk about it, but I think
putting it in practice issomething that is a lot harder
to, taking that first step andbeing organized about it, right?
SPEAKER_01 (14:24):
Totally.
I was at a client a couple ofweeks ago and we were having
this conversation and talkingabout, and one person said,
well, we have to think aboutlike, what are our sacred cows?
And someone else said, in thisenvironment, we have to
eliminate that mindsetaltogether.
There can't be sacred cowsanymore.
We have to put it all on thetable and then we assess it,
(14:47):
right?
And we think about our goals andobjectives and our constraints
and we do that in a holisticfashion, inclusive of our
mission, but we have to havethat open mindset on the front
end, right?
Easy for us to say.
SPEAKER_02 (15:02):
Yeah, yeah.
And you can't, You can't, orit's at least very hard to
evaluate those sacred cowsunless you really put some, I'd
say empirical rigor behind it,right?
First and foremost, what's thefinancial performance of the
sacred cow or the service line?
(15:23):
What's the growth opportunity?
What's the market opportunity?
What are your resourcerealities?
When you start to do thatanalysis, and it's hard work,
once you start to do thatanalysis, That should give you
the answer.
If everything checks out, thenit's pretty straightforward.
There's a potential to invest.
If two, three, or four more ofyour major priorities and
(15:47):
checklists don't check out, thenyou kind of have the answer to a
pretty hard question.
Yeah, and we're seeing so manyimportant service lines, like
physician constructs, forinstance, where certain pockets
of ambulatory just be dilutedfrom a financial perspective in
the market for no other reasonthan the market forces or payer
(16:10):
forces are headwinds againstthem, having nothing to do with
the organization or even thepeople.
And that's just a market realitythat some of our clients need to
accept.
And the good news is there areresources to help them do that.
SPEAKER_01 (16:28):
Definitely, definitely.
Well, I think we covered a lotof ground.
What did we miss here?
I
SPEAKER_02 (16:35):
don't think we missed anything.
We went through the importanceof being both open and pragmatic
about an organization'sresources and constraints and
being really deliberate aboutlooking at a portfolio
holistically and evaluating oroperationally assessing
(16:55):
portfolio components.
We talked about some of themetrics and some of the
mechanisms to do that.
And I think we talked about someof the constraints or roadblocks
in doing that.
I just maybe close and say, atKauffman Hall, we really do
(17:18):
pride ourselves on this holisticapproach.
Our M&A practice, for instance,helps organizations evaluate how
partnerships as an inorganicgrowth and optimization strategy
can help an organization meetits objectives.
We understand that eachorganization is unique, so
(17:40):
requires a customized approachand we pride ourselves on being
able to deliver that approach toour clients.
SPEAKER_01 (17:50):
Terrific.
Well, we appreciate everybody'stime and joining the podcast
today.
SPEAKER_02 (17:56):
Thanks, everyone.
SPEAKER_00 (18:03):
Thank you.
(18:33):
you
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