This article is sponsored by BMO Bank. In this Voices interview, Behavioral Health Business sits down with Imran Javaid, Managing Director, Healthcare Finance Group, BMO Commercial Bank, to talk about whether the industry is prepared to handle the new federal requirements for 24/7 RN coverage in the face of labor shortages, inflation and pandemic recovery. He shares his perspective on the likelihood of the industry rule on RN coverage still being amended or put on hold, especially in light of the U.S. presidential election. He also explains how this shift will impact providers and rules around eligibility or care.
Behavioral Health Business: What life and career experiences do you most draw from, in your role today?
Imran Javaid: I started my career in public accounting before moving into finance at a private equity group. When it was time for a change, I was fortunate enough to find a commercial finance company that was just beginning to establish its health care group and I have been lending in the industry since that time.
Given that background, I’ve always been interested in figuring out where the smart money is and identifying the best deals instead of just focusing on metrics. Over the past 15 years, I have transitioned to lending at commercial banks. At commercial banks, there’s a lot more specificity around what meets our lending criteria, but I’m always looking for creative ways to get deals done when I believe in a product.
What is the likelihood of the industry rule on RN coverage still being amended or put on hold, especially in light of the election results?
I think there were several rules that were expected to be implemented over the next few years that weren’t ideal for the industry. The general outlook is that they’ll either be rolled back significantly or won’t be implemented at all. Specifically, most people expect that some rules such as the mandatory RN rule for SNFs and others are expected not to move forward. The belief is that some of these challenging staffing rules, given the election results, will likely not go into effect, which is good news for the industry.
Given the election results, do you expect any changes to the ability to bring overseas nurses to the US?
Yes, I think this is an issue that transcends politics. While some topics during the election cycle focused on immigration challenges—largely around unskilled labor and border security—this goes beyond political lines. We need skilled labor in this country, and there have been programs in place for bringing overseas nurses here for some time.
I don’t anticipate major changes, either positively or negatively, in the ability to do that. However, various industry groups, particularly in health care, have lobbied for more opportunities to bring RNs and other skilled workers to the US amidst the ongoing shortage.
While some reports, like the Mercer Group report, suggest there could be enough RNs by 2028, I’m skeptical given the increased demand in services with an aging population. Local shortages in rural areas are a major issue, and there will continue to be a broad demand for nursing programs. I don’t expect significant changes to these efforts in the near term.
Looking at the impact on providers with Medicare Advantage plans, will there be any changes to rules around eligibility or care?
I expect Medicare Advantage enrollment to be stable for the near future, maybe, with a slight increase, but not as dramatic as in the increases of recent years. Medicare Advantage has been supported through three different administrations, so I expect that to continue. Unfortunately, an increase in Medicare Advantage enrollment has put additional pressure on providers.
Ultimately, the providers that succeed in any sub sector will be those who deliver high-quality care at the lowest possible cost. That’s the dynamic Medicare Advantage forces, even if the pendulum sometimes swings too far.
I think this dynamic will balance out over time. Medicare Advantage plans need strong providers who can deliver high-quality care if they plan to sustain an impactful system.
How can BMO’s partnership approach help providers better navigate today’s changing payment landscape?
We delve deep beyond basic metrics like EBITDA. Certainly, EBITDA is important, but we go beyond the numbers to understand the operational reasons behind a facility or group’s performance, identifying the key drivers and the changes they’ve implemented.
For us, getting to know our potential borrowers and existing borrowers is key—it’s what differentiates our approach entirely. At BMO, the people working on health care deals focus exclusively on health care, so they truly understand the challenges providers face and are accustomed to navigating what they’re going through.
Finish this sentence: “In the behavioral health space, 2025 will be defined by…”
…continued growth and acceptability of behavioral health, driven by lower costs and higher quality outcomes. That will be the winning formula in 2025.
Editor’s note: This article has been edited for length and clarity.
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For more information, please contact Imran Javaid, [email protected].
The Voices Series is a sponsored content program featuring leading executives discussing trends, topics and more shaping their industry in a question-and-answer format. For more information on Voices, please contact [email protected].
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