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Important Disclosure. I have no financial interest, long or short, in Tenet, CommonSpirit, or any other company mentioned here. This article is journalism and opinion, not investment advice.
🚨 First, an announcement.
🎙️ Calling all medical professionals, healthtech folks, and fans of our podcast, Digital Health Inside Out. Alex Koshykov and I are looking for a few brave souls willing to join us for in-person conversations that may range from serious healthcare debates to completely inappropriate healthtech dad jokes. 😄 We’ll be recording right from the floor of HLTH in Las Vegas, November 15–18. 🎰🔥 If you’ll be there and think you’d be a good sport, drop a comment or send either of us a DM. One thing we can promise. It won’t be boring. And yes, things may get a little heated from time to time. 😉
🚨 TL;DR:
On September 2, Tenet’s revenue cycle management (RCM) subsidiary Conifer Health Solutions filed a WARN notice for 1,037 permanent layoffs, effective November 2. The notice cites “restructuring and technology initiatives” and the end of services to CommonSpirit Health on October 30.
CommonSpirit is paying Tenet about $1.9B over three years to break a contract that ran through 2032. Tenet booked $413M of it as revenue in Q2 and called the deal highly accretive. CommonSpirit booked a $2.2B charge and a $3.4B quarterly net loss. Conifer is cutting 1,037 people.
Everyone declared victory. Healthcare is very good at that. 😉
The part nobody says out loud: the entire pitch of outsourced revenue cycle is that a specialist at scale bills more cheaply than a hospital can. CommonSpirit just paid $1.9B to say “F*ck, no.” It did so in the same 12 months in which private equity and VC bought, merged, or funded nearly every RCM asset with a pulse.
And CommonSpirit is not alone. Adventist Health also effectively said “F U” to its expensive outsourced RCM operation.
Insourcing could be the next big trend in RCM, with health systems deciding they may not need expensive middlemen like Tenet, Oracle, and Commure after all.
🚨 Here is what’s inside:
1. The Deal: $1.9B to Kill RCM With 6 Years Left on the Contract
2. Everyone Else Is Buying RCM
3. Why CommonSpirit Paid to Leave
4. Why Nobody Pays $1.9B to Leave Epic
5. Tenet Got Paid. Conifer Got Cut.
6. No Victory Laps Until These 3 Numbers Come Out
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