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The Keckley Report

Will the Coalition to Strengthen America’s Healthcare Design a Fix?

By February 17, 2025No Comments

The American Hospital Association holds its Annual Membership Meeting in DC March 4-6. It comes at a precarious time:

  • Clinical innovations and AI are pushing care away from hospitals into homes, pharmacies, outpatient facilities, physicians’ offices and smart watches and disrupting what, where, how and who delivers care.
  • Physicians—half of whom are employed by hospitals—are frustrated facing a Medicare reimbursement shortfall for the 5th consecutive year unless remedied in Congress’ reconciliation bill next month. They’re putting pressure on hospitals to help.
  • The hospitals’ clinical workforce—its doctors, nurses, techs and therapists—is in mourning due to labor shortages, unrealistic patient expectations and administrative red-tape. It’s not what they signed up for.
  • In 5 states (TX, IL, PA, NJ, NC) legislators/Governors are looking to restrict/limit tax exemptions for not-for-profit hospitals; in 11 states (NM, MA, OR, WA, CT, NY, IN, VT, OR, CA, MN) legislators want restrictions on private equity ownership of hospitals and other providers; and in the U.S. Senate, Sens. Ed Markey, Warren and Sanders have proposed similar restrictions. The bankruptcies of Prospect and Steward after their private equity owners saw windfalls has left a bitter taste.
  • The House and the Senate are finalizing budget reconciliation plans that might cut $1.7 trillion from federal healthcare spending including a $880 Medicaid cut that would destabilize many hospitals. Hospitals will take a direct hit, especially if subsidies for marketplace coverage are allowed to expire in December.
  • DOGE (Department of Government Efficiency) is cutting expenses in key federal agencies deemed “essential” to the U.S. health system’s significance in clinical innovation and global role: imposition of 15% NIH “indirect costs” ceiling, cessation of World Health Organization (WHO) membership, shutdown of USAID, workforce cuts at the CDC and Department of Veteran’s Affairs and likely others. Who do hospitals call for help?
  • And last Thursday, by a vote of 52-48, Senate confirmed Robert Kennedy Jr. as the Secretary of Health & Human Services and the White House immediately announced creation of The President’s Commission to Make America Healthy Again” tasked with creating a go-forward plan to fix U.S. healthcare within 180 days.

And all these come at a critical time in the U.S. economy and in household finances:

Inflation appears stuck at 3% and wage increases slightly below signaling the Fed is unlikely to lower interest rates in the first half of 2025. That means borrowing costs for hospitals will not drop and household debt—already at an all-time high– will mount. Per the Federal Reserve Bank of NY “Household debt and financial instability reached all-time highs. Housing costs are damaging consumer confidence; fuel and food costs problematic, and medical services costs are steadily.”

In advance of its meeting in two weeks, AHA released an infographic (Hospitals are Cornerstones in their Communities) last Thursday advancing familiar themes:

  • Community hospitals provide care for millions of individuals: In 2023, hospitals cared for their communities through 142 emergency visits, 32 million inpatient visits, 3.4 million babies delivered, and over 28 million surgeries.
  • Community hospitals are engaged in their communities: Hospitals support medical training, research, prevention, wellness and community health improvement
  • Community hospitals are economic pillars: hospitals directly employed 6.6 million, supported 25.9 (1 of 6 jobs) in the nation, purchased $1.3 trillion in goods and services and supported $4.8 trillion of economic activity—one-sixth of the entire economy.

They’re based on core beliefs widely held by hospital operators and their supporters:

  • Hospitals are vital to the social safety net and economic stability in every community.
  • Hospital operations are complex.
  • Hospitals are not paid for many services they provide.
  • Hospitals are under-paid by Medicare and Medicaid, necessitating higher payments from private insurers and individuals.
  • Hospitals are handicapped by burdensome regulations and unfair competition that handicap their effectiveness.

AHA and its partner associations have successfully defended their turf: Often referenced as a “powerful lobby”, it has fought against 340B cuts, site-neutral payments and physician-ownership of hospitals and waged war against “corporate insurers” and drug prices for escalating health costs. In states, its associations have been equally effective, guarding against price controls, limits on tax exemptions, Medicaid cuts and more.

But the effectiveness of the hospital lobby has not muzzled critics. Hospitals—especially multi-hospital systems owned by private equity, publicly traded or tax exempt—are soft targets, especially for a disgruntled workforce and union activists. No amount of judicious advocacy can overcome widespread media coverage of alleged executive compensation excess, corporate greed and price gauging. And no amount of lobbying can explain objectively how some hospitals operate profitably and others struggle.

In Trump Healthcare 2.0, hospitals face three immediate challenges requiring its lobby to pivot quickly.

  • The DOGE pivot means unprecedented cuts in Medicare and Medicaid reimbursement for hospital core services.
  • The RFKJ pivot means less emphasis on hospital inpatient care and specialty medicine and more emphasis on preventive health, chronic care, nutrition and wellbeing accessible thru non-hospital sources virtually anytime, anywhere. No reference to hospitals in RFKJ’s comments to date!
  • The economic pivot means hospital prices, medical debt and affordability will matter more.

If the passage of the Affordable Care Act was a tipping point for healthcare in 2010, the election result in 2024 is no less. In response, AHA is leaning into its Coalition to Strengthen America’s Health Care (CSAH) for help with advertising and advocacy.

CSAH was created by AHA, the Catholic Health Association, Federation of American Hospitals and others “to strengthen Americans’ access to 24/7 care.” Its Honor Roll includes most state hospital associations, all major national associations and several suppliers. Its priorities are “Defending Medicare, Funding Rural Health, Protecting Access to Care, Supporting the Workforce, and Protect Medicaid for American Families.” Perhaps a sixth within its reach could be added:” Fix the Health System” recognizing for some that’s a bridge too far.

CSAH is ideally positioned to offer a “fix” to the system by facilitating a shift in its priorities from hospital preservation to the creation of an efficient, effective, affordable system of health in which hospitals play a role. In this scenario, providing “24/7/365 care” is important only to the extent it contributes to the system’s better health- lower cost purpose. And a fix would necessarily require regulatory changes and sector concessions that enable the greater good to take precedent over its protectionist tendencies.

Whether the Make America Healthy Again Commission develops a fix is TBD. It is tasked to “re-direct our national focus, in the public and private sectors, toward understanding and drastically lowering chronic disease rates and ending childhood chronic disease. This includes fresh thinking on nutrition, physical activity, healthy lifestyles.” While important and necessary, that’s far from a systemic fix.

Whether the Coalition to Strengthen America’s Healthcare is inclined to be the facilitator that designs a fix is also unclear: its primary focus today is protecting hospitals. While understandable, it’s regrettable since the vast majority of hospitals view stewardship and the greater good as their calling and recognize the need for a systemic fix.

But what’s clear is that a fix is urgently needed to address affordability, accessibility and effectiveness systematically before it’s too late.

Paul

PS In today’s report, there are a number of Quotables worth reviewing that capture the current mood in America about the system and citations in Economy, Governance, Hospital, Insurers, Prescription Drugs, Polling and Population Health sections that are foundational to this report. Thanks for reading.

 

Helpful Resources

 

Sections in today’s Report

  • Quotables
  • Economy
  • Governance
  • Hospitals
  • Insurers
  • Physicians
  • Polling
  • Population Health
  • Prescription Drugs

 

Quotables

Altman on Trump health policies: “Decisions about two things—paying for tax cuts, and whether President Trump wants another big fight about health care—more than any other factors, will drive the biggest health policy decisions in the early days of the Trump administration.

The first big decision is the one Republicans will make about paying for their $5 trillion tax cut (coincidentally about the same amount as we spend on health care each year). After plans were floated in the House for Medicaid cuts totaling an astronomical $2.3 trillion, Republicans appear to be circling around plans for Medicaid cuts in the neighborhood of almost $900 billion over 10 years…

That leads to the second big decision. Does President Trump want another big health care debate? Any of the big Medicaid proposals floated so far—a per capita cap, drastic cuts in federal Medicaid expansion matching rates effectively killing the expansion in 40 states and DC, or significant cuts in the regular Medicaid matching rate, and Medicaid work requirements—will bring a divisive debate. With margins tight in the House, the President may not want to run the risk of another defeat on a big health care package, having suffered a dramatic defeat on the Affordable Care Act (ACA) repeal in his first term. Instead, he may decide to keep health care, with its incendiary politics, out of the picture and avoid handing Democrats a hammer to use to drive down his popularity and wield in the midterms.”

Drew Altman “The Biggest Health Policy Decisions Now Facing the Trump Administration” February 14, 2025 www.kff.org

Cassidy on RFK: “Cassidy’s choice to send Kennedy’s nomination to the floor will forever be remembered as crucial in assuring Kennedy’s confirmation.

Under unrelenting pressure from his party, Cassidy betrayed his solemn oath as a physician to elevate a dangerous ideologue to the highest halls of power. At this critical moment, he lacked the courage to put our nation’s health before his personal political fortunes.

It is the choices our public officials make in the most difficult situations that defines their character. By supporting Kennedy’s nomination, Cassidy, Marshall, Barrasso, and Paul have shown us theirs.

We fear that history will not be kind.”

Joseph V. Sakran, MD, MPH, MPA, and Samuel Okum “Physician Senators, What Have You Done? They have betrayed the Hippocratic Oath in voting to confirm RFK Jr. “February 14, 2025 https://www.medpagetoday.com/opinion/second-opinions

Grover on Life expectancy: “It’s no secret that life expectancy in the United States is among the lowest in the developed world and has been since long before the Covid-19 pandemic.  The United States ranked 29th in life expectancy at birth among peer nations in the Organization for Economic Cooperation and Development despite spending almost twice as much on clinical care per person as the average OECD nation. Yet the United States ranks second in the world when it comes to self-reported health status.

People often blame our health care system — hospitals, doctors and other health providers, insurers — as the reason for the disappointing performance on life expectancy at birth. As physicians and public health professionals, we agree that there are big problems that need to be fixed. But much of Americans’ lagging life expectancy is unrelated to issues in the clinical health care system….

We too often focus on one data point and ignore the things that may make a bigger difference in lives (and life expectancy). It’s time to ask our public officials, and ourselves, to do more to tackle alcohol, drug, and firearm deaths in America. “

U.S. health care is not the biggest reason for its reduced life expectancy | STAT

Medicaid cuts: “Whether the effort to reduce Medicaid spending comes in one or two waves is unclear, and how big each wave could be is also unclear. What is clear is that what is driving the discussion right now is an aggressive quest for dollar offsets, not a vision of a stronger Medicaid program that ensures good, stable health insurance for the poorest Americans with the most significant health care needs, or a vision of a Medicaid program that continues to underpin the health care system’s extraordinary capability to respond to public health demands, the COVID pandemic being only the most recent example.

As a wise person once wrote, Medicaid is the workhorse of the American health care system. If we weaken Medicaid, families, the health care system, and state economies will pay the price.”

What Lies Ahead For Medicaid In Budget Reconciliation? | Health Affairs

Workforce resistance to Trump policies: “Trump’s looming threats to Medicaid, Medicare, and essential childhood vaccination programs could quickly inflict thousands of preventable deaths, as his withdrawal of U.S. support for global public health has already begun to do. Given these realities, health workers cannot wait on hospital administrators to finally stand up for us, our patients, and the ethical foundations of medicine and caregiving rather than the profit motivations on which administrators’ careers are based. We must urgently organize among ourselves, to protect one another as well as the communities in which we live.

Despite increasing levels of unionization among nurses and doctors that suggest growing recognition of the importance of organizing and solidarity, persuading health workers to disobey unjust laws and rules remains an uphill battle. American health care professionals are not well-known for being eager rule-breakers, political organizers, nor principled objectors to cruel policies that exclude people from health care.

In fact, we’re well-trained to comply, after having spent decades normalizing the deadly exclusion of millions of people from care by our for-profit health care system. This tradition of American medical ideology — something that the historian of authoritarianism Timothy Snyder has called “an invitation to tyranny” — makes it feel easy, almost like a natural reflex, for us to go along with rising medical fascism now…

Throughout the history of modern medicine, authoritarian regimes or oppressive governments have often relied on doctors and other health workers to provide a facade of legitimacy and willing hands armed with scalpels, syringes, pens, or simply locks on doors by which they kept those in need from receiving care.”

American medical workers must become rule-breakers | STAT

Chartis on Rural hospital closures: “Over the last year, 18 rural hospitals closed or converted to an operating model that excludes inpatient care. That brings the total since 2010 to 182. According to our newest analysis, 46% of rural hospitals have a negative operating margin, and 432 are vulnerable to closure. This loss—and potential future loss—of access to care is compounded by rural America’s weakening population health status and expanding “care deserts” for vital services such as obstetrics (OB) and chemotherapy. For the more than 46 million people who live in rural areas, the rapid deterioration of access to care and persistent financial strain raise pointed questions about the safety net’s ability to continue to meet the needs of these communities in the future.”

2025 rural health state of the state: Instability continues to threaten rural health safety net Reduced reimbursements, dwindling access to care, and deteriorating population health status https://www.chartis.com/sites/default/files/documents/CCRH%20WP%20-%202025%20Rural%20health%20state%20of%20the%20state_021125.pdf

Axios on Medicaid negotiations: “Health care reform always makes winners and losers. To reduce federal spending and taxpayer obligations, lawmakers will have to choose pain for some combination of Medicaid beneficiaries, states or hospitals and other providers.

The risk is ultimately less access to care, particularly for some of the country’s most vulnerable populations.

Reality check: This process is just getting started on the Hill. I wouldn’t place bets yet on where any of this ends up — everything can and will probably change as Republicans work through what’s possible.”

Axios Future of Health Care February 14, 2025 https://www.axios.com/newsletters/axios-future-of-health-care

Shulkin on NIH cuts: “A decision by The National Institutes of Health to reduce funding for grants will have a major and long-lasting impact on medical research in the US. Effective immediately, NIH announced that all new grants will have a 15% payment cap for indirect costs. Indirect costs pay for facilities, research infrastructure, capital expenses, maintenance, and administrative expenses supporting 300,000 researchers and 2500 universities, research institutions, and academic centers. Indirect costs at leading academic institutions are often above 60% (Hopkins 67.5%, Yale 63.7%, Harvard 69%) and a reduction to 15% will reduce research support nationally by hundreds of millions of dollars. This will almost certainly result in less investment in research by many institutions. Looking to use taxpayer dollars is wise, but this type of dramatic reduction in research funding will likely have significant unintended consequences.”

David Shulkin, 9th Secretary, US Department of Veterans Affairs linked in February 12, 2025 https://www.linkedin.com/in/davidshulkin

Andrews on healthcare zero sum game: “Peter Drucker observed that “innovation means the creation of new value and new satisfaction for the customer.”  There are few, if any, data points to demonstrate that the health economy is delivering “new value and new satisfaction for the customer.”

Health economy stakeholders can deliver value for money to the customer in one of three ways:

  • Better than average quality at a price at or near the median market rate.
  • Average quality at a price that is below the median market rate.
  • Better than average quality at a price that is below the median market rate.

There is no value for money proposition in offering worse than average quality at any rate, especially one that is higher than the median market rate…You demand value for money in every consumer decision you make. When you finally realize that delivering value for money is the only way to win healthcare’s negative-sum game, will it be too late?

National Health Expenditures: Down the Rabbit Hole and Through the Looking Glass Hal Andrews Trilliant Health February 5, 2025 www.trilliant.com

Brian Thompson death “…Much like when people are burdened with unconscionable medical bills over procedures and ambulance rides that can bankrupt them, people also turn to GoFundMe to raise money to pay for a good lawyer. Thankfully Luigi won’t have to suffer through the generosity lottery — people have already pooled a sizeable share of coin for him. The Independent has coverage:

Luigi Mangione, the 26-year-old charged with the murder of UnitedHealthcare CEO Brian Thompson, has accepted nearly $300,000 in donations toward his legal defense, according to the fund.
…
“We’re thrilled that Luigi is accepting these funds so that he can mount the strongest defense possible,” said D4 Legal Committee spokesperson Sam Beard in a statement. “The American private health insurance industry has ruined countless lives by denying people access to basic care and burying families in medical debt. It’s no surprise that Luigi’s alleged actions are understood and supported by tens of millions of hard-working Americans.”

Luigi Mangione Pulls $300K From Grassroots Funds To Bolster His Case:  Having a higher approval rating than most branches of government has its perks! Above the Law February 10, 2025 https://abovethelaw.com/2025/02/luigi-mangione-pulls-300k-from-grassroots-funds-to-bolster-his-case

Pearl on AI: “Late last month, a new player in AI sent shockwaves throughout the tech world. DeepSeek-V2, an open-source generative AI model developed by a Chinese company, shot to the top of the App Store within days of its release. Investors took notice. AI-related stocks went into a tailspin as markets scrambled to assess the implications.

While OpenAI, Google and Anthropic have dominated the space, DeepSeek has emerged with a bold claim: it was trained on a fraction of the budget used by its Western counterparts—reportedly just $6 million…

But regardless of the actual numbers, one aspect of DeepSeek’s approach is industry changing: its assumed use of distillation—a technique that allows a smaller, more cost-efficient GenAI to leverage the intelligence of a much larger model. If true, this signals a radical shift in how future generative AI applications will be built, slashing development costs while maintaining high performance.

And nowhere will this approach have a great impact than in medicine. Distillation will enable dozens of mid-sized companies to create disease-specific AI models—small, affordable systems fine-tuned for chronic conditions like diabetes, heart failure and arthritis. Instead of relying on massive, general-purpose AI tools, patients could have AI-powered health agents trained on specialized medical data, guiding their care in real time.

The rise of DeepSeek is just the latest reminder that generative AI isn’t destined to remain a lowly administrative tool or passive assistant to clinicians. I predict that within three to five years, GenAI will be diagnosing and recommending treatments for millions of Americans with both acute and chronic medical issues.”

Robert Pearl Monthly Musings February 2025 www.robertpearlmd.com

Theranos: Holmes’ first interview from prison: “I refused to plead guilty to crimes I did not commit. Theranos failed. But failure is not fraud. There is not a day I have not continued to work on my research and inventions. I remain completely committed to my dream of making affordable health care solutions available to everyone.”

Theranos’ Elizabeth Holmes says prison has been ‘hell and torture’ in new interview Fortune February 13, 2025 Elizabeth Holmes https://fortune.com/2025/02/13/theranos-elizabeth-holmes-prison-interview

 

Economy

Study: Publicly-traded healthcare profit distribution: Yale researchers analyzed payouts from large, publicly traded healthcare companies between 2001-2022. Findings:

“Shareholder payouts increased 315% from $54 billion in 2001 to $170.2 billion in 2022 totally. $2.6 trillion. Overall, the healthcare industry allocated 95% of aggregate net income to shareholder payouts, while in three subsectors — healthcare facilities, distributors and pharmaceuticals — shareholder payouts actually exceeded net income. Healthcare companies already face perennial criticism over allegations they focus on profits over patients, as the largest publicly traded healthcare companies have grown to bring in hundreds of billions of dollars in revenue and billions of dollars in profit each year.

That growth corresponds with snowballing spending on healthcare in the U.S., which experts say is driven by rising prices for goods and services: The country’s health spending grew 7.5% to $4.9 trillion in 2023, according to CMS data. That’s $14,570 per person, at a time when many Americans report struggling to afford prescription drugs, the cost of insurance premiums and other medical care.

Censure has been levered at drugmakers amid the ever-rising list prices for medications, hospitals over steep or unexpected medical charges and health insurers for delaying or denying medical care.”

Large healthcare companies are redistributing most of their profits to shareholders, study finds Healthcare Dive February 12, 2025 https://www.healthcaredive.com/news/healthcare-companies-shareholder-payouts-increasing-jama/739827/

Study: variance in county level utilization: Researchers examined data from 3110 US counties for 148 health conditions, 38 age-sex groups, 4 payers, and 7 types of care representing 76.6% of total spending for 2019. Findings:

64.8% of cross-county health care spending variation was explained by service utilization, while population age, disease prevalence, and price and intensity of services explained 4.1%, 7.0%, and 24.1%, respectively. The rate at which these factors contributed to variation in spending differed by payer, type of care, and health condition. Service utilization was associated with insurance coverage, median income, and education. An increase in each of these from the median to the 75th percentile was associated with a 7.8%, 4.4%, and 3.8% increase in ambulatory care utilization, respectively. The fraction of Medicare beneficiaries with Medicare Advantage was associated with less utilization. An increase in Medicare Advantage coverage from the median to the 75th percentile was associated with a 1.9% decrease in ambulatory care utilization. Differences in cross-state spending levels were also attributed to different factors. For Utah, the state with the least health care spending per capita, spending rates were lower for all types of care due principally to the young age profile. For New York, the state with the highest spending, spending rates were relatively high for hospital inpatient and prescribed pharmaceutical spending. For both types of care, high service price and intensity contributed to the above-average spending.”

Drivers of Variation in Health Care Spending Across US Counties February 14, 2025 https://jamanetwork.com/journals/jama-health-forum

Related: Commentary by JAMA Network Associate Editor: Health care spending in the US is high by global standards; within the US there is considerable geographic variation in spending as well. US health spending is roughly twice as high per capita as other high-income countries, and per capita spending varies 2-fold across hospital referral regions in the US… Less well understood and developed are the reasons for geographic variation within countries…

In a new study published in JAMA, Dieleman et al8 performed the painstakingly detailed work of generating county-level health care spending estimates from 2010 to 2019 for 148 health conditions, 38 age and sex groups, 4 payers, and 7 types of care. To generate these data, they harmonized more than 40 billion data points from claims data plus other administrative and survey data.

This study reveals broad variation in health care spending across US counties. Age-standardized per capita spending ranged from $2652 in Loving County, Texas, to $12 886 in Nassau County, New York, nearly a 5-fold difference. These data also show more spending for type 2 diabetes ($152 billion) than any other condition, followed by musculoskeletal disorders, oral disorders, and ischemic heart disease. Across types of care, 42.2% of health care spending was for ambulatory care. These data, available for download from the Global Health Data Exchange, offer unprecedented research opportunities to explore localized drivers of spending variation.”

Editorial “Understanding Geographic Variation in Health Care Spending” February 14, 2025. doi:10.1001/jamahealthforum.2024.5373

BLS: January CPI: “The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.5 percent on a seasonally adjusted basis in January, after rising 0.4 percent in December, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all-items index increased 3.0 percent before seasonal adjustment….

The medical care index increased 0.2 percent over the month. The index for prescription drugs increased 2.5 percent in January and the index for hospital services rose 0.9 percent over the month. The physicians’ services index increased 0.1 percent in January.”

Consumer Price Index Summary BLS https://www.bls.gov/news.release/cpi.nr0.htm

 

Governance

Corporate Board Member: 2025 Directors’ Survey: Key Findings from October 2023 survey of 200 corporate directors:

  • 76% of directors are prioritizing growth opportunities in 2025, a sharp turnaround from the past few years’ focus on cost-cutting measures.
  • 51% of respondents say that their board has reviewed its process for identifying and disclosing a cybersecurity incident, which suggests a potential gap in board-management communications on this issue.
  • 11% of directors consider shareholder engagement and activism a top priority, a significant downshift from prior years.
  • 41% of directors this year chose “strategy” as their top oversight challenge, ahead of all other issues in their purview.

2025 WHAT DIRECTORS THINK: A Changing Risk Landscape Based on survey of 200 .. https://boardmember.com/what-directors-think-2025-report/

 

Hospitals

Yale study on Investing in healthcare: “Consumers have grown accustomed to rising prices and red tape when filing a health insurance claim or filling a prescription. But for investors, health care has proven to be a lucrative industry to grow their returns.

Payouts to shareholders of large publicly traded health companies more than tripled over the past two decades, new research shows. In 2022, these companies paid $170 billion to shareholders in dividends and stock buybacks, a 315% increase over the $54 billion paid out in 2001, according to a study published Monday in peer-reviewed JAMA Internal Medicine.

A total of 92 companies that appeared in the broad S&P 500 index returned $2.6 trillion to shareholders from 2001 through 2022, according to the study.”

Yale School of Medicine Health Care Company Payouts Favor Shareholders, New Research Shows February 10, 2025 https://medicine.yale.edu/news-article/health-care-company-payouts-favor-shareholders-new-research-shows/

Kaufman Hall: % Operating cost increases 2023-2024 by region:

  National West Midwest south NE/Mid Atlantic Great Plains
Labor 5 6 4 6 3 5
Supply 9 10 6 9 7 10
Drug 0 11 8 7 6 12

 

Kaufman Hall Hospital Flash Report www.kaufmanhall.com

Study: PE acquired hospitals: Private equity (PE) acquisitions of health care providers are often framed as a monolithic intervention, but firms’ strategies for generating returns for investors may vary. In a difference-in-differences analysis using data from the 2005–19 Medicare hospital cost reports, we compared 242 US hospitals acquired by PE firms with 870 matched control hospitals not acquired by such firms. By firm, we examined changes in salary expenditures (reflecting staffing costs of delivering care) and cumulative charges (reflecting service utilization) associated with acquisition.

“On average, hospitals acquired by PE firms reduced salary expenditures, whereas control hospitals increased salary expenditures. At the firm level, salary expenditures declined between 12.9% and 27.3% of preacquisition levels. These reductions occurred across most clinical departments, although the specific departments and sizes of salary cuts varied across firms. Consistent with reduced staffing and capacity, most hospitals demonstrated a simultaneous decline in cumulative charges after acquisition—despite often raising their chargemaster rates (charges per service)—implying a reduced volume of services delivered. Some hospitals exhibited an alternative strategy of increasing cumulative charges without cutting salary expenditures. PE firms varied in management strategies, with most demonstrating cost cutting through salary expenditures.”

Variation In Hospital Salary Expenditures and Utilization Changes After Private Equity Acquisition, 2005–19 Health Affairs February 2025 https://www.healthaffairs.org/doi/full/10.1377/hlthaff.2024.00687

Study: use of AI in hospital predictive models: Researchers analyzed data from the 2023 American Hospital Association Annual Survey Information Technology Supplement to identify how AI and predictive models are used and evaluated for accuracy and bias in hospitals. Hospitals use AI and predictive models to predict health trajectories or risks for inpatients, identify high-risk outpatients to inform follow-up care, monitor health, recommend treatments, simplify or automate billing procedures, and facilitate scheduling. Findings:

We found that 65% of US hospitals used predictive models, and 79% of those used models from their electronic health record developer. 61% of hospitals that used models evaluated them for accuracy using data from their health system (local evaluation), but only 44% reported local evaluation for bias. Hospitals that developed their own predictive models, had high operating margins, and were health system members were more likely to report local evaluation.”

Current Use And Evaluation Of Artificial Intelligence And Predictive Models In US Hospitals January 2025 https://doi.org/10.1377/hlthaff.2024.00842

 

Insurers

CMS: Navigators funding cut: Last Friday, President Trump cut funding for health insurance navigators to $10 million annually, a tenth of its allocation in 2024, the Centers for Medicare and Medicaid Services announced Friday.

Exchange enrollment grew to more than 24 million this year, breaking the all-time high set in 2024.

CMS said the savings would reduce the user fee that insurance companies pay to sell policies on the federal exchange. That would lower consumer premiums and directly benefit people who signed up for health insurance exchange policies without tax subsidies, according to CMS.

Republicans must decide the future of the advanced premium tax credits that help people afford coverage this year. The enhanced subsidies expire at the end of 2025

CMS Announcement on Federal Navigator Program Funding February 14, 2025 www.cms.gov

 

Physicians

Study: Online reviews of physicians: Researchers sought to answer “Do patients perceive physicians differently in online written reviews based on female or male physician gender?” They examined 345,053 online reviews written between 2015-2017 of 167,150 physicians. Findings:

“Female physicians had lower odds than male physicians of receiving patient comments about their interpersonal manner. In some cases, female primary care physicians and surgeons either had higher odds of being penalized or lower odds of being rewarded by patients in star ratings for their interpersonal manner or technical competence.”

Physician Gender and Patient Perceptions of Interpersonal and Technical Skills in Online Reviews JAMA Netw Open. 2025;8(2):e2460018. doi:10.1001/jamanetworkopen.2024.60018

Study: Physician turnover after acquisition by PE: Researchers analyzed the association between the sale (2016-2018) of private equity (PE)–owned physician practices and subsequent physician turnover and employment decisions.

Context: “Private equity (PE) has become increasingly important in US health care over the last 20 years. Over 800 PE health care transactions were completed in 2022; total deal value over the preceding decade is estimated at $750 billion. Physician practices have become an attractive target: between 2010 and 2020, PE investors purchased over 1000 US practices.3 Typically, PE investors seek a return within 3 to 7 years.4 Some stakeholders have raised concerns that these short-term objectives may conflict with the longer-term interests of patients, payers, and physicians.”

Findings: “In this case-control study of 1215 physicians, those in practices sold by PE owners were 16.5% likelier to work elsewhere within 2 years after the sale and 10.1% likelier to join large (>120-physician) practices upon leaving than matched control physicians working in the same local markets and specialties in practices not sold by PE owners….The increase in physician turnover and consolidation following PE exits has important implications for patients, physicians, investors, and physician markets.”

Sale of Private Equity–Owned Physician Practices and Physician Turnover JAMA Health Forum. 2025;6(2):e245376. doi:10.1001/jamahealthforum.2024.5376

 

Polling

Poll: trust in system: From June-July, 2023, researchers surveyed 2039 US adults to understand whether they trust their health systems to use AI responsibly and protect them from AI harms. Findings:

“General trust in the health care system, on a scale of 0 to 12 with 12 indicating highest trust, had a mean (SD) score of 5.38 (2.18). Most respondents reported low trust in their health care system to use AI responsibly (65.8%) and low trust that their health care system would make sure an AI tool would not harm them (57.7%).”

Patients’ Trust in Health Systems to Use Artificial Intelligence JAMA Netw Open. 2025;8(2):e2460628. doi:10.1001/jamanetworkopen.2024.60628

Pew: Changes in Views about Covid 19: “The most significant pandemic of our lifetime arrived as the United States was experiencing three major societal trends: a growing divide between partisans of the left and right, decreasing trust in many institutions, and a massive splintering of the information environment.” Pew surveyed XXX adults October 24-27: Highlights:

  • “72% say the pandemic did more to drive the country apart than to bring it together.
  • 75% say the COVID-19 pandemic took some sort of toll on their own lives. This includes 27% who say it had a majortoll on them and 47% who say it took a minor toll.
  • Just 4% regularly wear a mask, while most never do. And fewer than half of U.S. adults said they planned to get an updated COVID-19 vaccine last fall, a stark contrast to the long lines and widespread demand that met the initial rollout of vaccines.
  • About half of U.S. adults or fewer now say their state elected officials (49%), Joe Biden (40%) and Donald Trump (38%) did an excellent or good job responding to the pandemic. A slim majority (56%) give positive ratings to public health officials, like those at the Centers for Disease Control and Prevention (CDC).
  • 79% of Democrats say public health officials’ response was excellent or good, while 35% of Republicans agree. Republicans’ positive ratings of public health officials fell 58 points between spring 2020 and the start 0f 2022.

5 Years Later: America Looks Back at the Impact of COVID-19 Pew Research February 12, 2025 https://www.pewresearch.org/politics/2025/02/12/5-years-later-america-looks-back-at-the-impact-of-covid-19

 

Population Health

Study: abortion rate changes after abortion ban: Researchers analyzed abortion rates after 6-week bans were enacted in 14 states.

“There were an estimated 1.01 additional births above expectation per 1000 reproductive-aged females in states following the adoption of abortion bans (60.55 observed vs 59.54 expected; 1.70% increase), equivalent to 22,180 excess births. Estimated differences were largest among racially minoritized individuals, those without a college degree, Medicaid beneficiaries, unmarried individuals, younger individuals, and those in southern states. Estimated differences in fertility associated with abortion bans were largest among people experiencing structural disadvantage and in states with among the worst maternal and child health outcomes.”

US Abortion Bans and Fertility JAMA February 13, 2025 https://jamanetwork.com/journals/jama/article-abstract/2830297

AEI: Fertility rate decline: “The US is facing an existential economic crisis driven by falling fertility rates. The US fertility rate is at 1.6—below the replacement rate of 2.1, or the fertility rate needed to sustain the population in the long run.

Fewer Kids, Bigger Problems: The fundamental accounting equation for economic growth is dependent on the growth rate of the labor force. With current population projections, the 2040s may see a growth rate of workers to be -1%—which could result in the US economy reaching only a 0.9%annual growth rate. Population growth is essential for more than just US economic growth. It is essential for funding programs like Social Security, Medicare, and Medicaid, in addition to servicing US public debt and financing the armed forces.

American Enterprise Institute www.aei.org

Bain: Likelihood of Seeking Care at Retail Store or Pharmacy: Percentage of consumers indicating they are likely to seek care at a retail store or pharmacy for:

  • Vaccinations: 71%
  • Common cold symptoms: 52%
  • Health screenings: 31%
  • Skin conditions: 26%
  • Urinary tract infections: 23%
  • Chronic disease management: 21%
  • GI symptoms: 19%
  • Blood work: 19%
  • Annual physical or checkup: 14%

Bain & Company, The Future of Primary Care: Traditional and Nontraditional Models Continue to Evolve, December 2024

3 major public health issues: “In 2022, there were more than 48,000 firearm-related deaths (more than half were recorded as suicides…nearly 108,000 drug-related deaths; and more than 51,000 alcohol-induced deaths. While these numbers made up a small fraction of the nearly 3.3 million deaths in 2022 in the United States, they disproportionately affected children and younger adults — and, as a result, lowered the U.S. life expectancy at birth. If these deaths were eliminated (and other causes of death remained the same), life expectancy at birth would increase by 1.6 years. “

Narrowing the Gap: The Burden of Alcohol, Drugs, and Firearms on U.S. Life Expectancy October 2, 2024 https://www.aamcresearchinstitute.org/our-work/data-snapshot/narrowing-gap

Study: Caregiver workforce: “Drawing on the linked National Health and Aging Trends Study and National Study of Caregiving, we found that the numbers of family caregivers providing help to older adults increased by nearly six million between 2011 and 2022, rising from 18.2 million to 24.1 million. Among older adults receiving care, network size was stable, at about two caregivers per older adult at both points in time. However, in 2022, family caregivers were assisting older adults who were younger, more likely to be male and better educated, and less likely to have dementia. We found few changes in competing work and child care responsibilities, weekly care hours, and caregiving-related difficulty. A smaller number of family caregivers were assisting fewer older adults with dementia, but in this group, co-residence increased by 25%, average care hours increased by 50%, and employment decreased. For family caregivers as a whole, challenges persist, and for those assisting people with dementia, tailored surveillance and effective support programs are needed.”

The Number Of Family Caregivers Helping Older US Adults Increased From 18 Million To 24 Million, 2011–22 February 2025 https://doi.org/10.1377/hlthaff.2024.00978

Report: senior housing: “Senior housing has been one of the biggest disappointments for commercial real-estate investors. Now thanks to millions of aging baby boomers, that may be about to change.

The oldest boomers turn 80 in less than a year. And by 2030, the U.S. population 80 years and older is expected to increase by more than four million people to 18.8 million. History suggests that a growing number of people conclude at that milestone age they can no longer live comfortably or safely at home and seek a senior facility…

High interest rates and inflated building costs are leading most senior housing developers to avoid new construction.

For starters, Green Street says about half of seniors can’t afford private senior housing communities, which generally require residents to pay out-of-pocket and don’t accept third-party reimbursements. Average monthly rents are above $4,100 for independent living units and $6,400 for assisted living units that include more care.

Still, baby boomers are the wealthiest generation in the U.S. Many have paid off mortgages on homes that have soared in value. More than 40% could afford senior housing from income alone, up more than 10%from 2017…

But about 35% of seniors who could afford senior housing opt not to use it, Green Street said. They prefer to age at home closer to friends and family, something that is being made increasingly possible by advances in design and technology.”

Aging Boomers Are About to Rekindle the Senior-Housing Market https://www.wsj.com/economy/housing/aging-boomers-are-about-to-rekindle-the-senior-housing-market-

 

Prescription Drugs

ProPublica Investigation: Gene therapy pricing: Reporting Highlights: “The gene therapy Zolgensma helped children born with a fatal disease, spinal muscular atrophy, grow up to run and play. But the cost was stunning: $2 million per dose. While taxpayers and small charities funded the drug’s early development, executives, venture-capital backers and a pharma giant have reaped the profits. The drug’s cost adds to the nation’s ballooning bill for prescription drugs and puts Zolgensma out of reach for kids in many low- and middle-income countries.

Zolgensma’s price quickly became the standard for gene therapies. Nine of them cost more than $2 million. A tenth, approved in November, is predicted to run about $3.8 million, just shy of the most expensive, also approved last year, which costs $4.25 million a dose.”

What a $2 Million Per Dose Gene Therapy Reveals About Drug Pricing ProPublica February 12, 2025 https://www.propublica.org/article/zolgensma-sma-novartis-drug-prices-gene-therapy-avexis