The federal shutdown ended Wednesday. Congress passed and the President signed a continuing resolution (CR) that extends funding and delays changes to several health programs until January 30, 2026 including community health centers, the National Health Service Corps, teaching health centers, the Acute Hospital-at-Home initiative, telehealth, disproportionate share hospital payment cuts and many others. But extension of the ACA tax credits used by 24 million to purchase coverage at a discount was not included in the deal. The Congressional Budget Office estimates more than 4 million people will lose insurance if the subsidies are not renewed at the end of the year.
The CR pays for its short-term costs by extending 2% Medicare sequestration cuts under previous budget law by one month, and by cutting $400 million from the Medicare. Senate Majority Leader John Thune (R-S.D.) promised to give Democrats a vote on the expiring marketplace subsidies in December.
So, in the next 10 weeks, spin machines in healthcare will operate on overdrive. Campaign 2026 begins in earnest after the Holidays and healthcare will take center stage.
Polls show affordability is the issue and costs of living the number one concern to voters. Conflicts in Gaza, Ukraine, a potential conflict in Venezuela and global tension with Russia and China lurk, but the public’s attention appears fixed on issues at home. That puts the health system in the spotlight.
The majority of voters think the political system is not working, lending to hyper-partisanship by establishment players and lack of trust in the status quo. Misinformation is weaponized and ‘blame and shame’ tactics deployed. That’s where U.S. politics is.
The same is true in healthcare: the majority of voters are dissatisfied with the health system believing it wasteful, excessively profitable and increasing self-serving. Corporatization and consolidation are dividing its landscape into battlefields for Big Businesses and graveyards for others. In each sector—especially hospitals, insurance and prescription drug manufacturing—going big or getting out necessitates diversification and M&A effectiveness for scalable growth.
Thus, the tax credit issue that pits Dem’s against the GOP is not the real issue despite partisan assertions otherwise. Its prominence in the Affordable Care Act has been a lightning rod for ACA critics since 2010 even as a growing majority believe “universal coverage” a fundamental right. So, tax credits per se is an important but small part of the bigger issue: how private health insurance helps people access the care they need at a price they can afford. As evidenced by media coverage since the murder of UnitedHealth Group executive Brian Thompson December 4, 2024 in NYC, the public thinks health insurers contribute to systemic unaffordability and variable access.
For years, health insurers have advanced three presumptions at the center of their collective value proposition:
- Health insurance coverage guarantees timely access to the health system.
- Health insurers play a necessary role in organizing services and controlling costs for their enrollees.
- Health insurance coverage is necessary to household financial security.
While hospitals, physicians, drug and device manufacturers and others challenge these three, they prefer doing business with insured consumers over those without. Pushback against insurer business practices (i.e. network design, prior authorization, utilization reviews, denials, et al) is rooted in the power struggle between providers and suppliers that do the work of caring and insurers that control what they’re paid. Both recognize the necessity of the other and each wants to control the other.
So, tax credits will dominate media coverage about the CR forcing elected officials and industry trade associations to weigh in between now and the end of the year, but needed discussion about the role of private insurance coverage in the U.S. health system will probably escape attention.
The Big Questions that should be addressed by Congress and across the health system with respect to health insurers are these:
- Should insurer data about utilization, costs, provider and drug efficacy et al be publicly accessible?
- Should standardization based on clinical evidence be the basis for coverage, denials and credentialling requirements?
- Should insurer ownership of medical practices, diagnostic and outpatient facilities be limited?
- Should public policy facilitate provider-sponsored health insurance sponsorship in integrated health systems?
- Should price controls be imposed on insurer premiums?
- Should the employer tax exemption be eliminated?
- Should the individual market be the structural foundation for all private coverage?
- Should health insurers be regulated by the federal government instead of states?
And many others.
In the peer reviewed literature, health insurance coverage is strongly correlated with better health outcomes, including lower mortality, improved chronic disease management, and increased use of preventive care. But its affordability is increasingly in question.
Tax credits will be in the news until the end of the year and prominent in Campaign 2026 politics but the value proposition on which the industry has operated will be the focus beyond. Like every sector in healthcare, increased scrutiny is certain.
Paul
Quotables
Rosenthal on consolidation policy November 10, 2025: “Health systems, doctor groups, and insurers are merging and coalescing into ever-bigger giants. While these mergers are good for business, studies show the escalating consolidation in health care is driving up prices, harming patient outcomes, and decreasing choice for people who need care. A recent study found that six years after hospitals acquired other hospitals, they had raised prices by 12.9%, with hospitals that engaged in multiple acquisitions raising their prices by 16.3%…
In the battle for profits between insurers and providers, each side insists it needs to grow bigger to hold sway in the negotiations that determine health care prices. But evidence shows the prices that make sense in industry-level dealmaking have little to do with the actual value of the services involved. Instead, they’re merely a data point in large-scale calculations that, at best, reflect the power balance between opposing parties.”
Mark Cuban on ‘Medicare for All’ plan: “Every other country that offers Universal Health Care either uses a gatekeeper doctor or charges a premium directly or indirectly for that patient choice. Canada and the UK use this to keep down costs. Your plan does not. That could destroy the budget you want to set Healthcare is a right. But you can’t get people the care they need, if you don’t consider the realities of a healthcare ecosystem where a few companies dominate the economics of the system.”
Starowitz on physician independence: “Consolidation in health care has reached new levels, and with it, frustration. Corporate structures designed for efficiency often compromise the physician-patient relationship. It’s no wonder many doctors describe themselves as cogs in a system that no longer feels like health care. For many, the solution lies not in leaving medicine, but in reclaiming their practice.
Independence allows physicians to design care models that reflect their philosophy. Whether it’s a traditional office or a direct primary care model, autonomy gives doctors the freedom to focus on what matters most: relationships, outcomes, and trust.
Independent physicians often report greater career satisfaction, stronger patient loyalty, and a renewed sense of calling. They can decide which technologies to adopt, how to structure their visits, and how to integrate complementary care approaches — options rarely available in large corporate settings.”
The new era of physician independence | Medical Economics
Campanello on system reform: “The key healthcare stakeholders all benefit from escalating healthcare costs, and our sick care system which translate to revenue in their coffers…
If we, as a country, could address the abuses in our sick care system, we would have more than enough resources to invest in a “real” health system which will, in turn, positively impact our escalating healthcare costs and the access to care issues that plague our society, especially in rural America.”
Economy
WTW forecast: Healthcare cost increases are projected to rise 9.6% in the U.S. in 2026, only a hair less than the 9.7% experienced this year, according to WTW’s 2026 Global Medical Trends report, released Tuesday. However, the increase remains “significantly higher” than the 7.6% seen in 2024.
Healthcare cost hikes in 2026 may be only slightly lower than 2025, WTW says
WSJ on job market for 2026 grads: “Employers have a warning for the Class of 2026: Next spring’s graduate-hiring market is likely to be even worse than this year’s.
Six months out from graduation season, more than half of 183 employers surveyed by the National Association of Colleges and Employers rate the job market for the Class of 2026 as poor or fair. That is the most pessimistic outlook since the first year of the pandemic, according to the survey, which is widely seen as an early signal of graduate hiring each year…
Overall, employers say they expect a 1.6% increase in hiring for the Class of 2026, down considerably from their plans for the Class of 2025 last fall, according to the semiannual survey. College recruiting for full-time jobs typically kicks off in the fall or earlier, and by the spring, employers have a clearer sense of where hiring will land. In recent years, employers have revised their spring plans downward from the fall survey.”
Companies Predict 2026 Will Be the Worst College Grad Job Market in Five Years – WSJ
Bureau of Labor Statistics: “The Jobs report for September will be released November 20 instead of October 3.”
CNN on Affordability: “President Donald Trump swept into office with a bold plan to remake America’s economy. But the realities of a persistent affordability crisis, low favorability ratings and biting election losses for his Republican party are forcing him to remake his plan on the fly.
Although still in the early stages, Trump’s Plan B appears to be a spaghetti-on-the-wall strategy that includes $2,000 tariff rebate checks, 50-year and portable mortgages and lower tariffs on common grocery items.
Each tactic comes with significant question marks – and some are so radical economists fear they could squeeze Americans’ finances even more.”
Big Tech economy and Open AI: “Investors take a lot of comfort from the solidity of Big Tech earnings as worries grow about artificial intelligence overinflating valuations. But those earnings have an ugly underbelly: ever-bigger losses at the generative AI startups that spend big on chips and data centers supplied by the profitable public companies.
Quarterly profits soared at Nvidia, Alphabet, Amazon and Microsoft as AI-related revenue poured in (Meta’s were wiped out by tax). Cash flows are mostly fine, albeit a lot is now going into building new data centers. Some of the money comes from actually selling AI services to businesses, particularly at Alphabet and Microsoft.
But much of the AI-related profits come from being a supplier to, or investor in, the private companies building the large language models behind AI chatbots—and they’re losing money as fast as they can raise it, and plan to keep on doing so for years…
What’s only starting to become clear is that the companies are also sinkholes for AI losses that are the flip side of chunks of the public-company profits…This demand for computing capacity is a big part of why data-center construction is in overdrive…”
Big Tech’s Soaring Profits Have an Ugly Underside: OpenAI’s Losses – WSJ
Pitchbook: 3Q Private Investor Performance: The PE Barometer remains in neutral territory with a score of 57, producing a nowcast of 3.9% and a desmoothed nowcast of 4.8% for Q3 2025. This reading suggests finalized PE returns for the quarter will come in slightly above the long-run average for the asset class.
The VC Barometer registered a score of 55 for Q3 2025, producing a nowcast of 2.5% and a desmoothed nowcast of 4.3%. Venture returns are tracking near long-run fundamentals, marking a clear improvement from the subdued performance seen throughout 2023 and early 2024.
The Private Debt Barometer remains stable and near neutral with a score of 54, producing a nowcast of 2.8% and a desmoothed nowcast of 2.9% for Q3 2025. The score reflects solid performance across public equity and credit markets and easing market volatility, partially offset by tightening lending standards and a modest increase in the Financial Stress Index.”
Q3 2025 Private Capital Return Barometers
Hospitals
Stroudwater report: Rural provider compensation survey highlights: “Representing approximately 4,697 rural providers, the results of the survey illustrate the enormous variability in provider compensation across rural organizations and the pressing need for rural healthcare to align provider compensation with the organization’s goals and be compliant with fair market value.”
- Rural provider compensation is not tied to incentives for many rural hospitals. 7% of respondents pay providers a straight salary with no performance or quality incentives; compared to 2024 data, which reported 54.7% for this metric, this suggests that alternative base-plus-incentive models are being adopted.
- Compensation variability in primary care is narrowing compared to 2024, driven by increases at the lower end of the salary range—particularly among family medicine physicians without OB. While the average family medicine physician without OB’s total compensation is less than $343,000, the survey uncovered a rural spread of $240,287 to $465,000 across family medicine providers.
- No organization surveyed indicated using the current CMS physician fee schedule for determining wRVUs, and over half the organizations surveyed did not know which CMS physician fee schedule (PFS) they were using.
The State of Rural Provider Compensation in 2025 – Stroudwater Associates
Kaufman Hall: Hospital Financial Performance: Key Takeaways from September 2025 performance indicators:
- “Operating margins remain stable. However, a closer look at the data shows that there is a widespread gap in hospital performance. Margins range from 14.7% (hospitals in the 75th percentile) to -1.8% (hospitals in the 25th percentile).
- Patient volumes increased this month in both emergency and inpatient care. The ability of hospitals to manage patient throughput is increasingly important as margins are lower despite increased patient volume.
- Drug expenses continue to rise. Increases in pricing and increased use of more advanced pharmaceuticals are factors driving drug costs.
The adjusted year-to-date operating margin for nonprofit hospitals was 2.9% in September, a slight increase over August. But the average margins ranged from -1.8% in the bottom quartile to 14.7% average for hospitals in the top quartile….”
National Hospital Flash Report: September 2025 Data | Kaufman Hall
Moody’s: not for profit hospitals outlook. Moody’s Ratings gives the not-for-profit hospital sector a stable outlook in 2026 projecting gradual financial recovery as operating cash flow margins inch up to roughly 6.5% to 7.0%, helped by tighter cost controls, steadier staffing and continued outpatient growth. Moody’s said the outlook could change to positive if median operating cash flow margin exceeds 9% but could change to negative if it drops below 6%.
Moody’s www.moodys.com
Leapfrog: System affiliation associated with higher safety scores: In its fall report, released Thursday, The Leapfrog Group found hospitals that received an “A” were more likely to belong to a health system. Top hospitals also had efficient monitoring of patient safety and quality as well as more advanced technology to improve the …
The breakdown of grades did not vary much from the spring. About 24% of hospitals received an “A,” nearly 20% a “B,” more than 25% a “C,” more than 6% a “D” and 0.6% of hospitals received an “F.” However, almost a quarter of hospitals, or 874 hospitals to be exact, were not included in the grading process, compared with 13.3%, or 489 hospitals, that were not included in the spring.
Leapfrog https://www.leapfroggroup.org/news-events/leapfrog-group-announces-its-fall-2025-hospital-safety-grades
Study: hospital patient safety since pandemic: “In this cohort study of 715 continuously reporting US hospitals using data from the Vizient Clinical Data Base, risk-adjusted in-hospital mortality declined significantly from Q3-2021 through Q1-2024, while patient acuity as measured by case mix index remained elevated compared with prepandemic levels despite a post-2020 decline. These findings suggest that while patient acuity may reflect a new postpandemic baseline, risk-adjusted mortality has resumed its prepandemic trajectory of improvement.”
Insurers
KFF Report on Medicaid in OBBBA` “The Medicaid provisions in H.R.1 (One Big Beautiful Bill Act) are estimated to reduce federal Medicaid spending by $911 billion (or by 14%) over a decade and increase the number of uninsured people by 7.5 million, though the impacts vary by state with spending cuts ranging from 4% to almost one-fifth of all federal Medicaid spending in some states… Looking ahead, the challenging fiscal climate and the magnitude of federal Medicaid cuts will make it difficult for states to absorb or offset the reductions.
This brief analyzes Medicaid enrollment and spending trends for FY 2025 and FY 2026, based on data provided by state Medicaid directors in 48 states:
- Medicaid enrollment declined by 7.6% in FY 2025, driven primarily by the unwinding of the continuous enrollment provision.
- Total Medicaid spending growth was 8.6% in FY 2025 and is expected to slow slightly (7.9%) in FY 2026.
- State Medicaid spending growth was 12.2% in FY 2025 and is projected to slow to 8.5% in FY 2026, similar to total spending growth levels and marking the end of shifts caused by pandemic-era enhanced federal funding.
Medicaid Enrollment & Spending Growth: FY 2025 & 2026 | KFF
Physicians
Physician wellbeing study: Key findings from The Physicians Foundation 2025 Survey of America’s Physicians:
- 57% of surveyed physicians have experienced inappropriate feelings of anger, tearfulness or anxiety during the past year (similar to 2021 and 2022 pandemic levels)
- 46% report withdrawing from family/friends/co-workers (significantly higher than last year)
- 34% have felt hopeless or that they have no purpose (similar to 2022 and 2021 pandemic levels)
- 55% have felt levels of debilitating stress.
- 54% of physicians report they often have feelings of burnout (declined from 60% last year).
- 38% of physicians reported being afraid – or knowing a colleague who was fearful – of seeking mental health care because of questions about mental health in medical licensure/credentialing/ insurance applications.
The Physicians Foundation, The State of America’s Physicians: 2025 Wellbeing Survey, September 2025
Study: Usefulness of EHR in family practice: A total of 8122 family physicians responded to the survey (100% response rate), with 2336 respondents (29%) working in independent medical practice. Physicians reported ideal interoperability experiences varied by data type, ranging from 19% for encounter documents to 8% for test results from outside hospitals or health systems. Illustrative simulations showed that interventions that increased the proportion of physicians who reported often automatically obtaining medications by 20 percentage points increased the proportion of physicians reporting ideal interoperability experiences for medications by 1 percentage point.
Polling
Gallup on religion in America: “Fewer than half of Americans now say religion is an important part of their daily lives, a 17 percentage point drop since 2015, which ranks among the largest declines in the world, according to a new Gallup poll.
The U.S. was once exceptional for its high religiosity among wealthy nations. The shift reflects profound cultural changes that could reshape politics, social ties and even national identity.
Gallup: In the latest Gallup Poll released Thursday, only 49% of U.S. adults say religion is essential to their daily life, down from 66% in 2015.
- That decline is among the biggest measured globally since 2007, Gallup said.
- Among 38 Organization for Economic Co-operation and Development (OECD) nations, a median of 36% of adults call religion important — a figure the U.S. is rapidly approaching.
An unprecedented 15,000 churches in the U.S. are estimated to shut their doors this year, far more than the few thousand expected to open, according to denominational reports and church consultants. A record number of Americans (29%) also are identifying as religiously unaffiliated, and 62% identify as Christians, down from 78% in 2007, according to the Pew Research Center.”
U.S. faith levels plummet to lowest on record
Prescription Drugs
Trump announces GLP-1 Deal: On November 6, the White House announced a deal to offer substantial discounts on GLP-1 drugs Wegovy (Novo) and Zepbound (Lilly) for Medicare enrollees.
”The Medicare prices of Ozempic, Wegovy, Mounjaro, and Zepbound will be $245, less than half the prices proposed by the Biden Administration on such drugs. State Medicaid programs will also have access to these medications at these prices. These low prices will enable Medicare to cover Wegovy and Zepbound for patients with obesity and related comorbidities for the first time. Medicare beneficiaries will pay a co-pay of just $50 per month. Beneficiaries would have a monthly copay of $50.”
White House https://www.whitehouse.gov/fact-sheets/2025/11/fact-sheet-president-donald-j-trump-announces-major-developments-in-bringing-most-favored-nation-pricing-to-american-patients/
Study: Biosimilar prescribing impact on drug costs: “This cohort study (N = 7 drugs) used bayesian structural time series models to construct a synthetic control, estimating what originator drug prices would have been without biosimilar competition (the counterfactual). Compared with this counterfactual, observed prices decreased overall, with substantial reductions for pegfilgrastim and infliximab. This study suggests that biosimilar entry to the market was associated with modest price reductions, but policy changes are needed to enhance the cost-saving potential under Medicare Part B.”
Price reductions for originator biologics with biosimilar competitors have been modest in the US. This may be due to the US reimbursement model, where clinicians or their employing medical institution receive payment based on the percentage of the cost billed, incentivizing the highest-cost product. Currently, US policymakers are debating changing this policy. However, a clear understanding of price reductions achieved by the current system is needed to inform future reform efforts.”
Public Health
Study: Association between access to maternity care and infant mortality: In this cross-sectional analysis of more than 18 million live births (2017-2021), the adjusted risk of infant mortality among those residing in counties with no access to maternity care was 14% higher than infants residing in counties with at least 2 hospitals or birth centers offering obstetric care and at least 60 obstetric clinicians per 10 000 births. In this study, infant mortality risk was inversely associated with county-level access to maternity care, with the highest risk in counties with no access.”
Maternity Care Access and Infant Mortality | Pediatrics | JAMA Network Open | JAMA Network
KFF on public concerns about Covid vaccine “The covid vaccine was initially popular. About 75% of Americans had received at least one dose of the first versions of the vaccine by early 2022, Centers for Disease Control and Prevention data shows. But only about 23% of American adults got a covid shot during the 2024-25 virus season, well below the 47% of American adults who got a flu shot. The vaccination rates for flu, measles, and tetanus are also going down.
Yet covid remains a serious, potentially deadly health risk, listed as the primary cause of death on roughly 31,400 death certificates last year. By comparison, flu killed about 6,500 people and pneumonia, a common complication of the flu, killed an additional 41,600, CDC data shows.
As millions of Americans decide whether to get a covid shot this season, public health researchers worry vaccination rates will slide further, especially because Hispanic and Black Americans and those under 30 have lower rates, exposing them to serious complications such as long covid.”
Study: End-of-life care preferences: “This systematic review across 25 studies found 10 studies with at least 50% of patients changing preferences over time. This instability is associated with number of assessments, and influenced by transient factors, such as health status, emotional states and prognostic understanding.
These findings suggest that end-of-life care goals and preferences among patients who are seriously ill are unstable; therefore care planning should focus on an ongoing process of preparing patients and families for real-time decision-making rather than relying on predocumented goals and preferences for future medical care decisions.”
