Todd Squilanti

FORCING CHANGE IN SITE OF CARE McKinsey & Company's recent paper on the forces pressuring healthcare, including the possibility of margin compression of up to 13 percentage points for health systems, does a good job of putting numbers around what most operators already feel. Two of the biggest drivers they mention are policy shifts in reimbursement and rising utilization driven by an aging population. The cohort of 70+ year old Americans will grow the fastest over the next 5 years, and it is well established that older patients have more complex needs, more chronic disease, and more touchpoints within the healthcare system. Layer that on top of continued clinical workforce shortages, and the supply-demand gap widens further. From my perspective, optimizing for site of care is the most important lever we have to address this challenge. We can’t quickly reduce how much care older patients need, but we can change where and how services are delivered. Supporting aging patients in lower-cost settings like the home, ambulatory sites, and virtual environments is no longer just a preference or convenience, it’s a necessity. This is where the conversation around site-neutral payments becomes so relevant. CMS is moving quickly in this direction, and hospital outpatient departments (HOPDs) are squarely in the crosshairs. The shift will undoubtedly clamp down further on hospital margins, but it shouldn’t be surprising. We’ve been talking about the demise of HOPD reimbursement for years, and the health systems that will fare best are the ones who are working towards aligning their approach with where patients can be treated safely, efficiently, and at lower cost, rather than relying on legacy reimbursement structures to fill the gap. And just like it doesn’t make sense to try to replicate a hospital or nursing home environment in a patient’s home, we also shouldn’t try to carry the same clinical staffing model into every care setting. Yes, there are non-negotiables when it comes to patient safety and clinical expertise, but there’s also a meaningful opportunity to rethink how teams are built. That means clinicians at every level working at the top of their licenses, thoughtfully involving family members and community resources, and using technology to surround these sites of care with non-clinical operational support. From my health system days, I understand why rising costs, margin pressure, and site-neutral payments feel like threats. While painful, I’m hopeful they can also serve as a positive forcing function, pushing us toward care models that are better aligned with our aging population and the realities of today’s workforce.

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Great perspective from my colleagues, Lisa Philippi and Craig Wallace. Boards are putting a premium on multi-exit Healthcare CFOs — in terms of pay and scope of role. Not surprising given today’s margin and hold pressures. https://lnkd.in/ebDEpmmR

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Fun surprise this morning to see that Fortune Term Sheet included my perspective on evolving care models in the 2026 Crystal Ball series. A shift I’m watching closely is how care models evolve when financial pressure meets operational reality. As reimbursement tightens, providers are looking for more sustainable ways to deliver care and we’ll see home-based care advance as AI strengthens operational infrastructure through intelligent, agentic workflows. Explore the full piece: https://bit.ly/3YvXAgf

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More data in health care does not always mean better outcomes. Most consumer data only appeals to the worried well, without considering the downstream impact on the health system. Real change requires real ROI - justified reimbursement, workflow changes, and overall cost reduction. Data is only valuable when it changes behavior, not just for patients, but for payers and providers too. The founders who win will connect consumer insight to system economics, where the real leverage lives.

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Over the weekend, alongside Sam Ulin of ClearView Healthcare Partners, I discussed how the rise of integrated direct-to-consumer (DTC) models marks a foundational shift for pharma, streamlining access, empowering patients, and redefining how treatments are promoted, prescribed, and delivered.   What started in obesity care is now expanding across therapeutic areas. The momentum is clear that patient-first models aren't just better for patients, they enable faster access and greater innovation.    Read the piece in BioCentury Inc.: https://lnkd.in/ejqJbhJh   #DTC #Innovation #Obesity #Healthcare #PatientFirst

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“We are not afraid of regulation.” I recently spoke with Bill M. at Private Funds CFO for an article on the regulatory policies impacting private investment in healthcare under consideration in statehouses across the country. I argue that now is the time for the industry to engage in thoughtful conversation. “Healthcare is a very human issue,” ARHI CEO Parker says. “It impacts everybody, every day, all the time, for the rest of our lives. When something goes wrong, it’s devastating.” “We believe in holding bad actors accountable. What we’re advocating for is a more thoughtful conversation about how we can engage lawmakers to ensure that those regulations don’t impact things like innovation, access and affordability for patients, and ultimately come up with a stronger framework, so that we can move forward and help invest in some of these communities where it’s needed most.” Read the full article here: https://lnkd.in/g2AtpemP

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Alan - this was another great Inside Reproductive Health podcast with Griffin discussing the importance of re-focusing on the underlying economics of IVF to help lower cost to baby to increase affordability and expand access to many more with Bret, Heather and Shruti. Bret is on the money in saying "over the last decade or so, there has probably been a greater focus on the revenue side and less so on the cost side." I have seen the same issue in many high growth industries where true demand exceeds the capacity to serve, leading to a much higher price that balances supply with demand. It also leads to a greater focus on acquiring new customers than on retaining existing customers, who are churning out because their expectations were not properly set and met. Given the range of cycles needed to have a baby, you would expect more multi-cycle bundles being offered with better economics to retain patients until they achieve what they started the process of fertility treatment for - having a baby! Not only do few clinics understand their true activity-based economics to properly price multi-cycle bundles given the value of retention, few clinics also know what % of their patients churn out after a failed cycle.

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For small business buyers, how important is industry experience? I discussed this topic with Lisa Piercey—physician-turned-operator, former Tennessee Commissioner of Health, and now a healthcare acquirer. The key takeaway: It can be the difference between generating alpha and facing unpleasant surprises post-close. Below are some of the other topics we discussed: 1️⃣ Credibility wins deals. Not just with employees and customers—with sellers. 2️⃣ Beware "unknown unknowns." Buying outside your domain? Mitigate with true subject-matter experts. 3️⃣ Use a "tight, loose, tight" thesis framework. Define the buy box clearly, stay open minded in the middle, then apply a binary filter: in the buy box or not. 4️⃣ When deals wobble, get creative. One of Lisa's best examples: a contract CEO + call option structure to bridge a diligence gap and flatten the post-close learning curve. Lisa also wrote Natural Born Entrepreneurs for mid-career professionals considering ETA, packed with templates, checklists, and an honest look at the tradeoffs vs. a W-2 path. If you're underwriting operators, or searching yourself, this one's worth a listen. Watch here: https://lnkd.in/dadEJ7WZ Listen here: https://lnkd.in/dm2sAG9v

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➡️ Great conversation with Dutch Rojas and Vipul Kella MD, MBA touches on the how thoughtful clinicians and healthcare professionals will fine tune AI tools to bring workflow efficiency to our fractured delivery system as well as reducing high variability in clinical care outcomes. 🩺 Better outcomes if we do this than the tech bros! 🔬 https://lnkd.in/gchQjSVm

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I recently collaborated with our team to explore the shifting landscape of Healthcare M&A in 2025. I’d love to hear how others in the space are thinking about these dynamics—What trends are you observing in healthcare M&A as the first half of 2025 comes to a close? 📖 Dive into the full article below:

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Nice chatting with Rebecca Pifer Parduhn at Healthcare Dive about 2026 trends we're seeing and hearing. Here are some specific themes we're particularly interested in this year. • Cost containment is becoming a top priority as rising healthcare costs return to the self-funded market. No single vendor has yet mastered this space, and many scaled TPAs are either building their own solutions or integrating multiple point solutions. We expect strong interest in software and services that address preventative care, access management, coverage design, case management, payment integrity, and discounting. • Larger payers are increasingly leveraging corporate development teams and venture functions to invest (or build) in assets across the payer ecosystem (e.g., claims, benefits administration, and data). These moves are aimed at creating differentiation beyond traditional growth levers. • Consumer-directed benefits—such as behavioral health, dental, wellness programs, and employee assistance programs (EAPs)—are gaining momentum. This reflects a shift in buying behaviors and growing dissatisfaction with the cost and loyalty challenges of traditional health insurance. Full read: https://lnkd.in/gX2Bya7J

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Hilariously short article from Becker's about very high stress in healthcare management. Yes, these are life and death decisions; 360 degree pressure. If 30% of the workforce feels that management is too stressed to help, there is certainly a role for basic AI-assisted workflow management to reduce time spent on organizational tasks. I would also argue that expert-level clinical decision support starts with routine organizational tasks. https://lnkd.in/gcAbv6GW

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Congress’s current debate about major cuts to Medicaid is a stark reminder that we are likely entering a period of increasing reimbursement uncertainty at a time when labor and wage pressures, born out of COVID, are already elevating the cost of care. Margins across the healthcare ecosystem are being compressed from both ends, and if you are running a healthcare business right now, you are feeling that pressure. Simultaneously (and serendipitously), the adoption of AI, virtual care delivery, outsourcing, and new reimbursement models is accelerating creating opportunities for major productive gains that can mitigate these challenges. In our latest Healthcare POV, we dive into these dynamics for operators and the tools and capabilities that Rallyday Partners has developed to help nimble and visionary leaders adapt, thrive, and build in this complicated environment. Reach out to us if you would like to learn more about our partnership approach!

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American Shared Hospital Services (ASHS): Direct Patient Retail Segment Expanding, with Two Key Projects Under Development #AMS #AmericanSharedHospitalServices #SmallCap #EquityResearch

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Transforming healthcare with AI requires industry. Industry requires capital investment. Capital investment requires return. Return requires revenue. Revenue requires reimbursement. Medicare (and transitively private insurance) reimbursement policy for clinical AI will define the incentives for the technologies we build and deploy over the next decade. Our existing fee for service codes are what the military would call cost-plus contracting. We pay for every nail, screw, and hour of labor and don't care if that was a good and efficient way to build the tank or not. Our CMS Innovation Center director, Abe Sutton, believes cost-plus is the wrong path for the future of American healthcare. ACCESS and VBC models pay for outcomes. When we have AI that can manage heart failure can we link payment to making people healthier? Doing so would unleash the might of American techno-capitalism on exactly the thing we care about in society, but there are devils in the details.

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Major hospital systems are already implementing our portfolio company's infection prevention technology. Heading to Healthy America 2025 to discuss how one investment is making a massive dent in the $10B healthcare-associated infection problem. When hospital CFOs see 40% infection reduction and immediate cost savings... adoption accelerates fast. The math here is straightforward. Healthcare-associated infections cost US hospitals $9.8B annually. Our technology cuts that by nearly half while improving patient outcomes. What's driving adoption: → Proven ROI within 90 days → Zero workflow disruption for medical staff → Scales across entire health systems Early movers are seeing results. The rest are watching from the sidelines, calculating risk versus reward. But in healthcare, patient outcomes and cost savings don't wait for perfect timing. Thoughts on healthcare investments that deliver immediate financial impact while improving care? Like and share if you're tracking healthcare innovation that actually moves the needle

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Are private equity-backed medical groups coming to an end? I've often wondered about the strategy of private equity firms acquiring independent physician practices, often for big multiples (upwards of 10x of EBITDA). As private equity acquires practices at scale, they are able to package them with the goal of re-selling them at a later point, typically 5-7 years later. Think if you were a real estate investor that bought 1 house and then quickly bought 19 more houses, raising the rents along the way and making small cosmetic improvements. The 20 houses you own could be packaged and sold to another real estate investor for a higher value than selling one of the individual pieces. But private equity is now running into the same challenges that hospitals and health systems have in employing physicians. There's honestly not much to squeeze. Sure, maybe you could force physicians to see a few more patients, and yes, maybe you could consolidate back-end billing operations, but there is not a lot of extra margin in physician practices. My observation is that private equity firms are challenged in finding new buyers for their packaged assets, causing PE firms to own these large medical groups for longer and straining their capital. If they cannot find new buyers, then they will likely resort to largely ineffective strategies that health systems pursue, such as squeezing provider compensation and setting unrealistic productivity standards. Lesson: if you're an independent practice, be very cautious of exploring relationships with PE. We may start to see PE-backed entities start cutting medical groups, potentially leading to a resurgence in private practice.

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