Of industries monitored in the Bureau of Labor Statistics’ industry classifications (NAICS), healthcare is unique: its business model is based on business to business (B2B) transactions between suppliers (drugs, devices, technology, hospitals, ancillary facilities), intermediaries (GPOs, PBMs, insurers, brokers) and retail distributors (physicians, pharmacists, therapists, et al) in which end-users (consumers) have limited influence and unpredictable financial responsibility. The acceptance of low health literacy is institutionalized in state and federal regulatory oversight, labor rules and scope of practice determinations and funding by private investors, public appropriations, employer contributions and out-of-pocket payments by consumers. Its acceptance is inconsistent with aims to make it more accessible, affordable and effective.
The issue: low health literacy
Health literacy is defined as “the degree to which individuals have the capacity to obtain, process, and understand basic health information and services needed to make appropriate health decisions” (Healthy People 2020, Ratzan and Parker, 2000, vi). It’s measured by gauging an individual’s comprehension of medical terms and phrases, effectiveness in navigating the health system, adherence to treatment instructions, self-care decisions about prevention, interventions and insurance needs, and overall confidence in managing health-related circumstances (Milkin Institute 2022). Studies show 88% of the U.S. population is health illiterate costing the system at least $250 billion annually (CDC). Older, low-income, under-educated and non-English proficient populations are cohorts in which health illiteracy is highest but it’s problematic in all. Regretfully, efforts to increase health literacy like the National Action Plan to Improve Health Literacy and CDC public health outreach programs have produced only marginal improvements.
Low health literacy is hardwired into just about every transaction in healthcare: because medical care is complicated and always changing, intermediaries who act on behalf of end-users (consumers) are needed because individuals are thought to be incapable of understanding how it operates and ill-prepared to make appropriate decisions about their own health. TV ads for prescription drugs push brand awareness but advise “call your doctor”. Recent price transparency disclosures for hospitals, insurers and drug companies have had marginal impact on health literacy to date. Likewise, public interest in grading systems by Leapfrog, HealthGrades, US News and others remains high. And CMS has not seen fit to directly link provider success in its alternative payment models and increased health literacy in attributed populations. So, despite increased government and private sector efforts to engage consumers more directly, increased health literacy is not evident.
The opportunity: systemic health literacy improvement
Efforts to increase health literacy need attention in four key areas:
- Workforce: The healthcare workforce is 18-million plus. But literacy even among its workers remains low. Physicians receive inadequate training (20 hours in 4-year UGME and 1-3 days across 3–7-year residences). Continuing education (CME, CNE, CPU et al) for health literacy skill-building is sparse and often narrowly focused. And hourly workers along with unpaid caregivers lack access to virtual tools necessary to real-time assistance with the individuals they serve and their own families.
- Education: The U.S. education system does not consider health literacy a necessary competence nor does it require proficiency among its classroom instructors. The U.S. Departments of Education, Agriculture and Health & Human Services should collaborate with state and local governments to expand, create and install curricula at every level of instruction. Recess, healthy food choices, on-site clinics, mental health support and vacation policies are not substitutes for targeted health literacy programs.
- Hospitals: Hospitals, especially not for profit and government-owned organizations, bear unique responsibility for community health and wellbeing. Tax exemptions and government appropriations are directly linked to these efforts. But health literacy efforts to increase health literacy have been limited to public education about specified clinical conditions (i.e. heart failure) and health fairs. Hospitals should be required to invest in comprehensive health literacy programs as a condition of Medicare eligibility—that’s a start.
- Technology: The health system’s future is dependent on technology-enablement to equip care givers and individuals to operate efficiently and choose wisely. Currently, technologies are geared primarily to making the system operate better to reduce its costs and align its treatments with medical necessity. Facilitating consumer navigability is a secondary consideration for most. Enabling health literacy is its most strategic contribution. Contracts between tech suppliers and payers, providers et al should be predicated on measurable improvements in health literacy by consumers.
For too long, health literacy has been relegated to discussions among public health officials. Its neglect is harmful to every organization in healthcare and to its long-term sustainability. Boards should weigh in, and policymakers should act. Health literacy can ill-afford being out of sight, out-of mind in the U.S. health system and in the society we serve.
Paul
Sections in today’s Report
- Quotables
- Health Economy
- Hospitals
- Insurers
- Physicians
- Polling
- Population Health
- Prescription Drugs
- Regulation
Resources
Focus Areas – Center for Health Care Strategies
HEALTH LITERACY IN THE UNITED STATES Enhancing Assessments and Reducing Disparitiemilkeninstitute.org/sites/default/files/reports-private/2026-03/Health_Literacy_United_States_Final_Report.pdf
Health Literacy Activities by State | Health Literacy | CDC
March 2026 Report to the Congress: Medicare Payment Policy March 12, 2026
Quotables
MedPAC Payment Policy annual report recommendations for 2027: “In this report, we make recommendations aimed at supporting access to high-quality care for Medicare beneficiaries while giving providers incentives to constrain their cost growth and thus help control program spending. For 2027, we recommend FFS payment updates above current law for physician and other health professional services; the payment update specified in current law for acute care hospitals; no payment update for outpatient dialysis providers and hospice providers; and payment reductions for skilled nursing facilities, home health agencies, and inpatient rehabilitation facilities. We also recommend targeting additional resources to Medicare safety-net hospitals (as well as redistributing current disproportionate share and uncompensated-care payments).”
March 2026 Report to the Congress: Medicare Payment Policy March 12, 2026
Pearl on clinical AI: “GenAI has helped with administrative tasks (documentation, billing, coding, etc.), but it has not yet reshaped clinical practice or bent the cost curve. In fact, despite signs that GenAI is driving efficiency in most U.S. industries, medical spending continues to climb.
We know that GenAI’s capabilities are advancing far more rapidly than earlier AI tools. And because of that power, I believe the next two years could produce 10 years of progress.”
Monthly Musings March 2026 app.flashissue.com/newsletters/d4f21b3331d7e2277479fe9d4d5a575e88c95b5e
Axios on silent majority: “Watch TV, scroll social media or listen to politicians, and the verdict seems clear: Americans are hopelessly divided and increasingly hateful…
Most Americans are too busy for social media, too normal for politics, too rational to tweet. They work, raise kids, coach Little League, go to a house of worship, mow their neighbor’s lawn — and never post a word about any of it. This isn’t a small minority. It’s a monstrous, if silent, majority. Most Americans are patriotic, hardworking, neighbor-helping, America-loving, money-giving people who don’t pop off on social media or plot for power.. Most people agree on most things, most of the time. And the data validates this, time and time again. The bottom line: The next time your screen tells you America is broken, close it. Walk outside. Talk to your neighbor. Coach the team. Go to the town meeting. That’s the real America — and it’s a hell of a lot better than the one being manufactured for clicks, clout and cash.
1 big thing: America’s big lie Axios March 11, 2026 https://www.axios.com/newsletters
The Atlantic on Federal spending: “The contracting swamp we have today emerged through previous attempts to streamline government by cutting the federal workforce. All such efforts ended the same way: a modest number of layoffs among public workers combined with a dramatic expansion of private-sector contracting. In fact, our postwar history shows that federal spending has ballooned while the size of the federal workforce has remained almost static: In 1946, the government employed about 2.5 million workers and ran a budget of $628 billion (in today’s dollars); in 2023, it had only half a million more workers, but its budget stood at $4.6 trillion…
Rather than inviting billionaires to demonize the civil service, the true solution to government inefficiency is to reverse outsourcing. Severing private contractors and hiring more public servants would allow the state to cut time spent managing contractors and devote more resources to the actual work of government. Relaxing hiring regulations could help agencies hire bright and enthusiastic talent, as could raising pay for federal employees. Instead of dismantling the federal workforce, we should put the contracting system in the wood chipper.”
The Government Waste DOGE Should Be Cutting – The Atlantic
Lemann on higher education:” The premise of the great American universities today is a difficult one, to say the least: that they can be fantastically selective (but in a completely fair way), offer their students and faculty access to the most prestigious and well-rewarded precincts of American society, relentlessly increase their costs, assure the world that they are devoted to public service and social justice, and win the public’s grateful appreciation for being among our country’s most successful institutions. Trump, with his unerring talent for exploiting vulnerabilities in the liberal order, took full advantage of these contradictions and has caused enormous damage. It is going to be hard to undo. The golden era of autonomy for universities is probably not going to return. “
Nicholas Lemann, The Unmaking of the American University The New Yorker March 9, 2026 https://www.newyorker.com/magazine/2026/03/16/the-unmaking-of-the-american-university
Barnes on AI-enabled self-care: “The warning in Risky Business is appropriate, though, given how the traditional health care system’s livelihood is giving way to the proliferation of consumer self-help products. For example, Microsoft just launched the consumer-facing Copilot Health to help people interpret symptoms and understand lab results (see a new analysis of over 500,000 health-related user inquiries). ARPA-H just launched Delphi, a well-funded multi-year initiative to make sure Americans have access to affordable biosensor devices that continuously monitor a range of things like inflammation and hormone changes. And re-read the news above from CVS Health and Sword Health about consumer health help. There is no stopping this shift, which is why a team of medical professionals announced plans to develop “The Health Chatbot Users’ Guide.” The guide will hopefully do a little better than the advice Tom Cruise’s “mother” gives in Risky Business: “Just use your best judgment. We trust you.”
Only What Matters on Health Information Policy
Health Economy
Pitchbook: Healthcare IT PE surges in 2025: “Healthcare IT PE activity remained strong in H2 2025, capping off a year of resilient dealmaking across the sector. Full-year deal value climbed 23.9% to $43.4 billion—the second-highest total on record—while the estimated H2 deal count rose 15.9% year over year. Although AI-driven enthusiasm in H2 moderated from earlier in the year, investors continued to back scaled, workflow-embedded platforms with automation and revenue cycle management (RCM) exposure…
Among the healthcare IT segments, analytics & value-based care posted standout growth in 2025, with deal count up more than 100%, fueled by population health & clinical analytics and point-of-care tools. Managed care activity slowed in H2, while valuation multiples moderated into the high-teens to low-20s EBITDA range for most healthcare IT assets. As AI-native RCM models gain traction and software-as-a-service valuations face pressure, 2026 could mark a pivotal year for healthcare IT PE—particularly in cost containment and managed care platforms.”
H2 2025 Healthcare IT PE Update Pitchbook March 10, 2026 https://pitchbook.com/news/reports/h2-2025-healthcare-it-pe-update?
BLS’ CPI Report for February 2026: The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.3% on a seasonally adjusted basis in February, after rising 0.2% in January. Highlights: Over the last 12months, the all-items index increased 2.4% before seasonal adjustment.
“The index for shelter rose 0.2% in February and was the largest factor in the all-items monthly increase. The food index increased 0.4% over the month as did the food at home index, while the food away from home index rose 0.3%. The index for energy also increased in February, rising 0.6%.
The index for all items less food and energy rose 0.2% in February. Indexes that increased over the month include medical care, apparel, household furnishings and operations, airline fares, and education. Conversely, the indexes for communication, used cars and trucks, motor vehicle insurance, and personal care were among the major indexes that decreased in February.
The medical care index increased 0.5% in February, after rising 0.3% in January. The index for hospital services increased 0.6% over the month and the index for physicians’ services rose 0.3 %. Conversely, the prescription drugs index decreased 0.2 percent in February.”
Consumer Price Index Summary – 2026 M02 Results
NYT on economy: “Inflation in health care services, a major part of the economy, continues to play a role in hotter prices too. This Personal Consumption Expenditures index released Friday has been running slightly hotter than the more commonly cited Consumer Price Index. That divergence is largely the result of the fact that C.P.I. weighs housing inflation more heavily. And the rate of increases in rent has slowed as the overall economy has slowed.”
Consumer Prices Rose in January, Before Iran War Added Price Pressures – The New York Times
MedPage’ Brown on EPIC Health market power: “… Healthcare consolidation in hospitals and insurers has long drawn scrutiny because it diminishes competition, increases prices, and concentrates power. Yet, EHR vendors have quietly become some of the most powerful intermediaries in the healthcare ecosystem. With near-total control of how records are captured, stored, and exchanged, vendors like Epic operate with an authority that far outstrips any individual hospital or clinic.
Are we comfortable letting a single vendor or a small handful of vendors define the rules of engagement for interoperability, AI innovation, and clinical documentation? If Epic’s decisions become the baseline for how patient data must flow and how clinicians must document care, then we have arguably set up a system that prioritizes control over choice, dominance over density, and scale over safety and competition….
Regulators and providers should rethink how interoperability is governed, how clinical data exchange is overseen, how entrepreneurs can innovate, and how competitive markets are preserved in digital health infrastructure. True interoperability goes beyond moving wires and pipes that move data. Interoperability and accessibility have accountable governance and a marketplace where multiple solutions can thrive..”
Is Epic Too Big to Fail? | MedPage Today March 11, 2026
Hospitals
Strata data on hospital performance: ”Hospitals and health systems had a rocky start to 2026. Patient demand and revenue growth slowed while expenses intensified, leading to an operating margins dip…
- Margins hit 12-month low. Health system margins dropped to -0.6% from 1.3% in December, which was the biggest monthly decline over the last year. For most of last year, health system operating margins hovered above 1% and even reached 1.5% in November…
- Smallest and largest hospitals are under the most financial pressure. Hospitals with less than 100 beds reported a 3.9 percentage point margin drop while hospitals with 500-plus beds reported a 2.5 percentage point decrease. Hospitals in between reported less steep declines.
- Expense growth outpaced revenue.Total expenses increased 5.4% year over year in January while gross operating revenue rose 3.9%, leaving a significant gap for many organizations. Outpatient revenue jumped 4.4% while inpatient revenue increased a more moderate 2.5%.
- Non-labor and drug costs surged.Non-labor expenses drove expense growth, at 6.4%. Labor expenses increased an average of 4.9% year over year and drug expenses were up 6.8%. Supply expenses increased just 4.6% in January.
- Overall patient volume declined but select specialties are booming.Patient demand slowed, as inpatient admissions dropped 2.4% year over year and outpatient visits were down 2.5%. Emergency visits had the largest decline at 11.2% compared to the same period last year.
JAMA Study: Hospital use of biosimilars in cancer care: “Question: How have acquisition prices, reimbursement prices, and adoption of oncology biosimilars changed in recent years?
Findings: In 66,139 patients with cancer between 2020 and 2024, hospital acquisition prices for 3 oncology biosimilars declined more rapidly than reimbursement prices, leading to an increase in hospital margin revenues. The percentage share of biosimilars increased to 93% for bevacizumab, 87% for trastuzumab, and 84% for rituximab by 2024.
Meaning: Declining prices for oncology biosimilars have enabled hospitals to increase markup margins and have been associated with rapid increases in adoption.”
Hospital Adoption and Pricing for Oncology Biosimilars | Oncology | JAMA | JAMA Network
Related: JAMA Network commentary: “Hospitals’ adoption of biosimilars for three oncology biologics increased dramatically over a 5-year period, as did the facilities’ profit margins on the drugs, claims and drug acquisition data showed.
Adoption of the biosimilars at 1,541 hospitals increased from 18-37% in 2020 to 84-93% in 2024, coinciding with increased markup margins. The favorable impact on balance sheets resulted from a substantially slower decline in reimbursement for the biosimilars in comparison to the prices hospitals paid for the drugs.
For every additional dollar paid for biosimilars to bevacizumab (Avastin), trastuzumab (Herceptin), and rituximab (Rituxan), hospitals’ profit margins on the drugs increased by $1.82 to $2.72…”
Money Talks in Hospitals’ Adoption of Oncology Biosimilars | MedPage Today
STAT on Leapfrog Dispute: “What began as a spat between five Florida hospitals and a safety ratings group has grown into a First Amendment test with implications for any company involved in producing public ratings.
A federal judge found that The Leapfrog Group, an influential nonprofit known for its hospital quality and safety scores, violated Florida’s consumer protection law by unfairly penalizing hospitals that didn’t take its surveys. The judge ordered Leapfrog to withdraw its ratings on those hospitals and change its methodology for rating them, among other remedies.
The case centers on a change Leapfrog made to its rating methodology in 2024. Leapfrog gives hospitals an A through F letter grade based on 22 safety measures. Twelve of those measures come from survey data, and the rest come from data reported to Medicare. If hospitals don’t take the survey, eight of the metrics are left blank, and the remaining four are assigned to them. Before 2024, nonparticipating hospitals received the average score of participating hospitals on those four measures. After the change, hospitals received the lowest score among participating hospitals.
Leapfrog’s court loss exposes issues in hospital quality ratings | STAT
Hospital expenses grew twice as fast as prices in 2025: 4 AHA findings
AHA Cost of Caring Report: Hospital expense increase at half the rate of their prices: “Despite hospitals facing higher labor and input costs, treating more patients with greater clinical complexity, and maintaining essential, always-on services that communities depend on, they have managed to keep price increases below the increases in their input costs. However, this mismatch between expenses and revenue leaves hospitals increasingly at risk of being able to maintain the full spectrum of services on which communities rely.” Highlights:
- “American hospitals saw expenses grow 7.5% in 2025, more than twice the rate of growth in hospital prices that year. “
- Hospital drug expenses increased 13.6% in 2025, with spending on medical supplies up 9.9%. Academic medical centers also saw drug costs jump by 21.6% in the same period.
- Workforce costs (60% of total operating costs) jumped 5.6% in 2025 from the previous year.
- Hospitals spent $43 billion in 2025 by attempting to collect payments owed to them for providing care, including nearly $18 billion on overturning denied claims.
- Inpatient volumes rose 5.3% in 2025 and outpatient visits climbed 9.8% year over year.
- The AHA reported that hospital case-mix index, which measures patient sickness, increased around 5% from 2019 to 2024.
- Medicare reimbursed hospitals just 83 cents on the dollar in 2024, which resulted in more than $100 billion in underpayments. Additionally, 56.1% of hospital costs are tied to service lines where reimbursements fell short, or was less than, care delivery costs. Behavioral health held an all-payer payment-to-cost ratio of 74.5%.
Hospital expenses grew twice as fast as prices in 2025: 4 AHA findings
Study: Hospital lobbying expenditures: “Hospitals are major stakeholders in US health policy yet receive less scholarly attention than other health care industries, such as pharmaceuticals and health professionals…To characterize federal lobbying by the hospital industry in 2024, including health systems and hospital associations, and to examine the concentration of spending and use of internal vs external lobbyists…This descriptive cross-sectional study used 2024 federal lobbying disclosure data filed under the Lobbying Disclosure Act of 1995, compiled by OpenSecrets…”
Findings: “In 2024, 355 hospital-related organizations reported $116.13 million in federal lobbying expenditures. Hospitals and health systems accounted for $70.56 million (60.7%), with the remainder from hospital associations. Eighteen organizations spent more than $1 million, including 12 health systems and 6 hospital associations. For-profit and private equity–owned systems comprised 8.5% of all lobbying health systems but 27.8% of the highest spenders (5 of 18 organizations). However, overall for-profit and nonprofit spending mirrored their share of US community hospitals. Nearly all hospitals and health systems (283 of 295 organizations [94.9%]) employed external lobbying firms. Lobbying by for-profit systems was highly concentrated among a few large organizations, while nonprofit lobbying was diffuse…These patterns suggest lobbying influence is concentrated among well-resourced organizations and that not all hospitals have an equal voice in federal policymaking.”
Insurers
MedPAC MA Plan Overpayment: The federal government is expected to pay $615 billion to Medicare Advantage plans this year — 14% higher than if the 35 million beneficiaries were enrolled in fee-for-service Medicare–$76 billion more on privatized plans than it would have under traditional Medicare.
In 2024, the Centers for Medicare and Medicaid Services implemented a standard known as V28 to try to rein in MA spending by cutting off reimbursement for thousands of frequently misused codes.
Medicare Advantage payment gap narrows after V28: MedPAC – Modern Healthcare
Health Affairs commentary on high-deductible plans:” …the problems of high prices and complexity of health care cannot be solved by shifting responsibility to people through high-deductible plans linked to spending accounts. Evidence suggests going in the opposite direction to solve these problems: replacing deductibles with value-based cost sharing and having the government take on greater responsibility for lowering prices.”
Abandon—Don’t Expand—High-Deductible Plans Linked to Spending Accounts | Health Affairs
Physicians
MedPAC on 2027 physician payments: “Fee-for-service payments in 2027 for physicians who treat Medicare patients should be increased by 1.25% for those participating in advanced alternative payment models and 0.75% for other physicians, the Medicare Payment Advisory Commission (MedPAC).
However, because a temporary payment bump of 2.5% will have expired by 2027, the recommendation still amounts to a pay decrease: on net we expect our recommendation to result in 2027 payment rates for each group declining by 1.2% and 1.7%, respectively, relative to 2026 levels. These decreases would be smaller than what would otherwise occur under current law.”
The report noted that in its June 2025 report to Congress, the commission recommended an ongoing formula for increasing Medicare physician pay that would equal the annual increase in the Medicare Economic Index (MEI) — a measure of healthcare inflation — minus 1%.
March 2026 Report to the Congress: Medicare Payment Policy March 12, 2026
Polling
West Health-Gallup Poll: Affordability: “The West Health-Gallup Affordability Index indicates that Americans’ ability to afford healthcare has deteriorated in recent years. In 2026, millions are expected to face higher insurance premiums and rising out-of-pocket costs as the expiration of some Affordable Care Act subsidies and upcoming cuts to Medicaid enrollment threaten coverage. Collectively, these shifts could leave millions of Americans without health insurance at a time when financial stress is already running high…
In a nationally and state-representative survey of nearly 20,000 U.S. adults conducted from June through August 2025, roughly one-third of respondents — the equivalent of more than 82 million Americans — said they have made at least one trade-off with daily living expenses to afford healthcare…
These financial trade-offs are far more common among Americans who do not have health insurance, with 62% saying they have made at least one sacrifice to pay for healthcare, including 32% who have borrowed money and 24% who have prolonged medication.”
One-Third of Americans Cut Back to Cover Healthcare Expenses March 12, 2026 https://news.gallup.com/poll/702596/one-third-americans-cut-back-cover-healthcare-expenses.aspx
KFF Tracking Poll: Drug costs: Per the KFF Health Tracking Poll of U.S. adults conducted February. 24 – March. 2, 2026:
- 41% of U.S. adults say it is likely the Trump administration’s policies will lower prescription drug costs for people like them…
- 59% are worried about affording prescription drugs for themselves and their families, the largest share since KFF first polled this question in 2018. The shares of adults worried about their prescription costs are larger among adults in households with annual incomes less than $40,000 (67%) and those who take at least four prescription medications (64%).
- 43% say they have not taken their medication as prescribed in the past year due to costs.
Public Views on Prescription Drug Costs: Regulation, Affordability and TrumpRx | KFF March 13, 2026
Population Health
JAMA Network Study: Relationship between housing cost burden and heart failure: Key
- National Medicaid claims data (n=233,195; ages 19–64) were linked to zip code housing cost burden, defined as the share of households earning <$35,000 spending ≥30% on housing.
- Each 10–percentage point increase in housing cost burden was associated with higher adjusted odds of cardiovascular hospitalization (OR 1.03), ED visit (OR 1.03), and HF-specific hospitalization (OR 1.04).
“In this cross-sectional study of adult Medicaid beneficiaries aged 19 to 64 years with HF [heart failure], residing in a zip code with a high housing cost burden was associated with increased odds of CV [cardiovascular]-related hospitalizations and ED visits…With rising costs of housing in the US, this study highlights the need to investigate whether strategies to improve affordability can play a role in improving health outcomes for individuals with lower income and HF.”
Pew Report: Family caregivers: “Lower income adults with an aging parent, spouse or partner are more likely to be caregivers than those in higher income tiers As the U.S. population ages, the need for caregivers among older adults is on the rise. Key takeaways:
- 10% of all U.S. adults say they are a caregiver for a parent age 65 or older. Another 3% are caregivers for a spouse or partner age 65 or older. A very small share (less than 1%) say they care for an aging parent and an aging spouse or partner.
- Women: 28% of women who have an aging parent, spouse or partner consider themselves caregivers, compared with 23% of men. ▪
- Lower-income adults: 39% of lower-income adults with an aging parent, spouse or partner are caregivers, compared with 23% of middle-income adults and 16% of upper-income adults.
- 68% of adults who are caregivers for an aging parent and 66% of those caring for an aging spouse or partner (66%) say they help that person with at least one of the following on a regular basis: ▪ Errands, housework or home repairs ▪ Managing their health care, such as medical appointments and medication ▪ Managing their finances, such as budgeting or paying bills on time ▪ Personal care, such as bathing or dressing
Aging in America: Who Are the Family Caregivers? | Pew Research Center
Prescription Drugs
Study: Anti-Kickback Statute (AKS) cases involving pharmaceutical manufacturers:
“We searched press releases posted on the US Department of Justice website between January 1, 2000, and June 1, 2025, to identify resolved cases alleging AKS violations by pharmaceutical manufacturers.
Results
“Among 64 cases meeting inclusion criteria, kickback violations resolved through civil settlements in 53 (82.8%), criminal settlements in 2 (3.1%), both in 9 (14.1%), and judicial judgment of liability in 0 cases. Thirty cases (46.9%) involved multiple drugs, and corporate integrity agreements accompanied 30 cases (46.9%); 11 companies resolved multiple settlements, including 4 Novartis settlements. The median (IQR) time from alleged misconduct to settlement was 3.8 (2.6-7.0) years.
Across 142 implicated drugs, 105 (73.9%) had complete revenue data, including 49 (46.7%) blockbusters. Among those with complete revenue data, the median (IQR) US revenue per drug during the alleged violation period was $2,091,773, 260 ($674 693 333-$4 827 508 333]).
This cross-sectional study found that pharmaceutical manufacturers penalized for kickbacks paid only 2.2% of US revenue accrued from selling implicated drugs during years of alleged violations. Alleged conduct commonly involved direct payments to physicians intended to induce prescriptions of federally reimbursed drugs. Criminal AKS cases were uncommon, likely because they are more difficult to prove. Moreover, all cases were resolved through negotiated settlements, likely due to resource constraints and uncertainty of judicial judgment, which also makes settlement more predictable for manufacturers. Thus, our findings suggest that AKS settlements may be economically tolerable for some pharmaceutical manufacturers and function as a cost of doing business.”
Regulation
Modern Healthcare on Legislative expectations for 2026: “The healthcare sector may need to temper its expectations for Congress for the rest of the year.
Major issues remain unsettled, including Medicare pay rates for physicians, artificial intelligence regulation and limits on health insurance prior authorizations. Congress also faces deadlines for “must-pass” matters such as community health center funding and Medicare add-on payments for hospitals.
Congress scratched some things off this year’s to-do list when it passed the long-delayed government spending bill last month. Lawmakers even took the unusual step of funding many significant health programs that need to be renewed annually until Dec. 31 instead of the end of the fiscal year on Sept 30…
Issues such as prior authorizations, site-neutral Medicare payments for outpatient care, cybersecurity, AI and even President Donald Trump’s healthcare proposals are languishing in the Republican-led Congress.”
Prior authorization, AI legislation likely to stall in Congress – Modern Healthcare
