Today marks the 15th anniversary of the Patient Protection and Affordable Care Act (ACA). It is the most consequential and controversial health legislation in our country’s history since LBJ’s Social Security Amendments created Medicare and Medicaid in 1965.
When passed March 23, 2010, 41% of adults held a favorable view of the law vs. 44% who were unfavorable. Today, 64% have a favorable view vs. 36% unfavorable (KFF). The 900-page law sought expansion of insurance coverage, reduced health costs and improved quality of care. But its results to date are mixed: coverage increased from 84% to 92% but costs have grown unabated and quality improvements have been significant in some areas and negligible in others.
In retrospect, the ACA is fundamentally flawed because it failed to recognize changes in the healthcare marketplace upon which systemic improvements could be achieved:
1-The basic structure of the U.S. healthcare market has fundamentally changed since 2010. The “Patient Protection and Affordable Care Act” was premised on a system that regarded each sector’s role distinct and the federal government its primary supervisor. State responsibilities were delegated by federal laws and funding for the system was primary sourced from employer contributions and federal taxes.
In the 15 years since passage, total health spending has increased from $2.6 trillion to $5.1 trillion—up 58% vs. while the 10% population grew only 10% in the same period. In 2010, healthcare spending was 17.9% of total GDP; last year, it was 18.3%; and in 2032 it will be 19.7%. In tandem, bigger organizations in each sector have gained achieved market dominance at the expense of smaller operators concentrating power, Influence and media attention on fewer organizations as each executed a ‘Big Business’ playbook:
- Horizontal consolidation: acquisitions of competitors in the same sector to reduce costs, increase leverage with trading partners and maximize profitability in their core businesses.
- Vertical integration (diversification) accelerated to de-leverage organizations from margin-pressured core businesses and increase opportunities in adjacent sectors.
- Access to private capital: private equity and strategic partnerships have enabled faster adaptation to shifts in demand, competition and innovation
- Influence: effective advocacy/lobbying at the federal and state levels has protected incumbents against unwelcome regulation.
The ACA did not foresee the economic juggernaut the industry would become nor the concentration of power in its biggest organizations. A planning process that included substantial input from large employers, private investors and technology companies would have produced a different result.
2-New technologies render many of the ACA’s operational assumptions obsolete. The ACA presumed inter-operability could be achieved and transparency about prices, quality and scientific evidence advanced. Key elements in the law—the Patient Centered Outcome Research Institute, National Quality Strategy, Comparative Effectiveness Research, National Workforce Commission, CMS Innovation Center, Administrative Simplification et al—were vehicles intended to match policies with emergent technologies and new ways of delivering products and services.
However, most of these efforts saw modest success: some were never implemented, some focused on politically-correct programs of negligible value, and most focused almost exclusively on Medicaid/Medicaid neglecting the private sector majority. And all presumed the regulatory environment for health services would see incremental changes reasonably comfortable to the industry’s inside stakeholders. That’s why drug patent laws stayed in tact for the most part, why physician owned hospitals were disallowed, why insurers maintained proprietary procedures for utilization and denial management, why doctors maintained supremacy over other professions in matters of clinical judgement and why inside players pushed back at public transparency about costs, prices and business practices.
The potential of artificial intelligence, machine learning, large-language models, customized therapeutics, self-care diagnostics, Big Data and other technologies coupled with an influx of non-healthcare tech sponsors was unforeseen by ACA authors.
Technologies have fundamentally changed higher education, banking, retail and every other industry. Perhaps by design, the health system has been a laggard. The ACA was complicit.
3-The public’s view of the U.S. health system is negative and getting worse. Polls show consumers are dissatisfied with the U.S. health system and want change. Affordability is their biggest concern: most think the system’s key players put their financial interests above caring for people in need. This view is coincident with discontent about the overall direction the country is heading and widespread concern about the economy:
- 25% of adults think the country is heading in the right direction vs. 59% who think its going in the wrong direction and 16% who aren’t sure (Economist/YouGov Poll December 2024). In the same poll, 36% said they hold a favorable view of the U.S. health system vs. 54% who hold an unfavorable view. And 22% think the system “works pretty well and requires only minor changes, 45% think the system needs “fundamental changes”, 23% say the system “needs to be fundamentally rebuilt” and 9% aren’t sure. improvement
- In Gallup’s surveys about institutional confidence, 36% expressed a “great deal/quite a lot” of trust and confidence in the medical system vs. 29% who said “very little/none” in 2024; in 2010, 40% expressed confidence and 20% were unfavorable.
The ACA passed at a time when the public’s mood was more positive and its predisposition toward the health system less critical. Today, the public’s trust and confidence in both is low. Passage of a law that improves access to health insurance coverage—even with popular features like protections for pre-existing conditions and cessation of lifetime limits—would not enjoy majority support today due to widely held antipathy toward health insurers that deny care unnecessarily and prices for premiums, prescription drugs and hospital out of pocket cost.
The ACA underestimated the role public opinion plays in healthcare. Insiders in healthcare—trade associations and companies they represent—are prone to false assumptions about the salience of public attitudes and beliefs. In the design of the ACA, the public was neglected.
My take:
In the lead-up to the passage of the Affordable Care Act, I had the opportunity to facilitate meetings between the White House Office of Health Reform and trade associations representing the private sector: AHA, AMA, AHIP, AdvaMed, PhrMA and BIO. Subsequent to those sessions in 2009, I had occasion to testify to Congressional Committees, meet with elected leaders from both parties, engage with each of the trade groups, opine in media coverage about the law and even explain it to the “red hatters” at the Martin Center in Brentwood, TN at my mother’s request. And I have monitored its journey in health policy and politics since. My conclusions are these:
The ACA defaulted to a focus on insurance coverage and neglected attention to cost containment and quality improvement. As its implementation unfolded from 2010-2013, insurance coverage drew the lion’s share of attention and political opposition grew. Key amendments i.e. the deletion of mandates (proposed by conservative think-tanks to stabilize risk pools) and the June 2012 Supreme Court decision that delegated Medicaid expansion to states neutered its impact. Would-be systemic reforms became incremental changes comfortable to insiders and non-responsive to outsiders.
The ACA is fundamentally flawed because its Beltway-based collaborators did not accurately assess the environment and assumed incremental improvement to the status quo was enough. They were wrong; the public’s demanding more.
The ACA is an important component in health policy today but its fundamental flaw should be acknowledged.
Paul
Quotables
Jeanne Lambrew on the ACA: “At its 15th anniversary, the Affordable Care Act (ACA) has largely met its original goals. At enactment in March 2010, the Congressional Budget Office (CBO) projected that 95% of nonelderly Americans (92% of residents including undocumented immigrants) would have health insurance shortly after full implementation. That target has recently been met. Indeed, the U.S. has had record-high health coverage rates in 2022, 2023, and the first half of 2024.
Similarly, the law’s twin goal of making health coverage affordable as well as accessible was achieved. Between 2010 and 2023, health spending as a percent of gross domestic product did not significantly increase, except for during the peak of the pandemic when all measures were askew. Along the way, the law also implemented changes to public health (e.g., menu labelling), innovation (e.g., pathway for biosimilar drug approvals), and quality (e.g., reduced hospital readmissions).
That said, no straight line can be drawn from the ACA’s design at passage to its shape and reach at present. There have been many moments of high-drama such as the 2012 Supreme Court decision in which one justice’s vote prevented the invalidation of the entire law; a 2013 epic website crash and recovery; and the 2017 midnight thumbs-down vote against repeal from Senator John McCain…The ACA has touched the lives of every American, proving that improving the U.S. health system is possible. It can, and demonstrably should, inform further improvements.”
Jeanne Lambrew The Affordable Care Act At Fifteen: Policy Surprises And Lessons https://www.healthaffairs.org/content/forefront/affordable-care-act-fifteen-policy-surprises-and-lessons
AEI on long-term national debt: “Within the next twenty or so years, we find the federal government debt will grow significantly beyond historical experience and should be regarded as unsustainable. We project that debt-to-GDP will be 126% in 2033, 179% in 2043, and 256% in 2053, compared to CBO’s 115%in 2033 and 166% in 2053. Real interest rates rise in the long run, ratcheting interest payments, deficits, and debt in a vicious cycle. Our projection of national health expenditures relative to GDP in 2073 is 30.2%, compared to 28.5% by the Centers for Medicare and Medicaid Services (CMS) in its alternative projection. These higher costs of health care arise from labor shortage effects in an aging economy because health care is produced in a low productivity, labor-dependent sector. Health care expenditure increases further deteriorates the federal budget and lowers consumer welfare. We propose that our model serve as the basis for the Trustees Reports and the Financial Report of the U.S. Government.”
A New Long-Run Economic Model Basis for Projecting the Finances of the US Government AEI Economic Policy Working Paper Series
Medicare, Medicaid spending: “At 60 years, Medicare and Medicaid continue to evolve, but their costs are growing rapidly and draining resources from other priorities. Meanwhile, silos between health and social service programs hamper innovative local initiatives to tackle upstream factors influencing household and community health. Reforms to Medicaid and Medicare over the next 4 years will be unsuccessful unless they address these central features of the programs.”
Stuart M. Butler, Whither Medicaid and Medicare at 60? JAMA Health Forum March 20, 2025;6(3):e251086. doi:10.1001/jamahealthforum.2025.1086
Economic slowdown: “Business Insider has heard from retirees watching their investments fluctuate in the stock market, parents struggling with the high cost of groceries and childcare, and business leaders bracing for a downturn. This comes alongside the Trump administration’s roller-coaster tariff announcements and sweeping cuts to the federal workforce. The US may not be in a recession yet — but we are in a vibecession.
This growing distrust could have serious consequences, as a fear-driven pullback in spending is one step toward an actual downturn. Cynical shoppers may avoid nonessential purchases, businesses could pause hiring, and investors might step back from the market. And the slower the economy, the weaker it becomes….
The vibecession is back
The vibecession rears its head whenever Americans are feeling particularly uncertain about the economy. Even if the major economic indicators aren’t alarming on paper, rapid changes on Wall Street and in the White House historically make consumers and businesses nervous…
Don’t call it a recession — but bad vibes are back in a big way.”
Business Insider March 19, 2025 https://www.businessinsider.com/tariffs-inflation-recession-fears-consumer-sentiment-doge-layoffs-economy-2025-3
Frist on healthy environment: “When I first learned that a life-saving drug like cyclosporine was discovered in a mere soil fungus, it blew my mind. Here was a tiny organism from the dirt – something easily overlooked – that held the key to successful organ transplants. I remember thinking: What other miracles might be hiding in nature, waiting for us to notice? This personal revelation sparked a broader realization. Just as that fungus contained an untapped solution for human health, our planet’s forests, wetlands, grasslands, and reefs hold untapped solutions for the changing climate and our well-being. In the face of today’s environmental crises, nature itself may offer some of the best tools to heal the world – if we choose to embrace them.”
PK note: Bill’s been a friend for 30 years. His appetite for healthcare innovation is exceeded only by his passion to define health and wellbeing beyond the conventions of diagnostics and therapeutics on which the current system is based.
Bill Frist, Chair, The Nature Conservancy March 12, 2025
RFKJ on eating healthy: “We eat too much and lots of it is stuff that isn’t good for us. Some ultra processed foods in our kitchens have too many unpronounceable chemicals on the labels. We have a high burden of diet-fueled chronic disease, including diabetes.
But there’s a catch. Several catches, actually. RFK Jr. — or any secretary of Health and Human Services for that matter, Democrat or Republican — can’t fix it by himself.
HHS doesn’t have oversight over all food and nutrition products and policies. Nor does the Food and Drug Administration, which is under HHS. Much of that is up to the U.S. Department of Agriculture. They may collaborate with Kennedy. Or they may not.”
The limits of RFK Jr.’s power Politico March 19, 2025 https://www.politico.com/newsletters/politico-nightly/2025/03/19/the-limits-of-rfk-jr-s-power-00239690
On telehealth policy: “Since the onset of the COVID-19 pandemic, telehealth has primarily survived in Medicare through a series of temporary measures. These flexibilities, which allowed patients to receive care from their homes, enabled audio-only visits, expanded provider eligibility, and revolutionized access to care. These measures were successful in making telehealth more accessible. Early in the pandemic, there were more than two million telehealth visits per week in the Medicare program (more than 40 percent of all visits).
Yet, the temporary and last-minute nature of these extensions (in the March 2025 continuing resolution) is at odds with the reality of clinical practice in ways that continue to undermine telehealth use…
Moreover, the lack of permanence stifles innovation. Without certainty about telehealth’s future, technology developers and health care providers are hesitant to invest in new tools and models of care that would build on telehealth platforms…
Permanent telehealth reform is not just a policy priority—it is a necessity. Without it, providers will struggle to sustain their services, patients will face unnecessary barriers to care, and the health care system will miss out on a critical opportunity to innovate. It is time to stop kicking the can down the road and take decisive action to secure the future of telehealth for patients and providers.”
Congress Can Unlock The Full Potential Of Telehealth Through A Permanent Fix March 4, 2025 https://www.healthaffairs.org/content/forefront/congress-can-unlock-full-potential-telehealth-through-permanent-fix
On hospital food quality: “Because of the health harms of smoking, the sale of tobacco products has been effectively banned on hospital campuses for more than three decades. If one of those hospitals suddenly began selling cigarettes to their patients again, the public would be outraged. Yet, these same institutions sell soda, candy, and processed meats, and no one bats an eye.
Like cigarette smoking, habitual intake of foods high in salt, sugar, and saturated fats can lead to poor health, diminished quality of life, and severe complications from chronic illnesses. Despite unhealthy diets surpassing smoking as the leading cause of death in the US, hospitals consistently fail to serve food that meets national dietary guidelines. Many hospital vending machines offer drinks containing more than a day’s worth of sugar. And most of the nation’s teaching hospitals still contract with fast-food restaurants to provide cafeteria meals. These practices not only contradict the mission of health care institutions but undermine patient care. Hospitals don’t sell cigarettes, and they shouldn’t sell junk food either…
If the US government and health care sector are really committed to the idea that Food Is Medicine, then they need to start by improving foods served in health care settings.”
If “Food Is Medicine,” Why Are Hospitals Still Serving Junk? Health Affairs March 19, 2025https://www.healthaffairs.org/content/forefront/if-food-medicine-why-hospitals-still-serving-junk
Axios on new vocabulary in healthcare: “Pharmaceutical companies and other health interests are increasingly using terminology associated with HHS Secretary Robert F. Kennedy Jr.’s public health movement as they seek to work with the new administration… Kennedy’s philosophy, built around skepticism of corporations and mainstream science and promoting chronic disease prevention, has its own vernacular. Phrases like “radical transparency” appear regularly in government statements…Some recent industry messaging has contrasted with language from the Biden administration’s rhetoric centered on accessibility, affordability and social determinants of health… Many companies promoted wellness and acknowledged public anger with the health system following the pandemic before Trump took office for his second term…”
Health orgs tweak messaging as federal policy priorities shift Axios March 20, 2025 https://www.axios.com/2025/03/20/health-terminology-trump-administration-
Muhlenstein on usefulness of price transparency data: “Price transparency is a long sought-for goal in health care that seemed out of reach for many years… On February 25, 2025, President Trump issued an executive order confirming this administration’s strong support of price transparency and directing multiple departments to issue updated regulatory guidance to strengthen price transparency within 90 days.
Despite challenges and limitations with the data in its current form, I have found the data to be incredibly useful with the potential to bring significant value to the health care system. Examples include (1) academic work to assess how hospital market share is related to commercial rates, (2) creating market-level metrics to understand regional variation in prices, and (3) working with multiple different health care organizations to understand, for the first time, what market rates actually are.”
PK note: David’s astute take on price transparency data usefulness is spot on. In healthcare, our issue is not data, it’s having tools and methodologies (algorithms et al) to make it current, valid, manageable and relevant to answers needed for pressing issues.
David Muhlestein, PhD, JD, is the founder and CEO of Simple Healthcare. “Improving Price Transparency Data: Recommendations From Practice”, Health Affairs Forefront, March 19, 2025 . DOI: 10.1377/forefront.20250314.64424
Patel on Covid-19, public health: “Five years after the start of the pandemic, America stands fractured yet paradoxically transformed. The crisis magnified our deepest divides — urban versus rural, privilege versus poverty, individualism versus collective survival — while stress-testing democracy itself. Yet from this crucible emerged unexpected resilience: telehealth revolutions, remote work permanence and newfound reverence for grocery clerks and nurses.
America’s public health vulnerabilities aren’t merely systemic; increasingly, they’re by design.
Now comes the existential task: weaving these fractured realities into a national tapestry that honors both our losses and our adaptations. The pressing question isn’t whether we’ll face another pandemic, but whether we can reconstruct a society in which Lorena’s oxygen tubing and Wall Street’s recovery packages occupy the same moral universe.
The answer to this question will determine whether we can confront the H5N1 outbreaks now spreading through Midwest dairy farms, reverse plummeting childhood vaccination rates’ fueling measles resurgences in 32 states and address climate-driven disease vectors creeping northward — all while navigating a political landscape in which pandemic-era fractures have metastasized into active hostility toward public health institutions.
Our capacity to rebuild trust in science and bridge these divides may prove the ultimate test of whether Lorena’s story becomes a relic of 2020s failures or a harbinger of a 2030s collapse.”
Kaveta Patel Covid fractured American society, and five years later, we still haven’t healed March 12, 2025 https://www.msnbc.com/opinion/msnbc-opinion/five-years-covid-pandemic-america-divided-rcna192304
CMMI on primary care alternative payment models: “Primary care remains a foundational component of the Center’s strategy. The early termination of Primary Care First and Making Care Primary does not signal a retreat from the Center’s support of primary care providers, but rather a need to focus on different approaches that are consistent with the CMS Innovation Center’s statutory mandate and produce savings.”
CMS Innovation Center Announces Model Portfolio Changes to Better Protect Taxpayers and Help Americans Live Healthier Lives March 12m 2025 https://www.cms.gov/newsroom/fact-sheets/cms-innovation-center-announces-model-portfolio-changes-better-protect-taxpayers-and-help-americans
Corporate Healthcare (from corporate announcements last week)
Purdue Pharma Files New $7.4B Ch. 11 Plan: Bankrupt OxyContin maker Purdue Pharma LP filed a new Chapter 11 plan in a New York bankruptcy court, including a $6.5 billion payment from members of the Sackler family.
HCSC acquiring Cigna Medicare Advantage business. Last week, Health Care Service Corporation (HCSC) announced that it had completed the $3.3 billion acquisition of Cigna’s MA, Medicare Supplemental Benefits, Medicare Part D and CareAllies businesses. Cigna will continue to provide pharmacy benefits for the next four years.
UnitedHealth Group: OptumRx is changing the way it pays pharmacies, reimbursing them more for branded drugs and less for generics.
Weiss Law Firm: Last Thursday, the law firm Paul Weiss agreed to give Donald Trump’s administration $40 million in free legal work for causes the president supports and suspend its internal DEI policies.
Medically Home- Dispatch Health merger: Hope to achieve scalable care coordination platform in the hospital-at-home market.
Accenture: shares dropped 7.3% based on DOGE threat to eliminate its contracts with the federal government (first of 20 professional services firms targeted).
Medalogix-Focura merger: Nashville, -based Medalogix and. Jacksonville-based Focura will focus on post-acute care coordination leveraging their technologies.
Big Law: “The Trump administration continues to openly target Big law firms for their representation of clients and causes adverse to the president’s political agenda. Three top firms — Covington & Burling, Perkins Coie, and Paul Weiss — have found themselves on the receiving end of Trump’s retaliatory executive orders, which strip attorneys of their security clearances, terminate the firms’ government contracts, and limit lawyers’ access to government buildings. On top of these (likely unconstitutional) executive actions, Trump has sicced the EEOC on 20 additional Biglaw firms over their DEI policies, with the agency launching full-scale investigations into their alleged “unlawful” employment practices.
Although associates have spoken up on these issues, Big law leadership has largely remained mum, perhaps in the hope of avoiding Trump’s notice. Unfortunately, there may be no escaping the president’s wrath, and everyone is silently wondering who could be next.”
Which Big law Firms Could Be the Next to Face Trump’s Wrath? March 19, 2025 https://abovethelaw.com/2025/03/which-biglaw-firms-could-be-the-next-to-face-trumps-wrath
Economy
Total Health care spending 2010-2019:
- Of total spending, 42.2% was on ambulatory care
- 8% was on hospital inpatient care
- 7% was on prescribed retail pharmaceuticals
JAMA, Tracking US Health Care Spending by Health Condition and County, February 2025
OECD analysis: tariff impact: “Higher U.S. tariffs on imports are set to slow economic growth and push inflation higher around the world, with further increases threatening an even more severe downturn, the Organization for Economic Cooperation and Development said.
In a quarterly report published Monday, the Paris-based research body cut its growth forecasts for most of the world’s largest economies over this year and next, the main exceptions being China, Argentina and Turkey.
Its largest downgrades were reserved for the two economies that trade most heavily with the U.S. and face significantly higher barriers to their exports. The OECD now expects Mexico’s economy to contract by 1.3% this year and 0.6% in 2026, having previously forecast growth of 1.2% and 2.8%. For Canada, it now expects growth of 0.7% in both 2025 and 2026, having previously forecast expansions of 2%.
The OECD said the U.S. economy will now likely grow by 2.2% this year and 1.6% next. It previously forecast growth of 2.4% and 2.1%.”
U.S. Tariff Increases to Slow Global Economy, Boost Inflation, OECD Says: Its largest growth-forecast downgrades were for Mexico and Canada WSJ March 17, 2025 https://www.wsj.com/economy/global/u-s-tariff-increases-to-slow-global-economy-boost-inflation-oecd-says-f0966ee1?mod=itp_wsj,djemITP_h
Private debt market growth: “In 2024, private debt fundraising reached $197.1 billion, firmly establishing itself as the second-largest strategy in private capital markets behind only private equity. Notably, private debt overtook venture capital for the second straight year, driven largely by sustained demand for steady income generation and high risk-adjusted returns…
Private debt funds experienced robust inflows as investors looked to capitalize on exposure to floating-rate debt, which benefited from higher interest rates. Lower rates may diminish some investor interest, but ongoing structural shifts in the financing markets, such as the gaps created by the withdrawal of traditional bank lenders, robust demand for financing for middle-market companies, and companies staying private for longer, point to continued expansion of the private debt market.”
Pitchbook Global Private Debt Report March 18, 2025 https://files.pitchbook.com/website/files/pdf/2024_Annual_Global_Private_Debt_Report.pdf
Wellness market and home buying: “More people are integrating wellness-focused amenities into their homes, from wet rooms and private gyms to meditation rooms and gardens, according to Zillow. The real-estate giant found that as of December, the share of for-sale listings mentioning wellness-oriented amenities had risen by 16% from the year before. Homeowners today want more than just attractive spaces — they want places that actively support their physical and mental health.”
They tried to build the healthiest home in America Business Insider March 22, 2025 https://www.businessinsider.com/biohackers-build-house-to-help-them-live-longer-cost-features-2025
Research funding: “Last week’s deal to fund the government through Sept. 30 will likely result in a 3.7% cut from the estimated FY24 funding levels for federal research and development, according to the American Association for the Advancement of Science.
One concern is whether the Trump administration will actually spend that money, or make steeper cuts through a rescissions package that could further buffet biomedical research, Nature reported.”
1 big thing: Fallout from Trump research cuts Axios Vitals March 19, 2025 https://www.axios.com/newsletters/axios-vitals
Hospitals
Kaufman Hall Hospital Flash Report March 17, 2025: Key Takeaways:
- Hospital performance remains stable at the start of 2025. This is due to a confluence of greater service volume and rising expenses.
- Expenses continue to be driven primarily by the cost of drugs. However, the rate of cost growth has slowed considerably.
- Inpatient revenue grew more quickly than outpatient revenue in January. More patients were treated in the hospital and emergency room.
Kaufman Hall | National Hospital Flash Report
Modern Healthcare on Site neutral payments: “While congressional Republicans hunt for hundreds of billions of dollars in healthcare cuts, an old, bipartisan idea seems poised for a comeback: “site-neutral” Medicare reimbursements for outpatient care.
This policy, which the hospital sector opposes and health insurers endorse, would require health systems to charge the same prices for services whether they are performed in a hospital or another location. Lawmakers advanced numerous proposals in 2023 and 2024 that would have implemented some version of site-neutral payment rules, such as barring hospitals from adding facility fees to claims or setting higher prices for services such as telehealth services or off-site drug injections.
Another push for site-neutral legislation is coming from insurers…Hospital representatives, however, are also making the case against site-neutral payments to lawmakers, and they have been successful in fending off such efforts since Congress passed a site-neutrality law in 2015 that left out most hospitals.
Their argument is that hospitals provide greater levels of safety than off-site facilities and must support much greater overhead costs, including round-the-clock staffing and advanced medical equipment.”
Right place, wrong time: BCBS insurers report Medicare gains March 18, 2025https://www.modernhealthcare.com/insurance/bcbs-blue-cross-medicare-advantage-market
Hospital ED, prior authorization logjam: Patients waited an average of 12.8 hours in an emergency department for an inpatient bed in 2023..That wait time has stayed relatively consistent since the COVID-19 pandemic, when the number of patients and wait time for emergency department boarders spiked.
“The pandemic increased post-acute provider staff turnover, limiting capacity. Most insurers have also steadily ramped up prior authorization requirements, potentially keeping a patient waiting in an inpatient bed for longer than necessary as clinicians wait for insurers to sign off on a skilled nursing facility placement, health system executives said. Patients are also coming to hospitals sicker, and some don’t have transportation or care support at home, requiring them to stay at hospitals longer.”
Health systems struggle to manage emergency department overflow Modern Healthcare March 19, 2025 https://www.modernhealthcare.com/providers/emergency-department-boarding-overflow
Rural Emergency Hospital status: Congress created the REH option for rural hospitals in 2023. The government pays these hospitals a fixed sum each month — over $3 million annually — instead of reimbursing them for the inpatient services they provide. Medicare also adds 5% to their payments for outpatient services.
To date, just 38 hospitals have taken up the new designation though 110 have closed since 2005, and another 85 have converted to only provide outpatient services only. Per the University of North Carolina’s Cecil G. Sheps Center for Health Services Research, the number of annual closures or conversions peaked at 17 in both 2019 and 2020, and have declined since to 5 in 2023 and 5 last year.
“Becoming a REH means giving up inpatient care. These hospitals still operate emergency rooms and treat patients on an observation basis, which can entail overnight stays, as well as provide outpatient care and operate labs.
For most eligible hospitals, though, the cons outweigh the pros. The biggest downside, several hospital leaders said, is the fact that REHs can’t have swing beds… Another big inhibiting factor is the fact that REHs can’t participate in the 340B Drug Discount Program, which requires drugmakers to give roughly 25% to 50% discounts on outpatient drugs to hospitals that treat low-income patients. In 2023, prescription medicines purchased under the program totaled $66.3 billion, a 23.4% increase over the prior year. “
Congress created a unique plan to save rural hospitals — but few are using it StatNews March 18, 2025 https://www.statnews.com/2025/03/18/rural-health-care-emergency-hospital-designation-underused-because-of-rules-on-swing-beds-340b-drugs
Insurers
MACPAC on Medicaid managed care external quality review process: “Managed care is the primary health care delivery approach in Medicaid, with 73% of beneficiaries enrolled in a comprehensive, full-risk managed care organization (MCO) (MACPAC 2024a). As enrollment in Medicaid managed care has increased, so too has the total share of Medicaid expenditures made through capitation payments to managed care plans; in fiscal year 2023, managed care capitation payments accounted for more than half (56%) of Medicaid benefit spending (MACPAC 2024b).
We found that EQR activities focus predominantly on process and compliance rather than measurement of the managed care plans’ performance. Also, stakeholders expressed challenges with their understanding of states’ reporting of EQR findings based on a lack of context and summarization as well as the length and complexity of reports. Finally, we found stakeholders, including beneficiaries, had difficulty accessing EQR reports due to the absence of a centralized repository.”
March 2025 Report to Congress on Medicaid and CHIP March 17, 2025 https://www.macpac.gov/publication/march-2025-report-to-congress-on-medicaid-and-chip/
Chronic Special Needs Plans (C-SNP): “Health insurance companies and home care providers see caring for chronically ill Medicare patients as their next growth opportunity.
For 2025, insurers such as UnitedHealth Group subsidiary UnitedHealthcare, Alignment Health and SCAN Health Plan invested in Chronic Condition Special Needs Plans, which are Medicare Advantage plans for those with severe chronic conditions including diabetes, hypertension and kidney failure. They added new supplemental benefits, developed care management programs targeting additional disease states like depression and expanded where they sold policies.
Their focus drove enrollment up 67.3% to 1.1 million enrollees in February, the greatest annual rise in the program’s 13-year history… The growth could translate into more business for companies such as WellBe Senior Medical, HarmonyCares, Patina Health and DispatchHealth that partner with health plans to treat older adults, including those with chronic conditions, at home.
Congress permanently authorized special needs plans 7 years ago, although insurers have been selling the policies since 2008. Companies initially focused on marketing to people dually eligible for Medicare and Medicaid and the market reflects that legacy. Dual Eligible SNPs (D-SNP) comprise 83.2% of the 7.3 million special needs plan enrollees in 2025…Approximately 80% of Medicare-eligible adults, or 50 million people, have at least two chronic conditions, and 27%, or about 17 million people, have multiple chronic illnesses, according to the National Council on Aging, an advocacy group.”
Insurers, in-home providers chase C-SNP Medicare Advantage market March 20, 2025 https://www.modernhealthcare.com/insurance/c-snp-market-unitedhealth-scan-2025
Physicians
Residency matching results: 2025: Per the National Resident Matching Program (NRMP) results reported last week:
- Of 52,498 applicants who were registered, 47,208 submitted a certified rank order list to compete for 43,237 positions– up 4.2% from 2024.
- Of the active applicants, 37,667 matched to a postgraduate year 1 (PGY-1) position, representing an increase of 4.7% from last year.
- “This year, U.S. DO seniors saw a 92.6% match rate — an increase of 0.3%– representing an all-time high. U.S. MD seniors, the largest group participating in the Match with 20,368 active applicants, again had a 93.5% match rate, remaining unchanged from 2024 and close to the percentage around which it has hovered since 1982.
- Primary care specialties saw a 93.5% fill rate this year, up slightly from last year. Of note, pediatrics was taxed in last year’s Match , with its fill rate declining from 97.1% to 91.8%. However, the specialty rebounded this year, clocking a 95.3% fill rate despite offering slightly more positions. There also was renewed interest in emergency medicine, with a 2.4 percentage point growth over last year in fill rate to 97.9% while offering a score of additional positions.”
National Resident Matching Program® Releases the 2025 Main Residency Match® Results, Celebrates the Next Generation of Physicians March 21, 2025 www.nrmp.org
Medicare Advisory Payment Commission recommendation on physician pay: MedPAC is recommending tying the rate of physician and other health professionals’ payment increases in 2026 to the Medicare Economic Index minus 1 percentage point. Note: a pay increase was not included in the budget for the rest of FY25 passed by Congress March 14.
MedPAC recommends Congress tie physician pay to inflation for 2026 March 20, 2025
Wallet Hub: Physician satisfaction: “Doctors have one of the most essential professions, and they are well compensated for the hard work they do to keep patients healthy. They are among the highest-paid and most educated professionals in the U.S., with family medicine physicians having a median salary of $225,000 per year. The high salary makes sense, given the importance of their life-saving work and the struggles that come with life in the medical profession. However, doctors don’t start out wealthy. The average medical-school debt is around $235,000.
… WalletHub compared the 50 states and the District of Columbia across 19 key metrics. Our data set ranges from the average annual wage of physicians to the number of hospitals per capita to the quality of the public hospital system.”
- Best state to practice: #1: Montana, #51: Hawaii
- Average annual wage: Highest: Mississippi, Lowest: DC
- Projected competition by 2032: Lowest: Mississippi, Highest: DC, RI, NY
PK Note: the methodology used by Wallet Hub is based on 19 factors that are weighted across 2 major domains. Physician income and practice environment. While plausible, factors related to practice operating costs and physician employment options ate not adequately considered.
Best and Worst States for Doctors 2025 Wallet Hub March 18, 2025https://wallethub.com/edu/best-and-worst-states-for-doctors/11376
Bain physician survey: “There’s a widening chasm in the healthcare workforce: Physicians at practices owned by or serving hospitals and healthcare systems are almost three times more likely to be dissatisfied than those at practices owned by physicians.” Key findings:
- 25% of physicians in health system-led organizations are contemplating a change in employers, compared to just 14% in physician-led practices. Of those considering a switch, 37% are looking to move to physician-owned settings.
- Additionally, 61% of employed physicians said they have moderate or no autonomy to make referrals outside of their practice or ownership system, and 47% said they adjust patient treatment options to reduce costs based on practice policies or incentives,..
- While employment in a hospital or healthcare system offers stability, it lacks the same long-term financial upside as ownership.”
Boosting Physician Satisfaction: Lessons from Physician-Owned Practices | Bain & Company
Population Health
Gallup World Happiness Report 2025: Based on averaging six major factors across polling and behavioral data from 147 countries for 2022-2024 compared to similar scores a decade earlier, Gallup concluded “three types of benevolent acts – donating, volunteering, and helping strangers – changed during the COVID-19 years…
Another central social issue relates to the distribution of wellbeing., we show how living in a society believed to be benevolent mitigates the harmful effects of unfortunate circumstances and thereby reduces the inequality of wellbeing…
In general, the western industrial countries are now less happy than they were between 2005 and 2010. 15 of them have had significant drops, compared to 4 with significant increases.8 Three western countries had drops exceeding 0.5 on the 0–10 scale (the United States, Switzerland, and Canada) putting them among the 15 largest losers.”
The U.S. was 24th of the 147—worst ever– well-behind the happiest Nordic countries and Finland, first for the eighth year running. America’s all-time high was 11th in 2012.
Helliwell, J. F., Layard, R., Sachs, J. D., De Neve, J.-E., Aknin, L. B., & Wang, S. (Eds.). (2025). World Happiness Report 2025. University of Oxford: Wellbeing Research Centre. https://www.gallup.com/analytics/349487/world-happiness-report
CDC: Birthrate decline: The U.S. birth rate fell 2% in 2023 to about 3.6 million by the Centers for Disease Control and Prevention. The cesarean delivery rate increased 1% in 2023 to 32.3%. The preterm birth rate was 10.41%, essentially unchanged from 2022. Medicaid was the source of payment for 41.5% of births, a slight increase from 2022 (41.3%).
Centers for Disease Control and Prevention www.cdc.gov
Pew on teen experiences and expectations: Pew surveyed 1,391 teens ages 13 to 17 Sept. 18-Oct. 10, 2024. – focused on school experiences, friendships and future plans.
“American teens face a host of challenges these days – both inside and outside the classroom.. while there is some common ground, many of the problems and pressure points teens are dealing with differ significantly for boys and girls. In addition, many teens see imbalances in how boys and girls are experiencing school and how they’re performing academically.” Highlights per CNN’s AI summary:
- Teen boys and girls share concerns about school pressure and mental health but may need different kinds of support
- Both prioritize finding careers they hope to enjoy, making money and cultivating friendships in the future.
- Girls reported more pressure to fit in socially and look good, while boys felt they should be strong and good at sports.
- Most teens reported having a close friend, but the percentage for boys was lower compared with that of girls who have friends for emotional support.
- Teens perceive girls as experiencing more anxiety and depression, while boys are seen as struggling more with substance abuse and fighting
The Gender Gap in Teen Experiences Pew Research March 13, 2025 www.pewresearch.org
Pew: Public health technology quality: “Health departments across the country rely on manual processes, like phone calls and fax machines, to get access to crucial data:
- “Public health departments depend on accurate and timely data to guide their efforts to control the spread of disease.
- Full integration of information technology is the norm for other essential data systems, but a 50-state study by researchers at The Pew Charitable Trusts finds that this is not the case in public health departments.
- Policies and resources vary state to state and community to community. An inventory of existing data reporting practices and completeness is an important first step.”
Too Many Public Health Data Systems Are Stuck in the Past Governing March 14, 2025 https://www.governing.com/policy/too-many-public-health-data-systems-are-stuck-in-the-past
Policy & Regulators
“Operation Stork Speed” launched by RFKJ: HHS Secretary Robert F. Kennedy Jr. is launching Operation Stork Speed to evaluate nutrients and increasing testing for heavy metals and other foreign substances in infant formula. The agency will also collaborate with NIH to address research gaps about health outcomes associated with formula feeding.
Study: Medicaid work requirements: The RWJ-Urban Institute study found that requiring able bodied adults to work as a condition of Medicaid enrollment would reduce coverage for 4.6 to 5.2M in the 41 expansion states. The policy and coverage loss would shift $44.3 billion in costs to states, threaten the enrollment of nearly 11 million and cause hospital revenue to decline by nearly $32 billion. 9 states are considering Medicaid work requirements.
HHS: RFKJr. has tapped Calley Means, a chronic disease entrepreneur, as a part-time advisor to the White House. Changing the formulations of infant vis a vis HHS’ Operation Stork Speed is likely pursuant to removal of ingredients like seed oils and glyphosate.
FTC: Americans reported losing over $12.5 billion to various forms of fraud last year, per new FTC data — up 25% from 2023. Investment and impostor scams took the biggest financial tolls last year with consumers losing $5.7 billion and nearly $3 billion to each, respectively. Scams where perpetrators pretend to be government representatives are particularly hot right now, with reported losses increasing from $171 million in 2023 to $789 million in 2024.
AHRQ (Agency for Healthcare Research and Quality): Last Tuesday, DOGE announced plans to cut 80% to 90% of the AHRQ staff (300 employees).
Polling
New York Times on Trump approval rating: Of 15 “select polls” included in NYT’s analysis (Polling conducted between February 13 and March 12):
- President Trump approval rating went down in 13 of the 15
- The President’s net approval rating was negative in 12 of 15
- Net approval rating (average of the 15 polls): 46% approve vs. 54% disapprove
Latest Polls: Do Americans Approve of President Trump? NYTimes March 18, 2025 www.nytimes.com
