Skip to main content
The Keckley Report

Hospitals at a Crossroad: Reactive Navigation or Proactive Orchestration?

By May 12, 2024No Comments

This is National Hospital week. It comes at a critical time for hospitals:

The U.S. economy is strong but growing numbers in the population face financial insecurity and economic despair. Increased out-of-pocket costs for food, fuel and housing (especially rent) have squeezed household budgets and contributed to increased medical debt—a problem in 41% of U.S. households today. Hospital bills are a factor.

The capital market for hospitals is tightening: interest rates for debt are increasing, private investments in healthcare services have slowed and valuations for key sectors—hospitals, home care, physician practices, et al—have dropped. It’s a buyer’s market for investors who hold record assets under management (AUM) but concerns about the harsh regulatory and competitive environment facing hospitals persist. Betting capital on hospitals is a tough call when other sectors appear less risky.

Utilization levels for hospital services have recovered from pandemic disruption and operating margins are above breakeven for more than half but medical inflation, insurer reimbursement, wage increases and Medicare payment cuts guarantee operating deficits for all. Complicating matters, regulators are keen to limit consolidation and force not-for-profits to justify their tax exemptions. Not a pretty picture.

And, despite all this, the public’s view of hospitals remains positive though tarnished by headlines like these about Steward Health’s bankruptcy filing last Monday:

The public is inclined to hold hospitals in high regard, at least for the time being. When asked how much trust and confidence they have in key institutions to “to develop a plan for the U.S. health system that maximizes what it has done well and corrects its major flaws,” consumers prefer for solutions physicians and hospitals over others but over half still have reservations:

A Great Deal Some Not Much/None
Health Insurers 18% 43% 39%
Hospitals 27% 52% 21%
Physicians 32% 53% 15%
Federal Government 14% 42% 44%
Retail Health Org’s 21% 51% 28%


The American Hospital Association (AHA) is rightfully concerned that hospitals get fair treatment from regulators, adequate reimbursement from Medicare and Medicaid and protection against competitors that cherry-pick profits from the health system. It can rightfully assert that declining operating margins in hospitals are symptoms of larger problems in the health system: flawed incentives, inadequate funding for preventive and primary care, the growing intensity of chronic diseases, medical inflation for wages, drugs, supplies and technologies, the dominance of ‘Big Insurance’ whose revenues have grown 12.1% annually since the pandemic and more. And it can correctly prove that annual hospital spending has slowed since the pandemic from 6.2% (2019) to 2.2% (2022) in stark contrast to prescription drugs (up from 4% to 8.4% and insurance costs (from -5.4% to +8.5%). Nonetheless, hospital costs, prices and spending are concerns to economists, regulators and elected officials.

National health spending data illustrate the conundrum for hospitals: relative to the overall CPI, healthcare prices and spending—especially outpatient hospital services– are increasing faster than prices and spending in other sectors and it’s getting attention: that’s problematic for hospitals at a time when 5 committees in Congress and 3 Cabinet level departments have their sights set on regulatory changes that are unwelcome to most hospitals.

My take:

The U.S. market for healthcare spending is growing—exceeding 5% per year through the next decade. With annual inflation targeted to 2.0% by the Fed and the GDP expected to grow 3.5-4.0% annually in the same period, something’s gotta’ give. Hospitals represent 30.4% of overall spending today (virtually unchanged for the past 5 years) and above 50% of total spending when their employed physicians and outside activities are included, so it’s obvious they’ll draw attention. Today, however, most are consumed by near-term concerns– reimbursement issues with insurers, workforce adequacy and discontent, government mandates– and few have the luxury to look 10-20 years ahead.

I believe hospitals should play a vital role in orchestrating the health system’s future and the role they’ll play in it. Some will be specialty hubs. Some will operate without beds. Some will be regional. Some will close. And all will face increased demands from regulators, community leaders and consumers for affordable, convenient and effective whole-person care.

For most hospitals, a decision to invest and behave as if the future is a repeat of the past is a calculated risk. Others with less stake in community health and wellbeing and greater access to capital will seize this opportunity and, in the process, disable hospitals might play in the process.

Near-term reactive navigation vs. long-term proactive orchestration–that’s the crossroad in front of hospitals today. Hopefully, during National Hospital Week, it will get the attention it needs in every hospital board room and C suite.


PS: Last week, I wrote about the inclination of the 18 million college kids to protest against the healthcare status quo (“Is the Health System the Next Target for Campus Unrest?” The Keckley Report May 6, 2024 This new survey caught my attention:

According to the Generation Lab’s survey of 1250 college students released last week, healthcare reform is a concern. When asked to choose 3 “issues most important to you” from its list of 13 issues, healthcare reform topped the list. The top 5:

  1. Health Reform (40%)
  2. Education Funding and access (38%)
  3. Economic fairness and opportunity (37%)
  4. Social justice and civil rights (36%)
  5. Climate change (35%)

If college kids today are tomorrow’s healthcare workforce and influencers to their peers, addressing the future of health system with their input seems shortsighted. Most hospital boards are comprised of older adults—community leaders, physicians, et al. And most of the mechanisms hospitals use to assess their long-term sustainability is tethered to assumptions about an aging population and Medicare. College kids today are sending powerful messages about the society in which they aspire to be a part. They’re tech savvy, independent politically and increasingly spiritual but not religious. And the health system is on their radar.


Sections in Today’s Report

  • Quotables from Last Week
  • Care Management
  • Congress
  • Consumers
  • Economy, Investing
  • Hospitals
  • Physicians
  • Regulators


Quotable from Last week

Re: Medical debt (KFF-CBS News): “More than 100 million people in America—a startling 41% of adults—are saddled with medical bills they cannot pay…KFF Health News’ year-long investigation (with CBS’ News) exposed a staggering failure of U.S. health care: It systematically pushes patients into debt.

“Diagnosis: Debt” revealed the scope and severity of this crisis as no one has before: A quarter of those with debt owe more than $5,000. And nearly as many with any amount of debt don’t expect to pay it off in their lifetimes. Black Americans are 50% as likely as whites to owe money for medical care. And 20% of U.S. hospitals will deny nonemergency care to patients with an outstanding bill.”

Diagnosis: Debt – KFF Health News

Re: Gaming the system for profit (Cutler): “The goal of health care innovators should be to do well by doing good—improving patients’ health, saving them money, and making a profit along the way. Unfortunately, the past few years have witnessed significant deviation from this goal. Financial manipulation has become more widespread to the point where investors earn profits at the expense of patients’ health and wealth. In this article, I discuss dimensions of this financial gaming and highlight policies that might address it. Urgent and significant action is necessary before harms to patients escalate….

Because setting optimal health care reimbursement is difficult, less scrupulous clinicians and insurers will always have incentives to cut corners. Recently, it seems that the norms preventing this tendency are fraying. Thus, policymakers need to deter the idea that doing well can come at the expense of doing good. Whenever possible, malfeasance must be prevented in advance and punished when it occurs. Such a strategy will require willpower on the part of policymakers, not just tough words.”

Financial Games in Health Care—Doing Well Without Doing Good | JAMA Health Forum | JAMA Network

Re: Private equity in healthcare (Antitrust Institute): “When the fundamental characteristics of the private equity business model are combined with the unique structure of the United States health care market, the results are potentially catastrophic for patients, payers, and the long-term stability of the health care supply chain. And, because the consequences in health care involve not just dollars but lives, these potential harms must not be ignored.”

AAI-UCB-EG_Private-Equity-I-Physician-Practice-Report_FINAL.pdf (

Re: Dissatisfaction with health system (Axios): “For the decade-ish that I’ve been reporting on health care, insurance coverage has dominated conversations about who has access to care. But in the post-pandemic era, it’s become clear that having insurance is only the first step toward receiving quality care. Why it matters: Where Americans live, their health status and a range of socioeconomic factors increasingly determine their experience with the health care system, and in many cases that experience appears to be getting worse. Affordability, while critical, isn’t synonymous with access. Long wait times for doctor appointments, crowded emergency departments, complicated insurance requirements and a dearth of local providers are all making things tougher on patients. For many people, whether they can get the care they need when they need it seems to come down to the luck of the draw.”

Axios Future of Health Care


Care Management

Monetary incentives for substance abuse-tobacco cessation offered in tandem: “In the U.S., smoking is the leading preventable cause of disease and death, with 480,000 people dying annually  from tobacco-related illness. Meanwhile, nearly 108,000 individuals  died in 2022 from drug-involved overdoses, including illicit drugs and prescription opioids. According to a 2022 report, more than 168 million individuals  in the U.S. had used tobacco products, vaped nicotine, or used alcohol or an illicit drug in the past month.

A significant number of those who use tobacco or illicit drugs — and therefore endure the health consequences — face extreme poverty. Of the approximately 40 million people  who live below the federal poverty line, 24% report current tobacco use . Data from a nationally representative sample showed that those living in the lowest income bracket were 34% more likely  to use drugs in the past year. Among those living in extreme poverty — many of whom are experiencing homelessness — approximately 70% report  current smoking, and of those 30% to 50% report  concurrent substance use.

Three decades of research show that paying cash incentives, otherwise known as contingency management , can reduce tobacco and substance use among people who use these substances, including those who are poor. Especially when accompanied by medication-assisted treatment to prevent cravings and withdrawal, this combination is one of the most effective treatments for tobacco and substance use .

Research has also shown that treating tobacco and substance use together  increases chances of quitting and lowers risk of relapse….Why? Quite simply, it saves lives.”

What If States Paid People to Stop Using Drugs and Smoking? | MedPage Today

Study: overdose deaths: Researchers analyzed the number and rate of children who have lost a parent to drug overdose from 2011 to 2021 overall and by parental age, sex, and race and ethnicity. Findings:

“An estimated 321 566 children lost a parent to drug overdose in the US from 2011 to 2021, with significant disparities evident across racial and ethnic groups. Given the potential short- and long-term negative impact of parental loss, program and policy planning should ensure that responses to the overdose crisis account for the full burden of drug overdose on families and children, including addressing the economic, social, educational, and health care needs of children who have lost parents to overdose.”

Estimated Number of Children Who Lost a Parent to Drug Overdose in the US From 2011 to 2021 | Toxicology | JAMA Psychiatry | JAMA Network



House advances telehealth legislation extension: “The U.S. House Ways and Means Committee marked up the Preserving Telehealth, Hospital, and Ambulance Access Act, which would extend COVID-era telehealth flexibilities for an additional two years. Yes, the Committee voted to advance the bill so it may be considered by the full House, which may then be considered by the Senate, which may then be signed by the President, so that this convenient and cost-effective access to medical services may continue. None of these next steps, however, are expected to happen anytime soon. And if it does get passed, this small, obvious step into the future will only last for two years.”

Only What Matters on Health Information Policy (



Re: Gen Z liquidity: “Young Americans are starting out with more credit-card debt than generations before them. That financial burden can have long-lasting effects.

The rising debt load largely reflects a surge in prices for food and shelter at the start of their careers, coupled with a larger percentage of Gen Z who graduated with student loans. The average credit-card balance for 22- to 24-year-olds was $2,834 in the last quarter of 2023, compared with an average inflation-adjusted balance of $2,248 in the same period in 2013, according to new data from credit-reporting agency TransUnion.

Younger people with higher debt are more delinquent on credit-card payments and need to rely on family for help if they lose their job…They also often delay life milestones, including homeownership and marriage, say the economists…

The median annual wage for recent college graduates was $60,000 in 2023, little changed from $58,858 in 2020, according to the Federal Reserve of New York.

At the same time, rent, which typically takes up at least one-third of the average worker’s monthly paycheck, has soared. The median rent in the U.S. was $1,987 as of January, a nearly 22% increase over the past four years, according to research from Rent, an online rental marketplace. About one-third of households rent and tenants tend to be either young professionals or lower-income families, said Scott Fulford, a senior economist at the Consumer Financial Protection Bureau…

In 2021, credit companies loosened the qualifications for who could get credit cards and more people opened new accounts… Nearly 5% of consumers 27 or younger had opened at least one new credit-card account in March 2020, according to data from VantageScore. By March of this year, that figure had dropped to 3%…

As interest rates have climbed over the past two years, those credit scores have taken a hit. The drop was most drastic for millennials with credit scores between 660 and 719, whose scores fell by 26 points. Gen Z wasn’t far behind. The average credit-score change for Gen Z with credit scores above 720 fell 24 points during that time period, according to Credit Karma.”

Gen Z Sinks Deeper Into Debt – WSJ

KFF report medical debt breakdown: Those who have had medical debt in the past 5 years

  • Age groups: 18-29 (55%), 30-49 (69%), 50-64 (60%), 65+ (37%)
  • Ethnic groups: White (54%), Black (69%), Hispanic (64%)
  • Annual HH Income: Less than $40K (68%), $40-89.9K (57%), $90K (45%)
  • Insurance status: Insured (61%), uninsured (71%)

Diagnosis: Debt – KFF Health News

Housing costs: Changes in prices and earnings: 1981-2023:

  • Home prices: +503%
  • Average hourly earnings: +289%
  • Consumer prices: +184%

Related facts:

  • 66% of the population own their homes with $16.9 trillion in equity value. (Intercontinental Exchange (ICE). A record $11 trillion of home equity is “tappable” by 48 million homeowners averaging of $206,000 per mortgage holder.
  • Because ofrising mortgage rates and still-increasing home prices, buying a house is increasingly out of reach for first-time buyers. It now requires 36% of the median household income to purchase a median-priced home. (30% is considered affordable.)
  • There were 20% fewer home listings in March 2024 vs. 2017-2019.
  • Households expect home price growth to increase to 5.1% over the next twelve months, up from 2.6% a year ago. This is their second highest reading in the survey’s history, but below the series high of 7% in 2022. Expectations over the five-year horizon declined by 0.1%, with households anticipating average annualized price growth of 2.7%.
  • Households expect rents to increase by 9.7% over the next twelve months, compared with 8.2% in February 2023, reversing last year’s decline.
  • Renters put the probability of ever owning a home in the future at 40.1%, a decrease from 44.4%a year ago, reflecting a series low.
  • Households expect mortgage rates to rise to 8.7% a year from now and 9.7% in three years’ time, both numbers a series high.
  • Homeowners’ expected probability of refinancing in the next year rebounded slightly to 6.3% from 4.1% last year.

Federal Housing Finance Agency, Bureau of Labor Statistics, Bureau of Economic Analysis


Telehealth use: “According to our 2023 Consumer Adoption Survey, 76% of respondents have used virtual care, 83% of whom have done so in the past 12 months. Plus, 66% of all respondents expect to use virtual care as much as they currently do, if not more, in the future. That said, telehealth has become a commodity, especially within primary care and urgent care—and companies will need to adjust their business models to differentiate and achieve scale. Some approaches playing out include vertically integrating telehealth with other care services like lab testing, or collaborating as channel partners for new direct-to-consumer platforms.”

Telehealth hard knocks – – Mail (


Economy, Investments in Healthcare

Corporate profits, economic outlook (Wall Street Journal, FactSet): “With corporate profits on an upswing, a major downturn in the economy could be far away.

The bulk of U.S. companies have now reported first-quarter results, and they show profit growth is picking up. Earnings per share for companies in the S&P 500 now look to be up 5.2% from a year earlier, according to FactSet, better than the 3.4% analysts expected at the end of March, and marking the strongest growth in nearly two years…

Company results coming in ahead of the estimates is a regular occurrence. More unusually, analysts also spent last month lifting their current-quarter estimates. They now expect second-quarter earnings per share to gain 9.8%, compared with 9% at the end of March. The last time analysts spent the first month of a quarter raising rather than lowering earnings estimates was during the fourth quarter of 2021…

The drift higher in earnings estimates might be because companies, instead of feeling a need to temper analysts’ optimism and nudge estimates lower, are upbeat themselves. Among companies in the S&P 500, the term “recession” showed up in just 100 transcripts of earnings calls, investor events and conferences recorded in the first quarter, according to FactSet. That was down from 302 in the first quarter of 2023, and the fewest in two years…

Survey-based measures of corporate sentiment have picked up. The Business Roundtable’s index of chief executive officers’ economic outlook rose to the highest level in the first quarter since the second quarter of 2022. Indexes of CEOs’ hiring and capital-spending expectations have gained ground. A survey of chief financial officers conducted by Duke University’s Fuqua School of Business with the Federal Reserve banks of Atlanta and Richmond showed a similar increase in optimism.”

S&P 500 company transcripts mentioning ‘recession ‘Source: FactSet

Booming Profits Are Shielding the Economy – WSJ

Pitchbook: Private equity deal flow slowdown: “Heightened antitrust scrutiny from state governments and regulators in Washington is depressing deals, according to Pitchbook analysts.PE firms announced or closed just below 160 deals in the first quarter, a downward trend even from 2023’s sluggish pace. The total is down almost a third from the fourth quarter last year. Despite the depression, firms have deals in the pipeline that should progress, albeit slowly, the report says. Announcements are expected to trickle in toward the end of this year, with activity picking back up in 2025.”

Private equity investing in healthcare continues to slow | Healthcare Dive

Pitchbook forecast: Private investing thru 2028: “With higher rates and muted distributions, we anticipate the market has an uphill battle to replicate the robust, 12.8% annual AUM growth since 2012.

Our base-case projections suggest more tempered annual growth of 4.9% through 2028, cumulating in an estimated $19.6 trillion of AUM. Under favorable macroeconomic conditions, we see AUM reaching $23.7 trillion with an annual growth of 8.3%, while our downside forecast sees AUM only expanding to $16.1 trillion.

We estimate sustained growth across PE (cumulative AUM growth of +51.1%), private debt (+42.9%), and real assets (+26.8%), which have maintained relatively strong fundraising, performance, and investor appetite.

On the lower end of our forecasts, VC (+20.7%) and real estate (+10.3%) face more difficult paths with VC struggling under the weight of low exit activity and real estate commitments hitting a trough not seen since the GFC

Compared to a decade prior, AUM in primary vehicles has grown 250% to $13.3 trillion in 2022, while secondaries AUM has grown 203% to $462.5 billion. With $200 billion in dry powder, secondaries GPs are in a position to purchase prime assets at attractive pricing from GPs and LPs in need of capital flexibility…

The halcyon days of the 2010s may have come to an end for PE. A perfect confluence of low interest rates, multiple expansion, higher LP allocations, and strong asset class performance buoyed PE assets and dry powder to a combined $5.3 trillion in 2022, almost 200% more than in 2012. During that period, managers relied on market multiple expansion and leverage to drive returns. The playbook for the next decade is likely different as financial leverage gives way to operational leverage and higher financing costs dampen leverage’s utility. Increases in buyout purchase price multiples have largely been taken for granted since the global financial crisis (GFC). Median EV/EBITDA multiples increased steadily from 7.9x in 2009 to a peak of 11.8x in 2022 before declining marginally in 2023. Similarly, debt/EBITDA for large corporate loans increased from 3.7x in 2008 to a peak of 5.3x in 2021 before falling a turn to 4.4x in Q4 2023. As valuation multiples find a plateau and debt remains expensive compared with recent norms, managers may need to look to strategies”




Average administrative cost for providers to pursue delays and denials, per claim:

  • Commercial: $63.76
  • Medicare Advantage: $47.77
  • Managed Medicaid: $24.80
  • Medicaid: $5.99

Premier, Trend Alert: Private Payers Retain Profits by Refusing or Delaying Legitimate Medical Claims, March 2024

Re: Hospital billing practices (Wall Street Journal): For years, hospitals and surgery centers waited to perform procedures before sending bills to patients. That often left them chasing after patients for payment, repeatedly sending invoices and enlisting debt collectors. Now, more hospitals and surgery centers are demanding patients pay in advance.

Advance billing helps the facilities avoid hounding patients to settle up. Yet it is distressing patients who must come up with thousands of dollars while struggling with serious conditions.

Those who can’t come up with the sums have been forced to put off procedures. Some who paid up discovered later they were overcharged, then had to fight for refunds…

For patients, the hospitals say, knowing the cost ahead of service gives them the opportunity to comparison-shop and avoid getting walloped with a huge bill unexpectedly.

Patients often want to know in advance what their medical care will cost. Congress and regulators in recent years have ordered hospitals to be more transparent on prices, which vary widely, and limit surprise billing.

Hospitals Are Refusing to Do Surgeries Unless You Pay in Full First – WSJ

Cerner results disappoint (Modern Healthcare): “When Oracle Corp. spent $28 billion two years ago to acquire electronic-records company Cerner Corp., it promised a revolution in healthcare technology.

Co-founder and Chairman Larry Ellison declared the deal would help fix many of the labyrinthine industry’s ills by modernizing notoriously dated systems, and would create a major growth engine for his company’s earnings as well. Oracle “is now going to be at the center of the next generation of healthcare,” Ellison said in December 2022.

Instead, interviews with more than 30 current and former employees and customers show the software maker have lost at least a dozen of Cerner’s large clients. Bold product ideas, these people say, have also taken a backseat to the unglamorous work of upgrading legacy systems, with Oracle engineers surprised by the amount of effort required to implement changes and move customers to the cloud.

Yet for the time being, the competition seems to be weighing on Oracle. Cerner’s revenue is expected to decline 5% to about $5.6 billion in the fiscal year ending in May and remain flat the following year, according to documents seen by Bloomberg. That figure excludes pre-Cerner Oracle Health businesses like its life sciences unit.”

Oracle’s Cerner Acquisition Leads to Down Sales, Job Cuts – Bloomberg



Study: alcohol related death rates for physicians, workforce: Researchers analyzed the incidence of alcohol-related deaths among healthcare workers from 2008-2019. Findings:

“Compared with non–health care workers, health care workers, especially physicians, had lower crude alcohol-related death rates. Following sociodemographic adjustment, however, significant group differences were no longer observed…However, alcohol-related mortality represents an extreme end point and alcohol-related morbidity remains a common problem. Study limitations include termination of mortality data before the COVID-19 pandemic, misclassification of alcohol-related cause of death in death records,1 absence of key alcohol-related risk factors such as personal or family history of alcohol use, and an inability to measure occupational transitions during the 11-year follow-up.

The risks of alcohol-related deaths among health care workers did not exceed those of non–health care workers. However, this finding does not diminish the importance of improving management of alcohol-related problems among health care workers. Future research should compare problematic alcohol use among health care worker groups during the COVID-19 and post–COVID-19 periods.”

Alcohol-Related Deaths of US Health Care Workers | Occupational Health | JAMA Network Open | JAMA Network



DOJ: Antitrust Division announces task force on healthcare competition: “The Justice Department today announced the formation of the Antitrust Division’s Task Force on Health Care Monopolies and Collusion (HCMC). The HCMC will guide the division’s enforcement strategy and policy approach in health care, including by facilitating policy advocacy, investigations and, where warranted, civil and criminal enforcement in health care markets…

The HCMC will consider widespread competition concerns shared by patients, health care professionals, businesses and entrepreneurs, including issues regarding payer-provider consolidation, serial acquisitions, labor and quality of care, medical billing, health care IT services, access to and misuse of health care data and more. The HCMC will bring together civil and criminal prosecutors, economists, health care industry experts, technologists, data scientists, investigators and policy advisors from across the division’s Civil, Criminal, Litigation and Policy Programs, and the Expert Analysis Group, to identify and address pressing antitrust problems in health care markets.”

Office of Public Affairs | Assistant Attorney General Jonathan Kanter Announces Task Force on Health Care Monopolies and Collusion | United States Department of Justice

Related: DOJ website for consumer suggestions, feedback: “Help us ensure access to fair and competitive healthcare markets for you and your family.”

Antitrust Division | Help us ensure access to fair and competitive healthcare markets for you and your family. | United States Department of Justice

FTC wants increased oversight of PBMs, private equity in healthcare: “We’ve heard primarily two sets of concerns about PBMs. One is a concern [regarding] the rebate system between the PBMs and the drug manufacturers, where the drug manufacturers have to pay rebates to the PBMs to get access to certain formularies. There’s a concern that those rebates could be effectively incentivizing the PBMs to put on the formulary the drugs that are most lucrative, which may be high-cost, branded drugs rather than generics…We’ve also heard concerns that independent pharmacies that are oftentimes having to do business with these PBMs may be subject to all sorts of fees and potentially arbitrary practices that are squeezing them and potentially contributing to their going out of business…

…we’ve heard a ton of concern from healthcare workers about the incursion of private equity into all sorts of areas within healthcare. We’ve also seen a whole set of empirical research studying what’s happened when private equity has entered some of these specialties… We also have heard concerns from doctors about how after private equity has entered that they impose all sorts of quotas and all sorts of financial metrics that have resulted in doctors not being able to best serve their patients, and has actually led to the degradation of healthcare for patients. That’s something that we’re concerned about.

We are also looking at serial acquisitions — instances where you see private equity companies making a whole set of acquisitions, each one of which may be relatively small, but in the aggregate, they can roll up a market.

There’s no doubt that private investment can be an important source of capital, but we need to make sure we’re understanding what are the underlying incentives. Is this private equity firm [making] an investment that’s going to be contributing to the competitive health and make more competitive some of these underlying assets? Or is this a firm that’s focused on the strip-and-flip type model where you’re buying out these assets, stripping them of value, and making them less competitive over the long-term in ways that’s going to be bad for healthcare workers and patients alike?”

MedPage Today editor-in-chief Jeremy Faust, MD, and Lina Khan, JD, chair of the Federal Trade Commission (FTC), discuss the agency’s role in healthcare, FTC Puts Pharmacy Benefit Managers, Private Equity in the Crosshairs | MedPage Today

DHHS, White House propose cyber-security mandate for hospitals: Last week, the Biden administration announced plans to require cybersecurity mandates for hospitals following February hacks of Change Healthcare and St. Louis-based Ascension breach disclosed last week.

“We look to put in place minimum cybersecurity standards for hospitals in the near term,” Anne Neuberger, deputy national security advisor for cyber and emerging technology.

The proposed rule could apply to all organizations that receive Medicare or Medicaid funding and would be followed by a public comment period, according to the story. The White House intends to offer the free training to 1,400 small, rural hospitals in the coming weeks.

White House to Push Cybersecurity Standards on Hospitals – Bloomberg

Medicare Trustees’ Annual Report on Medicare solvency: “Now that the public health emergency has ended and Medicare fee-for service per capita spending has stabilized, the Trustees place a greater reliance on recent experience when developing the cost projections. However, they continue to make three pandemic-related adjustments to the projections. The first is to account for the morbidity improvement in the surviving population, which is expected to continue to affect spending levels through 2029. The second adjustment accounts for the ending of the waiver regarding the 3-day inpatient stay requirement to receive SNF services. The per capita spending projections typically include factors for price updates and changes in the utilization and mix of services. As a result of the expiration of this waiver, the Trustees have increased their inpatient spending growth factor by 1.9 percentage points and decreased the SNF spending growth factor by 7.5 percentage points in 2024. Finally, the third adjustment is to account for home health spending that was still, in 2023, significantly lower than estimated prior to the pandemic. As a result of the recent home health staffing shortages, the Trustees continue to consider the spending level for this service to be suppressed. Thus, they have increased their home health spending growth factor by 2.9 percentage points in each of the next 3 years (2024–2026) (p3)

Total Medicare expenditures were $1,037 billion in 2023. The Trustees project that expenditures will increase in future years at a faster pace than either aggregate workers’ earnings or the economy overall and that, as a percentage of GDP, spending will increase from 3.8% in 2023 to 6.2%by 2098 (based on the Trustees’ intermediate set of assumptions). Under the relatively higher price increases for physicians and other health services assumed for the illustrative alternative projection, Medicare spending would represent roughly 8.4% of GDP in 2098. Growth under either of these scenarios would substantially increase the strain on the nation’s workers, the economy, Medicare beneficiaries, and the Federal budget. (p.9)

2024 Medicare Trustees Report (

Foley & Lardner analysis: telehealth policies in states:

  • More than a third of states passed legislation permanently enshrining audio-only telemedicine coverage for health plans, but payment rates vary.
  • As of this year, 33 states have laws on telehealth payment parity or payment rates, up from 16 states five years ago. But the group said many of the laws aren’t “true payment parity” and some have parity for only virtual mental health care.
  • After the public health emergency ended, many states amended laws to bar health plans from requiring that in-network providers use specific virtual care software.
  • Fears of lower quality of care via telemedicine didn’t come to pass.

50-State-Telemed-Report-2024.pdf (

CBO assessment of ACOs: “This Congressional Budget Office report summarizes recent research findings about Medicare accountable care organizations (ACOs) and the factors that have contributed to or limited their ability to achieve net budgetary savings for the Medicare program. Findings:

Certain types of ACOs are associated with greater savings. They include ACOs led by independent physician groups, ACOs with a larger proportion of primary care providers (PCPs), and ACOs whose initial baseline spending was higher than the regional average… Some factors limit the savings from Medicare ACOs. T hose factors include weak incentives for ACOs to reduce spending, a lack of the resources necessary for providers to participate in ACO models, and providers’ ability to selectively enter and exit the program on the basis of the financial benefits or losses they anticipate from participating

59879-Medicare-ACOs.pdf (

HHS, USDA Dietary guidelines review of alcohol consumption: The Dietary Guidelines for Americans (DGAs), published by the US Department of Health and Human Services (HHS) and the US Department of Agriculture (USDA), provide science-based recommendations on what to eat and drink to promote health, reduce the risk of chronic disease, and meet nutrient needs.  “The issue of alcohol — and how much of it Americans should consume — is up for debate again as the dietary guidelines undergo updates and revisions, due in 2025…

However, politics and money have been inextricably, complicatedly linked with the dietary guidelines from the start. The independent advisory committee itself was created by an act of Congress nearly 40 years ago in response to controversy surrounding the inaugural 1980 dietary guidelines.

In 2000, health groups sued over panel members’ financial ties to meat and dairy industries. In 2015, top nutrition researchers said the guidelines were skewed by pressure from food industries, and rejected experts’ advice to reduce the red meat recommendation. And in 2020, the scientific panel’s suggestion to put caps on daily sugar and alcohol consumption were squashed by federal officials. The process is overseen jointly by the Department of Health and Human Services and the U.S. Department of Agriculture, with the agencies alternating leadership every five years…

Alcohol’s toll in the U.S. has only gone up since the last guidelines were drafted, five years ago. The average number of deaths per year from excessive alcohol use increased 29% between 2017 and 2021. The increase in alcohol consumption during the pandemic only made matters worse. Data from the Centers for Disease Control and Prevention says more than 140,000 deaths per year — including 20% of deaths of young people aged 20 to 49 — are due to excessive alcohol use…the lobbying disclosures suggest the alcohol industry is deeply invested in the outcome of the 2025 guidelines — and how they might influence consumer behaviors.”

Alcohol isn’t healthy after all. Will new dietary guidelines reflect that? (