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Fred Pennic, Editor-in Chief | HIT Consultant

Fred Pennic is the Founder and Editor-in-Chief of HIT Consultant.

Hospital Margins Dip to 0.9% in Q3 as Supply and Drug Costs Escalate

by Fred Pennic 09/08/2025 Leave a Comment

A new Strata Decision Technology report on the financial performance of U.S. hospitals and physician groups, drawn from monthly data from over 1,600 hospitals and 135,000 physicians, reveals that health system operating margins dipped to 0.9% in July 2025. While health systems continue to benefit from steady revenue growth, they face persistent pressures from rising expenses. - The report finds median year-to-date (YTD) health system operating margin was 0.9% in July, down from 1.2% in June, though it remained consistent with levels since January. For U.S. hospitals, the median change in operating margin rose 1.4 percentage points year-over-year (YOY) but slipped 0.2 percentage points month-over-month. Non-Labor Costs Drive Expense Growth The nation's hospitals continue to experience significant expense growth compared to 2024, with non-labor expenses rising faster than labor expenses. Total non-labor expenses increased by 8.7% from July 2024 to July 2025, while labor expenses rose by 5.3% over the same period. Overall, total expenses grew by 6.8% YOY. Supply and drug costs drove the largest increases, climbing by 10.6% and 9.5% respectively, compared to July 2024. This trend is expected to continue as the industry feels the impacts of federal tariffs. Non-labor expenses grew YOY across all regions, with hospitals in the South reporting the largest increase at 9.5%. Outpatient Revenue Leads Growth Hospitals reported continued strength in gross revenues, marking the 27th consecutive month of YOY growth. Outpatient revenue posted the largest YOY gain, rising by 12.0% from July 2024 to July 2025. Inpatient revenue increased by 7.2%, while gross operating revenue grew by 10.6% over the same period. Patient demand was mixed but trended upward overall. Outpatient visits posted the strongest gains, rising by 6.6% compared to July 2024, as patient care continues to shift to more convenient and lower-cost outpatient settings. For example, outpatient upper gastrointestinal endoscopy saw a 21.2% YOY increase, and routine outpatient diagnostic echocardiograms were up by 20.9%. Physician Practices Face Mounting Expenses Physician practices also faced mounting expenses, with per-physician expenses rising for practices across all regions. The median per-physician expense reached a national median of $1.1 million annualized in July, up 6.9% from 2024 and 16.6% compared to 2023. Meanwhile, revenues rose as well, with the median net patient service revenue (NPSR) per physician FTE increasing by 4.7% over 2024. Physician productivity also improved, while support staffing levels declined. For more information about the repot, visit here.

What You Should Know:  - A new Strata Decision Technology report on the financial performance of U.S. hospitals and physician groups, drawn from monthly data from over 1,600 hospitals and 135,000 physicians, reveals that health system operating margins dipped to 0.9% in July 2025. While health systems continue to benefit from steady revenue growth, they face persistent pressures from rising expenses. - The report finds median year-to-date (YTD) health system operating margin was 0.9%
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Phreesia to Acquire AccessOne for $160M to Expand Healthcare Payment Solutions

by Fred Pennic 09/08/2025 Leave a Comment

Phreesia to Acquire AccessOne for $160M to Expand Healthcare Payment Solutions

What You Should Know:  - Phreesia, Inc., a company specializing in patient activation, has entered into a definitive agreement to acquire AccessOne Parent Holdings, Inc., a portfolio company of Frontier Growth.  - The all-cash transaction is valued at $160M and is expected to close in the third or early fourth quarter of Phreesia’s 2026 fiscal year. AccessOne Background  AccessOne is a market leader in providing financing solutions for healthcare receivables, working
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Hello Patient Raises $22.5M to Scale Conversational AI for Patient Communications

by Fred Pennic 09/05/2025 Leave a Comment

Hello Patient Raises $22.5M to Scale Conversational AI for Patient Communications

What You Should Know:  - Hello Patient, a conversational AI company secures $22.5M in Series A financing led by Scale Venture Partners with participation from 8VC, Bling Capital, Max Ventures, Remus Capital, and FirstLook Partners. - The Hello Patient platform handles end-to-end patient conversations across voice, text, and chat, helping healthcare practices run leaner, grow faster, and deliver better care. With this new funding, the company plans to continue expanding its product
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Revalia Bio Launches ‘Human Data Trials’ with $14.5M to Transform Drug Development

by Fred Pennic 09/05/2025 Leave a Comment

Revalia Bio Launches 'Human Data Trials' with $14.5M to Transform Drug Development

What You Should Know:  - Revalia Bio Inc., a new pre-clinical research company secures $14.5M in seed funding round to support the launch of its "Human Data Trials". - The funding was co-led by America's Frontier Fund and Sierra Ventures, with participation from Roger Ferguson, former Vice Chair of the U.S. Federal Reserve, and other existing investors. This brings Revalia's total funding to $19.5M. A New Paradigm for Pre-Clinical Research The investment comes at a crucial time
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HealthEdge and UST HealthProof Merge to Modernize Health Plans

by Fred Pennic 09/05/2025 Leave a Comment

HealthEdge and UST HealthProof Merge to Modernize Health Plans

What You Should Know:  - HealthEdge and UST HealthProof have announced the successful completion of their merger, following Bain Capital's acquisition of UST HealthProof from UST.  - The combined company will operate as HealthEdge, with its headquarters in Boston. With a reach that touches over 110 million lives in the U.S., HealthEdge is now positioned to empower health plans with modern, AI-enabled technology and services that can lower total costs and improve operational
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MCG Health and Avo Launch AI Assistant to Reduce Hospital Length of Stay

by Fred Pennic 09/05/2025 Leave a Comment

MCG Health and Avo Launch AI Assistant to Reduce Hospital Length of Stay

What You Should Know:  - MCG Health, a part of the Hearst Health network, and Avo, a clinician-created AI platform, have launched a new AI assistant designed to tackle the challenge of hospital length of stay (LOS).  - The partnership integrates recovery milestones from MCG's proprietary guidelines directly into electronic health record (EHR) workflows using Avo's new assistant. This tool gives hospitalists and case managers a real-time picture of each patient’s readiness to go
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HHS Announces Crackdown on Information Blocking to Empower Patients and Innovators

by Fred Pennic 09/04/2025 Leave a Comment

What You Should Know: - The U.S. Department of Health and Human Services (HHS) has announced a new initiative to increase resources dedicated to curbing the practice of "information blocking". - Secretary Robert F. Kennedy, Jr. has directed HHS to take active enforcement against healthcare entities that restrict patients’ access, exchange, and use of electronic health information. Empowering Patients and Innovators The announcement states Information blocking was not allegedly a priority under the Biden Administration, but that has changed under President Trump and Secretary Kennedy. The 21st Century Cures Act of 2016 authorized the Office of the Assistant Secretary for Technology Policy/Office of the National Coordinator for Health IT (ASTP/ONC) and the HHS Office of Inspector General (OIG) to take enforcement actions to hold violators accountable. Deputy Secretary of Health and Human Services Jim O’Neill stated that unblocking the flow of health information is "critical to unleashing health IT innovation and transforming our healthcare ecosystem". Many patients rely on access to their health information to monitor chronic conditions, adhere to treatment plans, and find errors in their records. According to Acting Inspector General Juliet T. Hodgkins, providers and certain health IT entities have a "legal duty" to ensure that information flows where and when it's needed. She added that the HHS-OIG will use all available authorities to investigate and hold violators accountable. Dr. Tom Keane, Assistant Secretary for Technology Policy and National Coordinator for Health Information Technology, noted that ASTP/ONC has already begun reviewing reports of information blocking and is providing technical assistance to the OIG for investigations. Consequences of Non-Compliance The announcement serves as a warning to those still engaging in information blocking. The consequences for violators can be substantial: For healthcare providers: They could be subject to disincentives under certain CMS programs. For certified health IT developers, health information networks, or health information exchanges: They could face a civil monetary penalty of up to $1M per violation. Their certifications could also be terminated, and they could be banned from the Certification Program. The announcement is also a call to action for patients, providers, payers, and health IT companies to report alleged information blocking through ASTP/ONC’s Report Information Blocking Portal.

What You Should Know:  - The U.S. Department of Health and Human Services (HHS) has announced a new initiative to increase resources dedicated to curbing the practice of "information blocking".  - Secretary Robert F. Kennedy, Jr. has directed HHS to take active enforcement against healthcare entities that restrict patients’ access, exchange, and use of electronic health information. Empowering Patients and Innovators The announcement states Information blocking was not
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Parasym Launches Nuropod, a Non-Invasive Vagus Nerve Stimulation Device

by Fred Pennic 09/04/2025 Leave a Comment

Parasym Launches Nuropod, a Non-Invasive Vagus Nerve Stimulation Device

What You Should Know:  - Parasym has launched Nuropod, the first ear-based, clinically studied vagus nerve stimulation (VNS) device in the U.S. that does not require surgery.  - The wearable device is designed to reduce symptoms such as persistent fatigue, anxious states, and markers related to inflammation by activating the vagus nerve to restore the body’s "rest and digest" state. The device is backed by more than 50 completed clinical studies. A Non-Surgical Alternative
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Prominence Advisors Acquires Tegra Analytics to Unify Healthcare and Life Sciences Data

by Fred Pennic 09/04/2025 Leave a Comment

Prominence Advisors Acquires Tegra Analytics to Unify Healthcare and Life Sciences Data

What You Should Know:  - Prominence Advisors, a leader in healthcare data enablement, has announced its acquisition of Tegra Analytics, a life sciences analytics consultancy. The acquisition extends Prominence's data enablement platform into the life sciences sector, strengthening its services across providers, payers, and life sciences organizations. - The acquistion will bring together expertise from both healthcare and life sciences, along with industry-leading customer service.
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Epic Launches Comet: A New AI Platform to Predict Patient Health Journeys

by Fred Pennic 09/03/2025 Leave a Comment

Epic Launches Comet: A New AI Platform to Predict Patient Health Journeys

What You Should Know:  - Today, Epic announced the launch of a new form of healthcare intelligence, named Comet, developed to help clinicians, health systems, and patients make more informed decisions.  - Built on Epic Cosmos, a secure data platform, Comet is designed to predict what is likely to happen next in a patient’s journey by estimating disease risk, length of stay, and treatment outcomes. The platform has learned from more than 100 billion patient medical events to
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