April 17, 2024

Podcast - Conversions of Public Hospitals

Counsel That Cares Podcast

In this episode of "Counsel That Cares," healthcare attorney Jesse Neil examines the unique challenges and strategic options facing public hospitals, with a focus on navigating the turbulent waters of healthcare transformation. The conversation also looks at converting public hospitals to private status to harness more flexibility and drive growth. Mr. Neil is joined by Anu Singh, a managing director at Kaufman Hall, which is a financial and strategic advisory firm, to dive into today's topic. They discuss the complexity of healthcare markets, the impact of COVID-19 and potential partnership models for public hospitals aiming to remain viable and fulfill their community commitment amid industry shifts.

Narrator: You're listening to Counsel That Cares, a podcast series brought to you by Holland & Knight's Healthcare & Life Sciences Team. With more than 400 attorneys practicing across the healthcare industry, members of our Healthcare & Life Sciences Team are on the leading edge of industry developments. This series serves as your personal checkup on the multifaceted playing field of healthcare law and business trends.

Morgan Ribeiro: Welcome to Counsel That Cares. This is Morgan Ribeiro, the host of the podcast and a director in the firm's Healthcare Section. On today's episode, we are kicking off a multi-part series focused on developments specific to the public hospital space. We spent a lot of time on Counsel That Cares talking about, you know, challenges and developments related to the hospital space. But today we really want to focus on public hospitals. And joining me on this episode are two individuals who bring a lot of experience in working with hospitals across the country. First is Anu Singh, who leads the partnerships, mergers and acquisitions practice at Kaufman Hall, and Jesse Neil, a partner in Holland & Knight's healthcare regulatory and enforcement group. So with that brief intro, welcome to the show, Jesse and Anu.

Jesse Neil: Thanks for having us.

Anu SinghGreat to be here.

Morgan Ribeiro: Great. So before we launch into really the meat of our conversation, I always think it's helpful for you all to have the opportunity to share more with our listeners about yourself and your firm. So Anu maybe you can start us with a little background on Kaufman Hall and your particular practice.

Anu Singh: Yeah. Thanks, Morgan, I really appreciate it. Kaufman Hall is an advisory firm that focuses on financial and strategic advisory. I lead our mergers and acquisitions practice within Kaufman Hall. We spent a lot of time working with mission-based organizations, tax-exempt and other for-profit entities as well, and strategizing and thinking about partnership models, transaction models, and eventually structuring and negotiating transactions for our clients. So what's a little bit unique about our practice as we bring strategic, financial and sometimes even debt advisory considerations to these transactions and we believe that the pursuit of M&A transactions is almost always, at its foundation, a strategic initiative. And that's the approach of our firm. I've been with the company for almost 20 years, and I lead the efforts nationally. I'm very happy to be here with you.

Morgan Ribeiro: Great. Jesse, you want to tell us more about your practice?

Jesse Neil: Sure. I'm a partner in the Nashville office of Holland & Knight. Holland & Knight has one of the largest healthcare practices in the country. It spans the full spectrum: regulatory, enforcement, litigation, private equity, hospitals, governmental and otherwise. And my practice focuses on advising hospital boards around the country in terms of strategic initiatives, strategic planning and different ranges, different types of transactions that are available, depending on the structure and type.

Morgan Ribeiro: Great. Well, thank you both for those introductions. And as our listeners can tell you all, both of you bring a lot of perspective to this conversation as we look at the unique pressures that public hospitals currently face and the solutions that you all mentioned that you're seeing in your, your work with hospitals. So to get us started, I thought it might be helpful to just get a lay of the land. How many hospitals in America are actually public hospitals? What is this universe that we're looking at here? And any macro-level trends that you can share with our listeners as it relates to public hospitals. Anu, I'll start with you.

Anu Singh: Sure. If it's numbers, it usually starts with me. Right Jesse? So I guess we'll start there. Of the 4,000 or give or take hospitals in the United States, probably about 530 from our count, give or take, that have a public or government ownership model behind them. And those vary in size, although they are a little bit more focused on the small to medium-sized. There's probably only about a dozen that are at that kind of call it 400, 500 bed licensed structure. So I'll give you a kind of lay of land of who they are and why they may be different from a capitalization and ownership model. I think the lay of the land for these organizations is actually quite similar to what all of the other hospitals are facing right now. There's a significant amount of change taking place in the market. We've seen COVID accelerate and perhaps expose some vulnerabilities in the system as a whole. And the comeback story here is going to be, causing organizations to think about new playbooks and new approaches to remaining viable and delivering on their community promise. I think public and government hospitals will face some of those same challenges everyone else has, but a few unique ones as well, which I'm sure we'll cover today.

Morgan Ribeiro: Right. And anything Jesse, you want to add to that?

Jesse Neil: Sure. I do think that they're exposed to the same issues and pressures that the full range of hospitals are. There are some specific issues that the public hospitals face. My experience, one being sunshine laws, those vary by state, but in general, it really requires the boards and sometimes even the leadership of the hospitals to have public meetings with regard to strategic planning and execution on it. And that really obviously can hinder your competition in a market where there's multiple players. Two, there's, a lot of times, a governmental structure on governance, there's a structure on governance that's required by whatever statute enables the creation or operation of the hospital. And so it can infuse the governance and even the operations with politics, which in turn can affect recruitment and other government, governance issues that maybe a private hospital wouldn't have. So there are some unique headwinds for public hospitals.

Morgan Ribeiro: You know, I think as we look at public hospitals, there are those that are in more urban settings versus those that are in more rural communities. Do you see a differentiation between that? I mean, I think it's probably just the same as any hospital, whether or not it's a public hospital or not, just the differences that we see in rural versus urban hospitals generally. But, I mean, I know there's a large portion of public hospitals that are in, you know, kind of smaller rural or suburban communities, and they likely face just even more pressures that maybe those in an urban setting.

Jesse Neil: So I think the pressures are different for sure. And sometimes they can make the setting be more challenging. I think the first challenge, though, of this transformation that really needs to be covered when we think about what's unique to public hospitals, is that the system itself, the entire healthcare system, is under significant duress right now. And when we look at the protections that were afforded to not-for-profit healthcare, it was largely an industry, you know, particularly inpatient and many outpatient care areas for a long time that didn't really have disruption coming in. There weren't segment or specialty providers coming in. There weren't people who are bringing a better, cheaper or faster model to something in healthcare and trying to take a piece of the business away from the health systems. And that's changed. I think some of those protections around, well, that's healthcare and we don't do that, are starting to really move away. And so you have retail providers entering healthcare. You have online retailers that are bringing an element of healthcare delivery. And so while they're picking and choosing and what they think they can be successful at, this idea of innovation and disruption and segmentation has really picked up. And all of this took place in the late teens. That was before COVID came around. That's when we saw a lot of the emergence of these new business strategies that were causing health systems to feel like they were behind. Now, during COVID and post-COVID, we have even greater challenges because not only are we faced with those strategic realities that we're starting to change, we've had organizations that have had the ability to come in and maybe double down on their strategies of innovation and disruption, and that's because they were focused on a segment or a single part of healthcare. Whereas larger legacy healthcare systems had to deal with the COVID pandemic and everything that came with it from an operational standpoint and then think strategically. So only now is the dust settling from a clinical enterprise where organizations go back and start thinking about strategy. And so I think it's really important to lay out that no matter where you're at, that overall systemic set of challenges for the industry that pervades everyone. Now to your point, where you get to urban and rural and size and other market differentials for public hospitals, I agree with Jessie. I think part of the challenge there is what's needed in this industry to change is being nimble. And generally speaking, not-for-profit healthcare has known to be a little bit of a slower market to react to market change. And it's not an indictment on the participants. It's the fact that the industry itself hasn't changed in a very long time. Reimbursement models have been pretty similar for decades before they started to change most recently. So when you couple that level of intense change or significant change with disruption and everything else, you need a nimble board and nimble organization to figure out what can be analyzed, what can be changed about the current business model. Should we do that with someone else? And in generally speaking, if not-for-profit healthcare is a little bit slower to react. Authority and county-owned facilities that have a broader governance base that includes those who are appointed, those who have political ties, they may not be aware of just how quickly this industry has changed if they're not in it. That presents a whole new challenge around executing on business plans.

Morgan Ribeiro: Absolutely. Well, thank you for kind of laying that out for us. I know I threw a curveball question there, but, you know, I think it's interesting to make those distinctions and, you know, just the political aspects of that alone, I think are a unique challenge here that we're talking about. So I want to I want to shift gears and talk more about, you know, solutions and what we're seeing. So, you know, if you are, you know, a board member or on the executive team at a public hospital, what are some of the strategic options that they should be looking at and considering?

Anu Singh: Well, I think the first thing to do is evaluate what the role is for the organization, the community, and what are the aspects of what the community most values of the organization. You know, we talked about urban and rural settings, and we talked about systemic issues and maybe local issues. What that demonstrates, Morgan, is that if you're going to do something that's different, if you're going to be more effective in your market, in your community, you have to know what the demands of your community are first. And so looking at the strategic plans, there isn't a single set of things that will be a solution for every hospital or, for that matter, every public or government hospital. What has to be evaluated is what is it that we're most valued for in our community? What is really going to be the core business of ours going forward? How do we overcome some of the financial or operational challenges that are facing us today? And that's going to include a reevaluation of the current strategic plan. What do you look like as an independent organization? I think we have to get over the fear and the concern of partnering with organizations. And I think we need to ask what are the tactical and what are the strategic ways that we might engage with someone else to bring benefits to our community or to enhance our operations that are more than what we can do ourselves. And then third and final, I think you have to evaluate what's the long-term future of our organization. How do we recast that strategic plan so we know we're successful with strategies in front of us through our windshield and not relying entirely on what we did five, 10, 15 years ago as a way to drive economic or mission-based success.

Morgan Ribeiro: I mean, Jesse, anything you'd add from your perspective? Oftentimes Anu gets contacted before legal counsel gets contacted. Sometimes we're in at the board level first and then bringing in someone like a Kaufman Hall. So I'm just curious, you know, from your perspective when you're getting contacted about these, you know, these challenges, what questions are you hearing from your clients? You know, what is sort of sparking these conversations?

Jesse Neil: Sure. Yeah. It's not uncommon for me to hear from a board chair or general counsel for a hospital system to say that, you know, they've been considering for some time whether their current structure is the best structure. And what are other people doing out there? What are our options? And those are obviously big foundational, important questions. And we'll generally run what I call a fiduciary process. You know, the board members, oftentimes they're elected for public hospital systems. Sometimes they're appointed, but their fiduciary is at the organization. And so it's really a legal obligation and a legal duty of loyalty to not just the organization, but the organization's mission. It's incredibly important to tie those two together. And so reviewing, you know, not just what their current structure is, the status quo. There might be some benefits to maintaining a public status, for example, supplemental payments, sovereign immunity. But you really need to be able to weigh those against the cost in the short term, medium term and long term. And that requires some iteration of case studies, some state law analysis. Are we allowed to change our structure or are we, do we need to pass a law to allow it. And if so, who’s going to enable us to do that? What's the time horizon for getting something like that done? Do we need to do it just to keep our options open? And I've seen that process can last six months or a year. And it's important, even if at the end of the day, the hospital system, particularly if you're a, in my experience, as a sole provider in a rural area and there isn't day-to-day competition with another health system, you might say that today our system as a public system gives us the best chance to secure our mission. Secure our mission? That's the most important thing that, that we have, is our job as a board member. But you've still, at that point, done your fiduciary duty of evaluating the status quo, evaluating options and made an informed decision about what strategies you should use. And so that's a, from a legal perspective, that's a really, really big box to check. And so that's important. Alternatively, you can get to the end of that process and realize maybe you're not distressed, but you know, the plan for the next year or five years really is, is unclear in the current structure that you're in. And it takes a process to realize that. And you have to make a determination from our mission to protect our mission. This "is the status quo sufficient, or do we need to even the playing field?" That's a term I often hear, "to secure the mission, we need to even the playing field." And that at bottom really is what drives the decision to transform an organization, in my experience, from public to private or public to partnerships. And there's a range of partnerships, and Anu probably knows those better than I do. And pursuing that process is critical to, over time, maintaining and protecting access to care in the community and in the mission.

Morgan Ribeiro: Jesse, I think you tee that up perfectly. Because the next thing I really wanted to explore with Anu is public hospitals. You're looking at these options. What are those options that exist? I mean, I know we've talked about, you know, going from public to private, that kind of conversion. But obviously there's other options that are out there. So maybe we can briefly touch on some of those.

Anu Singh: Yeah. Morgan, I think the options have evolved because the industry has evolved. So 10, 15 years ago it was all about scale. It was, you know, how do we become a bigger organization? Because bigger means there's probably safety and efficiency. There's the ability to lower costs down. There's ability to think about new and different reimbursement models. That's the old game that used to be played. And so when you look at those options, it was, well, if you're of a certain size, look for something bigger. And that's changed over the last five to 10 years. And it's been complemented with organizations that are saying, look, we do pretty well with what we're doing, but there's a base of resources or intellectual capital or know-how that we're not going to be able to get in our size, that if we're going to become, say, a clinical and business intelligence-driven organization that wants to reduce clinical variation, and we're a community hospital, or we're a collection of two or three community hospitals, the investment we'd have to make in order to allow that to happen is so great, it might crowd out other things that we'd have to offer our community that we also can't be the high degree of orthopedic services or local cancer or oncology services that we're offering. And so there's this choice that's laid out of we're unsure how we can do all of this, and we're a little bit concerned about making a bet on one at the detriment of others. And that's actually what's driving a lot of partnership discussions and strategic options discussions for the industry as a whole, but most acutely, for those that are public and government-owned, because there's an unlimited amount of bandwidth there that exist around investment capital. And at some point you're going to have to make a choice as opposed to trying to do multiple things. And when you're looking at doing multiple things, that's when you have to value what are those partnership models? And what's changed most significantly is instead of just running to another health system and saying, hey, that should be our strategic partner, there are organizations that are looking at, well, what we really need is a little bit of help and a value-based journey. Maybe one of our models could actually be interfacing with a health plan of some type, or a risk bearer. And in a market, or maybe what we really need to do is get better at our consumer and our specialty care. Well, that might be something where there's outside capital sources that could come from specific, discreet joint ventures. So we'll do urgent care with so-and-so, and maybe we'll do a lab with so-and-so, but we can bespoke pick each areas of war. We'll have separate and different types of partnerships. So those examples of more tactical resource, intellectual capital and know-how-based partnerships, those are much more available now than they were five, 10 years ago. And that's why the options assessment really needs to come back to where are we today? Where do we want to go strategically? What's going to be most valued by our community? And then how do we get there in a very customized and perhaps bespoke way?

Jesse Neil: I couldn't agree more with Anu. It really is. There is no cookie cutter approach to this, and the organizations are so large and there's so many resources that have already been dedicated to it, that you really have to do an evaluation of your strengths, your weaknesses, where you are, where you want to go, you know, what positions do you have aligned, on staff or employed, with you, what pipeline of physicians do you feel confident that you'll be able to recruit. It really is that granular where you decide, OK, we're going to make our play in this area, in this geographic region or in this specialty. This is where we're going to dedicate and focus our resources. And in some of these other areas, where do we find a collaborator, a partner, and, you know, a big theme that I see in the evaluation process is collaboration, not just for collaboration's sake, but from a clinical perspective, whether it's value-based care, improved outcomes. It really is driven by clinical collaboration, and capital associated with that is substantial. And that drives a lot of the discussions in the strategies, because bringing together different positions, different specialties, different resources, the ancillary support that's required, you know, that's, there's a particular challenge for governmental hospitals when you're doing that, because a lot of times, private organizations don't want to necessarily do business with a public organization. They're afraid that the sunshine laws will cause their investments in their operations to be adversely impacted. And it's just as easy for them to partner and collaborate with someone who's private. And so finding ways that are unique to your organization, your community, their needs, your mission, and then finding a way to double down on your strengths and find a willing collaborator, you know, that's the name of the game for any organization and for public hospitals. There's some special headwinds associated with that. And I can only imagine that clinical collaboration, outcome-based reimbursement, it's going to be more important, not less important, over time. And so to Anu’s point, being nimble, it really is the name of the game, I think at this point, when you're developing and refining your strategic plan.

Morgan RibeiroRight. I think that's a wonderful segue into our next conversation, which is really more specifically focused on the conversions, those hospitals that are public hospitals that are considering going private. This particular option can be a great one for many, and I know we've worked with a number of hospitals in the last couple years that have decided this is what's best for their organization. But it can, it can come with its own unique challenges. So I'm just curious why you believe that boards right now are really considering this as the best option for them?

Jesse Neil: I can start there. You know, going back in time, you know, a lot of these big public hospital systems were at one time private, not-for-profits. And there was a trend throughout the country, probably in the '60s — '50s and '60s — where they converted over to a hospital district or some iteration of that. And there were several reasons for that. One was access to capital. And to the complexity of the healthcare delivery system in the United States in the 1960s as compared to today, it could not be more different. It is infinitely more complex. And I think at bottom, that is what's driving a lot of these public hospital systems to evaluate and say, is the model that we adopted as a community in 1968 to secure our mission, is that the same model that we should use today to secure and protect our mission going forward? And, as you can imagine, oftentimes it's not. And so if the status quo is not the best way for you to protect the organization's mission, then what do you do? And you look at a range of transactions, strategic initiatives. Do you start looking for a capital partner, a transformative transaction, contractual arrangements where you joint venture, charter, joint venture, service lines? Or do you say, you know, as much as we benefit from sovereign immunity, there's a dollar figure we can put there. As much as we benefit from a supplemental payment that could go away next year or the year after, as much as we like having the free money come in the door, you know, we are in an area where we have a strong community commitment to our organization. We have a growing economy. Hopefully you have a diverse economy. Maybe you have private sector investment, strong educational institutions, strong civic and political leaders that believe, you know, the governmental status — the shackles, if you will, of governmental status — are greatly outweighed by the benefits of being a private, not-for-profit that can go toe to toe with competitors in the market. And they can joint venture, negotiate new novel arrangements. And so, you know, from a high level that's the target on the wall, that you often are shooting for when you go through the process and say, you know, the status quo is not ideal, what do we do? You know, how do we win? And, you know, oftentimes you end up at a, at a place where you say, we should be able to do what others are doing, and we think we can win if we can, and they move forward with that process.

Anu Singh: Yeah, I just, I think you said really well the complexity of this industry. Creates one very, I think, almost universal fact around organizations that are thinking about conversion. And that is if it's a complicated market, then it's going to be an answer or an evaluation that itself is going to have pathways that have given tax. It's going to be a tradeoff. The idea that conversions are some panacea and solve all the ills of organizations is just untrue. If it were that simple, they would have already all converted by now. The truth is that there's going to be a tradeoff of, well, there are some benefits that allow us some flexibility to do some things strategically that are beneficial for the organization, but on the other hand, we're going to have to incur these other new challenges, or at least some friction or inertia around changing our model that we're going to have to be fully aware of. We need new capabilities. We need new resources. We need a new mindset around certain initiatives or certain parts of our operations. So I think the reason for conversion is the same as the nature of the outcomes. And that is this is so complex that I think boards are seeking counsel to say, look, as we think about duty, care and duty of loyalty, the one thing we know for sure is whatever we did historically probably isn't going to work going forward to be our true north for success. We're going to have to change as an organization, and is the level and type of changes that may be needed here, is that going to be enhanced or improved on a net basis by making a conversion? Those are the rhetorical questions that are being asked, and they are the right ones.

Jesse Neil: And I'll add to that. I think in any community, whether you're the sole provider or there's other competitors, a hospital executive and a hospital board, those are, you know, quasi-public posts. Your community has entrusted you with an incredibly important asset that, you know, has a dollar figure, but also has emotional attachment. Oftentimes, they'll be family members for generations who have been born in that hospital. And it's no — and it's even more the case when you have a public hospital system, when you're going through this process and evaluating it in that is where you can really make a difference in a community if you hold it and maintain that, that public trust, and you communicate and you engage and you're transparent about the process you're going through, and why the impact that a C-suite, a CEO, a CFO and that board can make on that community for generations. It really is amazing to see when you've got an executive team and hospital leadership that is able to get the confidence of the community, leadership and civic and political, and able to marshal those resources and those sentiments towards improving the health system. I would say from a hospital leadership perspective, it's an amazing opportunity to make a positive impact.

Anu Singh: Jesse, what's so important about what you said, and it triggered something with me, is that organizations that are thinking about a conversion, for those are thinking about partnership models in general, there's always this emotional hurdle to get over. And I think one of the things that really needs to be stated in an industry that's transforming so quickly is that going private or finding a partner, that does not inherently mean that the organization has failed in some way. In fact, it could actually be that of all the organizations that have closed or went through bankruptcy and everything else, that this entity that is considering this question has navigated around all those issues and has arrived at a point where in order to do more for its community, it has to do something differently. It's actually graduated from one model to another. I think that's the approach that fiduciary need to think about as you're going through this. It's not a conversion for the sake of something didn't go right or maybe this is a failure of the organization as opposed to no, you've persevered through so much that given the amount of change and the headwinds of this industry, your position as one of the organizations who is delivering on its community promise is so valued that with more tools, you can even do more going forward. That's a mindset change that has to be brought to this conversion discussion no matter which way it goes.

Morgan Ribeiro: When I look to your earlier point, Anu, you know, this is not a panacea, right? Like the conversion is just the almost the first step. And this kind of evolution of the organization and the opportunities that it will open up. And then from there, you know, different types of partnerships and arrangements they'll be able to, you know, implement. So I think the conversion obviously comes with a number of, you know, unique kind of things. Jesse, you touched on this kind of the political aspects of it. You know, in some states, we're having to go through the state legislature to enact, you know, change that way first before you can do anything else. And I think the timeline for this particular option is something that has to be weighed as well. I mean, you obviously, I think if you're in a situation of distress, having the time to kind of implement this change in that conversion, it just may not be an option at that point. So, you know, I think maybe Jesse, I don't know if you want to elaborate any more, just on some of the things that have to be considered from that kind of political or communications component of this.

Jesse Neil: Sure. So I think one of the most important parts of the fiduciary process, when you're reviewing, considering your organization and what your strategic planning should be, is you need to have a firm, firm grasp on the status quo. If we double down, if we do what we have been doing, is that truly sustainable? That's a tough question to ask. And often times has a tough, tough answer. When you look at the headwinds that hospitals are facing, the headwinds that some of these communities are facing, it's a tough, tough question. But it is absolutely critical to drive kind of the decision tree that you'll have to go through when you're making sure that your organization is in the best place it possibly can be when you do reach the conclusion that you need to change to protect the organization's mission. That conversation with community stakeholders, with elected officials, you know, you're going to need to partner with them, almost certainly, even if a new state law is not required, though it often is. You will need their engagement and buy-in. And they need to know the hard truth of healthcare organization and what they need to do to survive. And if you have that conversation and you've got the credibility to for them to, to listen to you respond and invest in what you see as the status quo and what you see as, as the solutions that you want to, we want to come to, you know, that first conversation is just immensely critical. And, you know, from there it often is required that you'll need to get a state law, required sometimes you have to, in the state law required at the request of the county government. It's really, you've seen one of these political processes. If you've seen one of these political processes, you've seen one. And so you'll have to develop a strategy that often takes a year or two years or even longer to determine, you know, not just that we need to change. How do we need to change? What is the state law with regard to our structure and where we want to go, and what changes do we need to make in order to do that, and then develop that strategy that you can't really unwind from the political and communications component of it. You know, simple questions like, why are we considering a change if they're not addressed, if there's not planning around how to respond to that at each phase of that process? You know, if there's no information that is going to take on a life of its own, in a community, they want to know what is happening with their asset, what their, what is happening with their community hospital, and enabling the leaders, giving them the tools to take the organization through that process, to authorize it, to, to even evaluate a conversion or a transaction. And so you're going to have to have a really sophisticated, proactive public outreach and communications component, in order to get yourself even to the table to consider one of these. And so, again, having a CEO and a board that have the public standing and the sophistication, frankly, to take the organization just out of the starting blocks, let alone to get to transaction is so important. And it, really, for any CEO or hospital board, if you're able to do that, you have really earned a special place in that community in that organization.

Morgan Ribeiro: Great, Jesse, and I know we'll cover that more extensively in our next episode. That will really be the focus for us to dive deep into communications and government relations, both at the state level, the local level, and really navigating a very nuanced, you know, situation. So look forward to discussing that more. As we wrap up, I'm curious, anything else you all want to add in terms of advice or learning lessons or, you know, things you've seen go wrong?

Anu Singh: Perhaps this goes without saying, but, you know, tremendous change in an industry, a lot of things happening, new and different approaches to thinking about collaboration and maybe even tax status or the corporate organization being considered, look, the best way to undertake any type of analysis like this is when you have time, when you're not under duress. And so I think the advice that's most critical here is organizations should be proactive in evaluating this. It's a much better outcome to study something, have a playbook, put it on the shelf and realize you don't need to act on that for three, six, nine months down the road than it is to say, can we do three to four? Or as Jesse said earlier in the session, you know, six months of work, can we do that in two and a half weeks because we're not sure how we're going to meet some obligations coming up. That is not the ideal time to do it. You're not thinking from the construct of what's best for the community, not thinking from the constructive strategic purpose and vision you're reacting to a market factor, or that maybe you don't even, comptroller could see coming, and you're trying to make the strategy backfill for the action you're going to take. And again, that can be said about any strategic initiative. So why is this any different? The time to do this is when you have time and space. You have the ability to organize thoughts. You have the ability to gauge community input and stakeholder input. That's the right way to do something like this. And so, you know, I think the parting advice I'd have is if you're thinking about this, you should probably be acting on it to evaluate, even if you don't actually take steps to actually execute on the evaluation or the pursuit of a conversion.

Jesse Neil: I couldn't agree more. A proactive fiduciary review process. It's a legal imperative. It's a risk management tool. And it also is really critical to develop the right plan to protect and secure the mission of your organization. And importantly, you know, getting to know the organization and where they are, where it is in terms of its strategy. You know, it's important for you to know what is going on in the market, what is going on, from a public policy perspective, what's going on in other parts of the country that could impact your position. Knowing that, you know, policy trends in your particular state are trending the wrong direction with regard to public hospital status and the flexibility, knowing that, really helps inform, you know, not just where you are, but where you think you'll need, you'll need to go. And so that's critical information. That is just a fiduciary duty, really on the part of the board member to do that. And it really is what enables you to get the mission and organization to the place where they need to go. So, you know, starting that process, doing it and knowing what you can is, is critical.

Morgan Ribeiro: I think on that note, that's a great place for us to wrap up. I appreciate both of you joining us today on this episode. Look forward to further conversation and Jesse chatting with you on our next episode about a number of the topics that we briefly touched on today. So thank you both.

Jesse Neil: Thank you, Morgan.

Anu Singh: Thanks, Morgan.

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