CommonSpirit is confident that its plan to insource revenue cycle operations and exit its ownership stake in Conifer Health Solutions will boost the Chicago-based system’s long-term financial trajectory, senior executive vice president and CFO Michael Browning said.
In February, it was announced that Dallas-based Tenet Healthcare would regain full control of Conifer. Under the agreement, CommonSpirit will pay about $1.9 billion to Tenet over the next three years, while Conifer will pay CommonSpirit roughly $540 million to redeem its 23.8% equity stake, effective Jan. 1. Conifer is continuing to provide revenue cycle services to CommonSpirit through the end of 2026.
Mr. Browning said on the system’s March 3 investor call that the decision to exit the Conifer joint venture “aligns directly with our unification strategies across CommonSpirit to drive greater operational integration, efficiency and patient experience.”
“We also believe we can significantly improve revenue yield and overall collections,” he said.
Mr. Browning said CommonSpirit’s cost to collect is about double the industry average and that returning to the median benchmark data would materially reduce its overall costs.
Accelerating its Epic implementation is another benefit of the decision.
“We have rethought the Epic implementation and will be making some changes to which parts of the country will be going on Epic sooner rather than later,” Mr. Browning said. “We should be able to accelerate the Epic implementation by a few years as well.”
CommonSpirit is currently developing a comprehensive revenue cycle transition plan to minimize disruption and support the continuity of operations. Mr. Browning said that process is expected to be completed in the next 10 months.
“To bring this in-house, we’re going to have to bring on vendors to be able to help us do this work,” Mr. Browning said. “We’re going to be looking to AI as an opportunity to help us manage the rev cycle. We’ll be doing some onshoring, and, potentially in the future, some offshoring where we can reduce the cost of the back office.”
Mr. Browning thanked Conifer for allowing the system to transition and said that the company has been a good partner for CommonSpirit.
“We were able to negotiate a deal that Tenet has said publicly was good for them and we believe is good for us as well,” he said. “When we look at the opportunity to improve quality, service, culture and financial performance, it not only allows us to improve our current book of business, but also provides benefits beyond that.”
At the Becker's 11th Annual IT + Revenue Cycle Conference: The Future of AI & Digital Health, taking place September 14–17 in Chicago, healthcare executives and digital leaders from across the country will come together to explore how AI, interoperability, cybersecurity, and revenue cycle innovation are transforming care delivery, strengthening financial performance, and driving the next era of digital health. Apply for complimentary registration now.