As competition intensifies in healthcare and administrative complexity grows, LMH Health is leaning on AI and automation to strengthen financial performance, improve operational efficiency and keep pace with larger neighboring systems.
CFO Rob Chestnut said the organization is embracing technology as a strategic equalizer — one that allows a 174-bed community hospital to operate with the sophistication of a much larger system.
LMH Health sits in Lawrence, Kan., a university town that has experienced rapid growth and increasing spillover from the Kansas City metropolitan area. That expansion has brought new competitors, new payer dynamics and new demands on the system’s employed physician enterprise.
“We didn’t live in a really competitive environment up until about 10 years ago,” Mr. Chestnut said during an interview with the “Becker’s Healthcare Podcast.” “We were a little bit of an island, and then as the greater Kansas City area started to expand, and it became a corridor. That has really made us become more competitive.”
The competitive environment prompted LMH Health to become more efficient — particularly in revenue cycle and physician operations — as reimbursement tightens and staffing constraints deepen.
AI is moving from pilot projects to everyday workflow
Like many systems, LMH Health initially approached AI cautiously. But adoption is now accelerating, particularly in areas where champions demonstrate rapid value. Provider documentation has been one of those gateway use cases, driving enthusiasm across clinical groups.
“We’re doing a lot in AI with documentation for our providers, and we have some tools,” he said. “The adoption has been sometimes uneven. But I think what you find is, in any particular specialty, when you have a physician that really is a champion, it becomes infectious because everybody figures out this is great.”
On the revenue cycle side, AI is helping the organization automate tasks that historically consumed large portions of staff time. Coding automation, for example, is improving efficiency while supporting more consistent output.
As payer complexity grows, the system is using data and automation to respond more effectively.
“It helps us a lot to identify the patterns of denials and what’s going on,” he said. He added — with a candid nod to industry realities — that both sides may increasingly rely on competing tools. “You have AI on their end and AI on our end, and they’re fighting each other in the middle of trying to figure out.”
LMH Health is navigating difficult Medicare Advantage performance as denials increase and payment policies shift. The system made the decision last year to exit two MA contracts based on financial performance and operational strain.
“Medicare Advantage has been a struggle for us,” he said. “Last year, we chose to not renew two Medicare Advantage plans, and we have a few others that we work with. That was disruptive to our patient population.”
He believes AI-driven transparency could ultimately help payers and providers move toward more predictable, data-supported relationships — reducing the “war of attrition” that defines much of the current environment. Health systems will need technology partners with big companies as well as small startups to transform their systems and deliver better results. Relying on just one big vendor may mean systems miss out on valuable innovation.
“I find that the solutions typically don’t come from the big players,” he said. “They come from some disruptor that has figured out, for instance, referrals or just different pieces that they work on that they’ve really honed in on.”
Revenue cycle is shifting from labor-first to tech-first
For years, the revenue cycle has been defined by large teams and manual work. AI is beginning to reverse that ratio, allowing labor to support higher-value exceptions rather than act as the primary throughput engine. As labor markets constrict, workflows must scale without proportional increases in staff.
“We’ll have a revenue cycle with less people over time,” he said. “That’s just going to be the future.”
Executive teams are focused on building a strategy to integrate technology into the human workforce and upskill teams so humans are working at the top of their abilities. There has been so much change in the last few years, and more coming as AI and automation become more sophisticated. The most successful leaders are building trust through transparent communication and internal alignment on where the organization is headed.
“It has to be a collaborative effort because without it, you can have the best solution that just doesn’t get adopted,” Mr. Chestnut said. “And then nobody’s happy.”
Despite the promise of technology, workforce shortages remain one of LMH Health’s most immediate pressures. Success, Mr. Chestnut said, will depend on creating the kind of environment where employees want to stay — something technology can support but not replace.
“We’re competing for less people,” he said. “We want to create a great environment to work in, and we realize that it’s not all about compensation or not all about benefits. Sometimes it’s just about creating a great environment where people can flourish.”
