Houston-based Nutex Health, a physician-led network with 22 microhospitals, is growing rapidly, with plans to open two more microhospitals this year and 14 more by the end of 2025.
Jon Bates joined Nutex as CFO in June 2022 after almost 16 years serving as vice president of accounting and corporate controller for U.S. Physical Therapy, one of the largest pure-play operators of outpatient physical and occupational therapy clinics in the country.
Among Nutex's goals for the rest of 2023 is to increase patient volumes and add new service lines, such as its behavioral health program.
Mr. Bates discusses financial objectives for 2024, the biggest challenge facing Nutex and how the health system plans to grow revenue in the coming years.
Question: What are the top three strategic financial priorities for your health system in the next fiscal year?
Jon Bates: Reimbursement improvement as a result of the effects from the No Surprises Act that took effect in January 2022, capital raise to help with growth related to the openings of new micro hospitals, and improving financial metric reports to assist the operational team at the microhospitals with running their business.
Q: How do these align with the organization's overall mission and goals?
JB: All of the above feed into the overall plan of building solid profitable microhospitals that support the local communities. Additionally, our focused efforts to build independent physician association networks that will synergize with the microhospitals in their local area with business.
Q: What are the biggest financial challenges facing your health system today? Conversely, what are the most promising financial opportunities?
JB: Revenue reimbursement from commercial and government payers [is the biggest challenge]. Opportunities to acquire other hospitals that are not in a position to handle the latest reimbursement reductions put in place because of the No Surprises Act. There are massive growth opportunities because of huge demands for microhospitals both nationwide and worldwide.
Q: How is your system leveraging technology and digital health platforms to enhance patient care, improve operational efficiency and generate revenue?
JB: We are working with our revenue cycle software vendor to streamline the coding, billing and collections process to improve our internal operational processes both within the hospital (while with patients) and outside the hospital (via phone follow up with patients and payers). The end goal is to improve the patient experience and get patient revenue on a more timely and accurate basis.
Q: What partnerships, joint ventures, mergers or acquisitions is your system exploring to strengthen its financial position or expand service offerings?
JB: We are looking at several hospital purchases as well as population health businesses to help integrate that business around our hospitals. We are also adding more service lines such as medical detox and psychological evaluations to supplement revenue growth.
Q: Given the unpredictability of events like global pandemics, what are you doing to ensure financial resilience and sustainability in the face of unforeseen challenges?
JB: We are active in the financial markets looking to close a substantial capital raise that will allow us to feed the growth of the hospital openings as well as to provide us excess funds in the bank in case of the unpredictable nature of the global markets.