Consumer Confidence, Hospital Closures, and Key Industry Battles with Alan Condon

In this episode, Alan Condon, Editor-in-Chief at Becker’s Healthcare, joins Scott Becker to discuss how consumer confidence is affecting surgical volumes, a legal battle between HCA and AdventHealth in North Carolina, new CMS payment rules, and the alarming pace of hospital closures in 2025.

Episode Transcript

(00:00):
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This is Scott Becker with the Becker's
Healthcare Podcast. I am thrilled today to be

(00:42):
joined by brilliant editor in chief, Alan Condon.
And Alan Condon, Alan joins us regularly to
talk to us about a few of the
top stories that he's watching in health care.
Alan, let me tee it up and ask
you to take it away. What what are
a few of the top stories you're watching
currently?
Yeah. Great great feedback on you, Scott.
I think a couple of stories we're following
closely. And I think now that we've had

(01:03):
the q two results in the books and
the earnings calls from the executives at the
the large for profit systems, the HCA, CHS,
and at UHS.
I think one one key trend that was
brought up on multiple occasions on a couple
different earnings calls was how consumer confidence is
impacting or not impacting hospital volumes at somebody's

(01:25):
systems. So I think specifically
calling out HCA Healthcare
and Community Health Systems on this, they offered
contrasting
different interpretations
of how consumer confidence is shaping care utilization,
especially for
surgical procedures with high out of pocket costs.
So I think while both systems are monitoring

(01:47):
payer mix and volume trends,
HCA sees minimal impact from consumer confidence, whereas
CHS, on the other hand, sees it as
a pretty significant headwind.
So just kind of pulling out a couple
of trends, tips, and quotes from those earnings
calls.
CHS reported some some real softness in its
surgical volume,

(02:08):
particularly in orthopedics,
which executives said tied to declining consumer confidence
and tightened household budgets,
given the current economic climate.
Patients with high deductible
plans, larger co pays, especially those who maybe
exchange based coverage appear to be delaying or

(02:29):
maybe deferring some of that care, elective surgeries,
high acuity surgeries, particularly in orthopedics, as I
said,
according to CHS's CFO, Kevin Hammonds, who will
soon be taken on the CEO role at
CHS
when Tim Hingdon steps down.
I think despite some of the short term
pressure, CHS did remain optimistic that that consumer

(02:49):
demand, that consumer confidence
will return like it always does once those
economic conditions improve.
But but HCA and CHS did both really
align on that strategic investment and really system
readiness
will be critical to capturing that returning volume
once that consumer confidence,
does start to rebound. So HCA,

(03:11):
not seeing a a big impact on this,
but CHS really called it out on multiple
occasions,
in in terms of its declining volumes.
You know, and CHS is in some tougher
communities, I assume, both not so much that's
like urban, but more rural communities that are
really probably very Medicaid reliant,
where HCA is more diversified and probably doesn't
feel as much of that. It it feels
like is it a fair statement, or what
what's your

(03:33):
sense?
Interested to monitor
that context, those trends, monitoring that when we
see the the q two reports come out
of some of the nonprofit systems, fewer points,
some of those that might be operating in
more Medicaid heavy payer mixes, rural safety net
communities, wondering if they're also seeing similar trends

(03:55):
that CHS reported in some of those, dwindling
volumes as it relates to some of those
higher acuity care, such as orthopedics and whatnot.
Thank you very, very much, Alan.
Anything else you're watching closely in terms of
trends you're watching in health care currently? I
know you recently wrote a long piece about
recent
changes in CMS

(04:16):
payment, I think, 15 things to know, anything
specifically that
that sticks out to you.
I think, CMS payments I'll jump to that
in in one quick second. I think one
other story I wanted to call on just
in terms of while we're on the HCA
topic. I think we've been following this for
for quite a while, and it's been a
real back and forth,
push and pull in terms of competition,

(04:37):
growth,
in Western North Carolina. That's HCA Healthcare
and AdventHealth, big for profit system, push pull
against a big nonprofit system. AdventHealth, of course,
in multiple states as well.
But HCA and AdventHealth have been really this
kind of the turf war over the last
couple of years over
AdventHealth's

(04:57):
certificate of need approval to build a 67
bed hospital in Weaverville, North Carolina, I believe.
Huge,
area of growth,
population growth, economic growth.
Mission Health, of course, a big subsidiary of
HCA Healthcare
operates in that community and that market, has
been pushing back. And the the North Carolina

(05:17):
Supreme Court
just ruled in HCA's favor to essentially
put a halt on the bill the the
construction of an AdventHealth Hospital there.
Exciting with HCA again in this big push
pull battle against AdventHealth. Really trying to curtail
the nonprofit health system's growth in that area.

(05:38):
The latest the latest we have, it's a
big CON
CON decision essentially with the North Carolina Supreme
Court.
Whole put a hold of the AdventHealth expansion
while it reviews the CON, reviews the legal
proceedings here.
I just could could have potential wider ramifications,
not just for growth
CON disputes in that region, but potentially on

(05:59):
a regional basis.
More to come on what the definitive will
be. The hospital, they'd already broken ground. It's
it's been pulling along for quite some time.
That's been put a halt on while raw
proceedings move through the courts. But an interesting
quick little update there on on a story
that we've been following for quite some time,
Scott. But I think,
to to quickly jump

(06:21):
to CMS,
dropping some final rules, they recently released final
rules for for various
inpatient rehab inpatient rehab facilities, hospices,
psychiatric
facilities, the inpatient hospital hospital rule was also
released.
A number of shifts there across the board.
I think the major one is that just

(06:42):
small meager increases
for hospital payments.
I believe 2.6%
increase for inpatient hospitals in 2026.
The immediate reaction, that's unsurprisingly from American Hospital
Association, other national hospital lobbies, is that that
those those hospital payments,
given the current financial challenges that that hospitals

(07:03):
are seeing across the board, given the current
economic climate, and what we see in terms
of Medicaid cuts coming down the pipeline in
the next coming years. Unsurprisingly,
American Hospital Association hospitals pushing back against what
they see as really inadequate payment increases,
especially when you look at all the challenges
they're seeing on the payer side of things.
But I think that's the major trend that

(07:24):
we've seen for recent years,
I think, to be expected.
But, again, on on unsurprising reaction from the
American Hospital Association. That's kind of the major
takeaway from the inpatient hospital final rule, I
would say.
No. A 100%. Eowen, anything else you're following
closely that you want to share with us
today?
And and thank you very, very much.
I think the the last quick story I

(07:46):
would say is just one one more hospital
closure, unfortunately,
just over the weekend. That's,
St. Luke's Desperis Hospital in St. Louis, Missouri
officially closed August 1.
Again, I think that's another another hospital closure
in 2025. I believe that takes us up
to 19 for the year.

(08:06):
Many of those were independent hospitals. 12 health
systems
have closed hospitals so far this year. So
just, concerning trend when we look at some
of these communities, particularly those in more rural,
underserved communities,
but that's the latest hospital closure, unfortunately, in
in a series of hospital closures this year
that we've reported on.
And how does that look compared to years

(08:29):
past that number of hospital closures?
I believe I believe, if I'm not mistaken,
we've covered 2024.
I believe we saw 18 hospital closures, if
I'm not mistaken. So
we're around about the
as of August 2025, we've seen pretty much
the same number of hospital closures for the
entire year of last year. So,

(08:49):
if if, somebody's trends, somebody's challenges, layups, and
cuts that we're seeing across the board, it's
unfortunately, it might be likely that we may
see a a few more hospital closures this
year when we look at the landscape and
some of the challenges we continue to see
across the board.
Galen, thank you so much. Very alarming. Let's
hope it gets better. Thank you again for
joining us at the Becker South Gear podcast.

(09:10):
You're as good as they come. Thank you
very, very much. Thank you so much, Scott.