The New Economics of Healthcare Providers in the AI Era

Transcript

Chapter 1: Introduction

0:21 | 21 seconds

Rohan Kulkarni: Welcome to HFS Unfiltered. My name is Rohan Kulkarni, and I’m joined this morning by Titus Leo, who leads the healthcare provider business at Sagility. Welcome, Titus.

0:31 | 31 seconds

Titus Leo: Thank you so much for having me.

Chapter 2: The Horizons Study and an Inflection Point in Healthcare

0:33 | 33 seconds

Rohan Kulkarni: HFS recently published the HFS Horizons Healthcare and Life Sciences Provider Services 2026 study, which evaluated 50 service providers

0:42 | 42 seconds

Rohan Kulkarni: for their ability to impact the cost of care, the experience of care, health outcomes and health equity — the quadruple aim of care.

0:50 | 50 seconds

Rohan Kulkarni: This study reflects an inflection point in global healthcare: the reduction of public health funding worldwide,

0:57 | 57 seconds

Rohan Kulkarni: particularly in the US, on the heels of the One Big Beautiful Bill, the Medicare sequestration that’s going on and the ACA subsidy expiration. All of this will corrode all four elements of the quadruple aim of care.

1:10 | 1 minute, 10 seconds

Rohan Kulkarni: Both healthcare enterprises and consumers are already beginning to hurt. Yet care delivery enterprises — including health systems, hospitals and ASCs,

1:19 | 1 minute, 19 seconds

Rohan Kulkarni: as well as independent physician practices — will be obliged to care for their communities,

1:25 | 1 minute, 25 seconds

Rohan Kulkarni: which are aging with comorbidities and facing costs of care that are rising at a rate two to three times that of nominal inflation.

1:36 | 1 minute, 36 seconds

Rohan Kulkarni: In the context of these unprecedented headwinds, healthcare provider enterprises and service providers must begin to craft a new roadmap, given that the old roadmap is

1:46 | 1 minute, 46 seconds

Rohan Kulkarni: destined for failure across the quadruple aim dimensions of finance, experience, health and equity, or market access.

1:55 | 1 minute, 55 seconds

Rohan Kulkarni: So, coming out of the study, HFS submits three roadmap ideas that emerged from the insights we were able to capture.

Chapter 3: Roadmap 1: Escaping Value-Based Care with Direct-to-Employer Capitation

2:06 | 2 minutes, 6 seconds

Rohan Kulkarni: Number one: health systems must escape the value-based care theater with direct-to-employer capitation. Fee-for-service is unsustainable,

2:15 | 2 minutes, 15 seconds

Rohan Kulkarni: and value-based care has long been dead from our standpoint. Health systems and healthcare providers must find new, predictable revenue streams

2:23 | 2 minutes, 23 seconds

Rohan Kulkarni: with higher-margin pathways. That can be realized with offerings that address self-insured employers.

2:29 | 2 minutes, 29 seconds

Rohan Kulkarni: This approach will help providers reduce their dependence on commercial insurance and government programs such as Medicare and Medicaid, which will only become even

2:38 | 2 minutes, 38 seconds

Rohan Kulkarni: more administratively burdensome — and may be hard to patch at this point — even as reimbursement rates continue to shrink.

2:46 | 2 minutes, 46 seconds

Rohan Kulkarni: Directly addressing self-insured employers will therefore be a win-win, creating predictable, higher-margin revenues for healthcare providers.

Chapter 4: Roadmap 2: Stop Dancing in the Shadows on Self-Pay

2:54 | 2 minutes, 54 seconds

Rohan Kulkarni: Number two: providers must stop dancing in the shadows and aggressively exploit discounted self-pay options. Look, every failed prior authorization

3:03 | 3 minutes, 3 seconds

Rohan Kulkarni: is an opportunity for providers to lean into self-pay options that improve cash flow at a higher margin, with essentially no administrative burden.

3:12 | 3 minutes, 12 seconds

Rohan Kulkarni: The math is quite compelling, given that 90% of consumers enrolled in high-deductible health plans

3:20 | 3 minutes, 20 seconds

Rohan Kulkarni: pay 100% of their non-preventive care out of pocket because they never really meet their annual deductibles.

3:27 | 3 minutes, 27 seconds

Rohan Kulkarni: Consider this in the context of the fact that 33% of US lives — or more than 100 million people — are in HDHPs, with an average single deductible

3:37 | 3 minutes, 37 seconds

Rohan Kulkarni: of close to $2,000. Those figures have significant financial implications.

3:41 | 3 minutes, 41 seconds

Rohan Kulkarni: And lastly, AI must inspire a proactive care delivery paradigm. Waiting for me to get sick is too late and too expensive.

Chapter 5: Roadmap 3: AI and Proactive Care Delivery

3:50 | 3 minutes, 50 seconds

Rohan Kulkarni: I think the math out there suggests that every year of delay in the onset of diabetes translates into about $16,000 in annual savings, $3,000 for hypertension, and the list goes on.

4:01 | 4 minutes, 1 second

Rohan Kulkarni: Health systems must embrace a connected ecosystem of technologies and devices available in the market, at scale and increasingly AI-enabled,

4:09 | 4 minutes, 9 seconds

Rohan Kulkarni: to become truly intelligent and capable of preventing disease, delaying its progression and managing it more effectively. And yes, of course, the payment models will definitely need to change.

4:20 | 4 minutes, 20 seconds

Rohan Kulkarni: Those are some of the insights we captured from our study. So, Titus, please reflect on the study from a Sagility standpoint,

Chapter 6: Sagility’s Read: Margin Pressure and Outcome-Based Models

4:29 | 4 minutes, 29 seconds

Rohan Kulkarni: given the fact that you were recognized as a market leader. What stood out, and what are the top three takeaways for you?

4:38 | 4 minutes, 38 seconds

Titus Leo: Thanks, Rohan. The study was very insightful. It validated many of our perspectives while also highlighting several emerging trends that warrant close attention.

4:50 | 4 minutes, 50 seconds

Titus Leo: As you mentioned, providers continue to face significant reimbursement pressures, including an increase in denials and a reduction in reimbursement rates,

4:58 | 4 minutes, 58 seconds

Titus Leo: along with persistent cost inflation. This is really compressing their operating margins.

5:03 | 5 minutes, 3 seconds

Titus Leo: In this environment, global delivery models, combined with aggressive adoption of technology and AI-driven efficiencies, will be critical to helping providers

5:13 | 5 minutes, 13 seconds

Titus Leo: improve their financial performance and remain competitive. I think your study captured these dynamics exceptionally well from Sagility’s point of view.

5:24 | 5 minutes, 24 seconds

Titus Leo: It reinforces another important trend that you also outlined. While demand for revenue cycle services will continue to grow,

5:31 | 5 minutes, 31 seconds

Titus Leo: commercial models are increasingly shifting from traditional FTE-based models toward outcome-based models. We are seeing this in all our conversations. These trends are playing out in our discussions with both existing clients and prospective customers.

5:47 | 5 minutes, 47 seconds

Titus Leo: Organizations are increasingly seeking partners who can deliver measurable business outcomes rather than just capacity, and that has been our focus at Sagility as well.

5:57 | 5 minutes, 57 seconds

Titus Leo: A lot of our existing contracts are tied to outcomes, and we always like to have skin in the game. That has been our approach,

6:06 | 6 minutes, 6 seconds

Titus Leo: and we know increasingly that this will be a requirement rather than simply something we would like to do.

Chapter 7: Direct Contracting: The Trend Titus Didn’t See Coming

6:13 | 6 minutes, 13 seconds

Titus Leo: The third thing was the trend of self-insured employers, which you called out in your report, increasingly pursuing direct contracting

6:22 | 6 minutes, 22 seconds

Titus Leo: arrangements with providers. That was particularly interesting and a bit intriguing. It’s not something I’d really thought about, and I think it is something we need to pay more attention to.

6:32 | 6 minutes, 32 seconds

Titus Leo: As this model of direct contracting starts to gain traction, service providers like us will have to evolve our offerings to support providers in these kinds of initiatives.

6:45 | 6 minutes, 45 seconds

Titus Leo: I do think direct contracting has the potential to reduce many of the administrative complexities that currently exist in the traditional

6:54 | 6 minutes, 54 seconds

Titus Leo: payer-provider relationship. I’m sure there will continue to be opportunities to provide operational, financial and analytical support. As you called out, this is a

7:03 | 7 minutes, 3 seconds

Titus Leo: wide space in your report — one where service providers are not currently very focused.

7:08 | 7 minutes, 8 seconds

Titus Leo: As these models start to mature, capabilities such as contract performance analytics, increased patient engagement, care coordination,

7:19 | 7 minutes, 19 seconds

Titus Leo: and revenue and cost optimization will become very important areas where experienced RCM providers like Sagility can add meaningful value.

7:28 | 7 minutes, 28 seconds

Titus Leo: I think these are some of the things I took away from the report, and we’ll definitely be looking at them very closely in the months and years ahead as we focus on these areas.

Chapter 8: What’s Next: Clinical Denials as the Differentiator

7:40 | 7 minutes, 40 seconds

Rohan Kulkarni: Very cool. And just along those lines, Titus, what’s next for the Sagility healthcare provider business?

7:48 | 7 minutes, 48 seconds

Rohan Kulkarni: What do you think will differentiate Sagility, and where do you see the greatest opportunity to make a visible impact going forward?

7:58 | 7 minutes, 58 seconds

Titus Leo: We’ll definitely build on our strengths. We’ll continue to expand and strengthen our clinical denials capability, which remains a key differentiator for Sagility.

8:06 | 8 minutes, 6 seconds

Titus Leo: We have more than a decade of deep clinical expertise across the provider and payer segments, so we are uniquely positioned to deliver superior outcomes.

8:14 | 8 minutes, 14 seconds

Titus Leo: We have also developed a suite of AI- and GenAI-enabled solutions that enhance the accuracy, efficiency and effectiveness

8:21 | 8 minutes, 21 seconds

Titus Leo: of our clinical and coding denials management. We will continue to invest in these capabilities to further improve recovery rates,

8:29 | 8 minutes, 29 seconds

Titus Leo: accelerate denial resolution and deliver greater value for our clients. We are well along that journey, and we’ll continue to focus on it.

8:38 | 8 minutes, 38 seconds

Titus Leo: In line with your observations on the transformative impact of AI on the revenue cycle, we have been preparing for this fundamental shift through continued investment

Chapter 9: Synchrony and Agentic Orchestration Across the Revenue Cycle

8:48 | 8 minutes, 48 seconds

Titus Leo: in our Synchrony RCM lifecycle platform. We are working on orchestrating a network of AI agents across the revenue cycle continuum to help drive greater automation, intelligence and operational efficiency.

9:01 | 9 minutes, 1 second

Titus Leo: These capabilities are designed primarily to improve financial and clinical outcomes and enhance revenue for our clients,

9:10 | 9 minutes, 10 seconds

Titus Leo: while also generating cost savings. We are well along that journey and will be increasing our focus on it. I think your report added credence to the need for us to keep moving in that direction.

Chapter 10: Patient Engagement, BirchAI and Early-Out Collections

9:24 | 9 minutes, 24 seconds

Titus Leo: The third area that I think differentiates us, and which we will continue to build on, is our deep patient

9:31 | 9 minutes, 31 seconds

Titus Leo: engagement capability. We have more than 22 years of experience interacting with patients across the care continuum, on both the payer and provider sides.

9:42 | 9 minutes, 42 seconds

Titus Leo: This strong foundation is something we are going to build on. We have also infused AI and GenAI capabilities into our engagement platform,

9:52 | 9 minutes, 52 seconds

Titus Leo: through a combination of in-house innovation and strategic acquisitions, including the BirchAI acquisition, which we discussed earlier, and what it brings to the broader engagement management space.

10:04 | 10 minutes, 4 seconds

Titus Leo: We are also piloting AI agents to autonomously manage lower-complexity patient interactions. At this point,

10:11 | 10 minutes, 11 seconds

Titus Leo: the focus is on eliminating some of the low-hanging fruit and enabling our teams to focus on higher-value engagement. That is something we are very consciously working toward, and we believe we will be able to advance it significantly.

10:24 | 10 minutes, 24 seconds

Titus Leo: We think all these advancements will significantly enhance two key areas we are focusing on. One is, of course,

10:31 | 10 minutes, 31 seconds

Titus Leo: patient engagement, customer service and contact center capabilities; the other is early-out collections. These are the two areas we are focusing on.

10:40 | 10 minutes, 40 seconds

Titus Leo: We are very confident that we can deliver better outcomes and improve the patient experience, which is very important, while also delivering better outcomes and lower costs for our clients.

10:49 | 10 minutes, 49 seconds

Titus Leo: These are some of the key focus areas. Of course, the bread and butter — end-to-end RCM and the

10:58 | 10 minutes, 58 seconds

Titus Leo: full range of services — remains a focus and will be significantly enhanced with AI and GenAI orchestration. But these two other areas are also receiving significant attention.

Chapter 11: Close

11:10 | 11 minutes, 10 seconds

Rohan Kulkarni: Very cool. Yeah, absolutely, Titus. I do think you are well positioned

11:16 | 11 minutes, 16 seconds

Rohan Kulkarni: to bring our Services-as-Software to life at the intersection of your clinical RCM and agentic AI, especially with Synchrony in play.

11:27 | 11 minutes, 27 seconds

Rohan Kulkarni: Wonderful conversation. Thank you very much for your insights. I really appreciate it.

11:27 | 11 minutes, 27 seconds

Titus Leo: Thank you very much, Rohan. Great talking to you.