This week, Republicans in the House will pass “One Big Beautiful Bill” they can forward to the Senate ahead of their self-imposed Memorial Day deadline. Its fate in the GOP controlled Senate is likely to be less partisan with a similar outcome: in some form, it will pass setting the stage for Campaign 2026 partisan posturing and continued chaos for most industries especially healthcare.
Work requirements for Medicaid enrollees, reductions in subsidized insurance coverage for lower-income and disabled populations, NIH indirect cost cuts, site neutral payment implementation, minor cuts to 340B rebates, restrictions on Medicare Advantage risk coding and marketing, increased regulation of PBMs and TPAs, most favored nation drug pricing and additional cost-cutting items popular with conservative voters will be in the final bill. Regulatory reforms addressing pledges to improve Veteran’s Health and preventive health, shift industry focus to chronic care, re-visit “science” in government oversight of vaccines, drugs and the food supply, increased price transparency for drugs and hospitals will get attention where near-term federal cost-reduction can be demonstrated directly and clearly.
As summer nears, dust settles from the messy budget reconciliation process and DC insiders shift to Campaign 2026 mode, the healthcare industry will adjust, with winners and losers apparent:
Winners: Private equity and investor-owned hospitals, medical practices et al dodged direct hits to their ownership models and appear poised for moderate success (though volatility in the capital market will be problematic). Corporate insurers appear advantaged as smaller plans recover from utilization spikes. AI-based solution providers with demonstrable cost-reduction impact and cybersecurity advisors will experience continued momentum. Post-acute and long-term care providers will escape federal staffing requirement regulations (though states might step in and Medicaid cuts will intensify pain points). And M&A advisors will see sustained demand (horizontal and vertical).
Losers: States, public health programs and hospitals will inherit the negative impacts of Medicaid cuts, spikes in the uninsured population, higher unit costs for prescription drugs and technologies and increased public disaffection for the system. Large not-for-profit health systems will face increased scrutiny about consolidation, pricing, community benefits and tax exemptions. Advisory services organizations (consultants, law firms, accounting) and “middlemen” (TPAs, PBMs, GPOs) will face intensified competition and pricing pressure. Rating and accreditation agencies and NGOs will be forced to streamline measures and disclose business practices that complicate compliance. And early-stage start-ups lacking IRR momentum and connected investors will struggle.
Too Soon to Know: To date, the consumer health products industry has escaped hostile scrutiny but expected attention to ingredients and marketing practices bodes storm clouds for the industry. Physicians MIGHT emerge from the Big Beautiful Bill with relief from Medicare Reimbursement cuts. GLP-1 manufacturers (Novo Nordisk, Lilly) will face price pressure from managed Medicaid and Medicare Advantage sponsors but maintain market access advantages near term. Pursuers of expanded scope of practice for mid-level professionals (nurse practitioners, et al), expanded clinical privileges (pharmacists, alternative health providers) and wellbeing programs (including mental health) MIGHT see opportunity in states benefiting from federal-influence. Physician organizations s in new CMMI alternative payment models experienced in risk management and data management MIGHT see opportunity. And perhaps most consequential, Big Tech (Microsoft, Apple, et al) working with or against legacy HCIT players (Epic, Oracle et al) MIGHT produce the solution to interoperability sans unwelcome regulation and with the support of Trump Healthcare 2.0.
This week, spin machines representing healthcare’s expansive ecosystem will operate at warp speed for and against the Big Beautiful Bill. With respect to healthcare, rhetoric will pit deficit hawks declaring healthcare costs as the root cause of America’s debt against its defenders declaring healthcare a fundamental right and a necessary, responsible use of funds. Terms like fraud, waste and abuse, value-based care, safety and quality, price gauging, price transparency, personal responsibility, regulatory reform and others will pepper soundbites and contribute to the public’s confusion about how it uses its funds.
What’s clear is this: healthcare is suspected of widespread waste, poor performance and putting profits above patient care by lawmakers in DC, state capitals, non-healthcare business leaders and the majority of the public who think a shake-up is needed. Each organization in healthcare believes it operates for the greater good and delivers optimal value for funds received. The budgeting process prompts questions about who’s right.
Paul
Sections in this report
- Quotables: Budget Reconciliation
- Quotables: Industry
- Care Management
- Corporate Announcements
- Economy
- Hospitals
- Insurers
- Physicians
- Polling
- Prescription Drugs
- Public Health
- Regulators and Lawmakers
Quotables: Budget Reconciliation
Sen. Hawley on Medicaid: “Polls show Democrats down in the dumps, at their lowest approval level in decades, but we Republicans are having an identity crisis of our own, and you can see it in the tug of war over President Trump’s “one big, beautiful bill.” The nub of the conflict: Will Republicans be a majority party of working people or a permanent minority speaking only for the C-suite?
Mr. Trump has promised working-class tax cuts and protection for working-class social insurance, such as Medicaid. But now a noisy contingent of corporatist Republicans — call it the party’s Wall Street wing — is urging Congress to ignore all that and get back to the old-time religion: corporate giveaways, preferences for capital and deep cuts to social insurance.
This wing of the party wants Republicans to build our big, beautiful bill around slashing health insurance for the working poor. But that argument is both morally wrong and politically suicidal…
Republicans need to open their eyes: Our voters support social insurance programs. More than that, our voters depend on those programs. And there’s a reason for this that Republicans would do well to ponder. Our economy is increasingly unfriendly to working people and their families.
For the better part of 50 years, working wages have been flat in real terms. Working people cannot afford to marry when they want to, have the number of children they want to or raise those children as they want to. These days, they can barely afford to put a roof over their kids’ heads, to say nothing of health care…
If Republicans want to be a working-class party — if we want to be a majority party — we must ignore calls to cut Medicaid and start delivering on America’s promise for America’s working people.”
Opinion | Josh Hawley: Don’t Cut Medicaid – The New York Times May 12, 2025
Health Affairs’ Keith on Budget Reconciliation Legislation: “On May 11 and 12, 2025, the Energy and Commerce Committee and the Ways and Means Committee of the U.S. House of Representatives, respectively, released draft legislative text for Republican-led budget reconciliation legislation. Both committees marked up their respective legislation on May 13, with the goal of having the full reconciliation package passed by the House by Memorial Day. The Senate would then consider the package.
This bill, if enacted, would severely cut federal health care spending—including the most significant cut to the Medicaid program in its 60-year history—and highly restrict eligibility for marketplace coverage, jeopardizing the record-high marketplace enrollment of 24.3 million people for 2025. As just some examples, the bill would impose mandatory work requirements on many Medicaid applicants and enrollees, require certain Medicaid enrollees to pay copays, severely limit state flexibility, and defund Planned Parenthood, among many other changes. The two committees also want to codify—and, in some instances, go far beyond—much of Trump administration’s marketplace rule that would, if enacted, restrict marketplace eligibility, enrollment, and affordability.
As a result, millions more Americans would be left uninsured, leading to higher medical debt for families, more uncompensated care for health care providers, and strains on state budgets…
According to Congressional Budget Office’s (CBO’s) preliminary estimates of the Energy and Commerce Committee’s draft, at least 7.7 million people would lose Medicaid or marketplace coverage as a result of new policies in the legislation. An additional 1.8 million people would lose coverage as a result of provisions in the legislation codifying parts of the proposed marketplace rule mentioned above. (Under CBO conventions, half that total was incorporated into baseline projections when the rule was proposed, so only the other half, 0.9 million additional uninsured people, count towards CBO’s scoring of the legislation.)
On top of this, 4.2 million people would be uninsured if Congress fails to extend enhanced premium tax credits for marketplace coverage…which rises to about 5 million people by 2034 after adding in the other half of the impact of the Trump administration’s marketplace rule. CBO confirms that, overall, at least 13.7 million more people would be uninsured in 2034 as a result of these policies…
The Energy and Commerce proposal includes at least $912 billion in federal spending cuts over the next decade, the majority of which (at least $715 billion) stem from cuts to Medicaid and the Affordable Care Act under Subtitle D. Similar to the coverage losses, these estimates are only expected to increase as the CBO continues its analysis…
The Ways and Means proposal is much broader than health coverage”
Arnold Ventures’ Miller on healthcare budget cuts: “Right now, the U.S. House of Representatives is set to begin marking up legislation aimed at cutting billions of dollars from the federal budget. This process offers a critical opportunity to achieve meaningful savings without reducing essential benefits or harming vulnerable populations.
To do this, Congress needs to look no further than unnecessary spending within the health care system. We at Arnold Ventures have outlined a number policy solutions Congress can look to for massive savings— totaling more than $1 trillion over 10 years.
We encourage legislators to focus on confronting entrenched special interests like hospitals, insurers, and pharmaceutical companies, who have for too long been lining their pockets at the expense of patients, taxpayers, and employers.
When advancing policies through reconciliation, Congress should prioritize proven, bipartisan reforms including reducing overpayments to private insurers in Medicare Advantage and enacting site-neutral payment reforms. Site-neutral reforms alone could save more than $150 billion over 10 years, while lowering Medicare beneficiary premiums and cost-sharing by more than $90 billion. Modifying risk adjustment payments to Medicare Advantage insurers would save up to $1 trillion over 10 years and reduce Medicare premiums…
“There is more than enough unnecessary, wasteful, and fraudulent spending across our health care system for Congress to make meaningful spending cuts without impacting coverage. We encourage policymakers to take notice of and take action on these opportunities.”
Arnold Ventures: Congress Should Enact Health… | Arnold Ventures
AEI: National debt:” By 2035, the Congressional Budget Office (CBO) projects that federal debt will reach 118% of US GDP. AEI’s Yuval Levin writes that to change course and correct the skyrocketing deficit, Republicans must look to cuts in entitlement spending rather than discretionary spending.
If current tax rates are maintained, CBO data indicate that federal debt will expand to well over 200 percent of the US economy over the next three decades. Aside from the current moment, the last time the US debt equaled the size of the economy occurred during World War II.
The Root of the Problem: Entitlement spending accounts for a much larger percentage of the federal budget than domestic discretionary spending—50% and 14 % respectively. According to CBO, this trend is expected to continue well into 2035.”
The Republicans’ Debt Delusion | American Enterprise Institute – AEI
Wright on Household Economics: “Wikipedia reports the average Model T Ford cost $490 in 1914. If your autoworker had no other expenses in 1914, they could have bought 2.65 cars with the wages they made in a year. Today, you cannot even buy one. How was this colossal rug-pull on the American consumer achieved? We were convinced that debt did not matter and that the only thing that did was whether we could make the payment. In America our reputation is now built on what we say we are going to do (make debt payments), not what we actually produce.”
Melody Wright from M3_Melody Substack <m3melody@substack.com
“Many Gen Zers are eyeing the ever-rising cost of college tuition, along with roiling uncertainty in many white-collar career fields, and are choosing an alternate path.
Americans are losing faith in the ROI of a college degree. In a 2023 Gallup poll, only 36% of respondents had a “great deal” or “quite a lot” of confidence in the higher education system, dropping from 57% in 2015. A Pew Research study in 2024 found that just 22% of US adults thought that college was worth it if a student had to take out loans to attend. Zoomers are also most likely to feel that getting a degree is a waste of time and money, a 2025 survey from Indeed found. Per Experian, the average Gen Zer has about $23,000 in student debt. That load is starting to feel heavier now that the perks Gen Zers most want — including work-life balance, financial stability, and a path to becoming their own boss — are disappearing from white-collar jobs. Managers are calling workers back to the office and dismantling the career ladder by assigning entry-level tasks to generative AI bots and agents.”
Inside Gen Z’s Pivot from College Degrees to Blue-Collar Jobs – Business Insider
Quotables: Health Industry
Center on Health Insurance Reforms at Georgetown University: TPAs need regulatory attention: Pharmacy benefit managers (PBMs) have received significant attention from the White House, members of Congress, federal regulators, and state lawmakers, as well as the media, for exploitative, cost increasing practices. Yet, most employer health care dollars are spent on medical care where another type of corporate middlemen—third-party administrators owned by large insurance companies (TPAs)—operates. In contrast to PBMs, corporate TPA practices remain under scrutinized relative to their importance in the health care system.
While TPAs claim to lower medical costs––similar to PBMs’ assertions that they reduce drug costs––allegations made in litigation suggest this is not often the case. Other lawsuits and investigations raise concerns that TPAs are imposing hidden fees, benefiting from their own form of spread pricing, and otherwise prioritizing their own financial interests over their health plan clients when negotiating contracts and administering claims. Despite provisions in the Consolidated Appropriations Act of 2021 intending to allow employer plans to “look under the hood” at their health care claims data and compensation TPAs and other service providers receive, TPAs continue to obstruct employer efforts to monitor health plan spending and quality of care.
As Americans across the country demand health care price relief, TPAs warrant the same level of attention policy makers have been giving PBMs. Based on the growing anecdotal evidence of abuses and increasing profits for the TPA business lines of the nation’s largest insurers, examining these TPAs’ practices could enable policy makers to pursue reforms that help lower out-of-pocket costs, slow premium growth, and increase wages for workers..”
Third-Party Administrators – The Middlemen of Self-Funded Health Insurance | Health Affairs
Whistleblower Shultz on Theranos 2.0: “I always knew Elizabeth Holmes would have a second act. But I’m shocked it’s starting while she’s still behind bars.
Elizabeth is now serving an 11-year sentence for defrauding investors in Theranos and has been banned from participating in federal health programs. The company was built on her claim that, at 19 years old, she had invented a device capable of running hundreds of tests from just a single drop of blood. It was a bold vision that captivated the world, and a story everyone wanted to believe — including me.
Now her partner, Billy Evans, has founded a company called Haemanthus, which also touts a diagnostic blood-testing device that uses only small amounts of blood. While Elizabeth has no legal affiliation with the company, her fingerprints and pricks are all over it. Even the naming convention feels familiar: Instead of combining the Greek roots of therapeía and diagnosis like she did with Theranos, this time it’s haema and anthos — Greek for “blood” and “flower…
Failed founders deserve second chances. But at Theranos, Elizabeth had a thousand chances — opportunities to listen to her scientists, to tell the truth to her board and investors, to change course and right the ship. At each opportunity she consistently showed poor judgement and a lack of character. Even when the Wall Street Journal began reporting on the company, she still had hundreds of millions in the bank, world-class scientists on payroll, and the most prestigious board in Silicon Valley. In that moment, she had more resources, talent, and opportunity than most founders will ever see — and she blew it.
She’s not Edison. This isn’t going to work on the thousand-and-first try.”
Tyler Shultz is a scientist, founder, and whistleblower best known for exposing fraud at Theranos and advocating for ethics in innovation.
Theranos whistleblower Tyler Shultz on Elizabeth Holmes’ second act | STAT
Physician finances: “We are now in an economic environment that favors large hospital systems and financially punishes independent practices with high regulatory burdens. Adjusted for inflation, Medicare reimbursement for physicians has declined by nearly 50% since 2000. In contrast, the costs of running a medical practice have steadily increased. Rent, utilities, staff wages and medical equipment have all gone up, while reimbursement has not kept up with inflation and is thus decreased.
Physicians are the only category of government contractors who are routinely asked to take a pay cut. Meanwhile, hospital systems and managed care organizations have seen payment increases that track with or exceed inflation. Despite this, our patients often overestimate how much we are compensated. On average, patients guess that Medicare reimburses us nearly six times more than it actually does. “
Does the physician payment system favor large hospital systems? – Becker’s ASC
Care Management
NYT: Biden diagnosed with Stage 4 Prostate Cancer: “Former President Joseph R. Biden Jr. was diagnosed Friday with an aggressive form of prostate cancer that has spread to his bones, his office said in a statement on Sunday. The diagnosis came after Mr. Biden reported urinary symptoms, which led doctors to find a “small nodule” on his prostate. Mr. Biden’s cancer is “characterized by a Gleason score of 9 (Grade Group 5) with metastasis to the bone,” the statement said.
“While this represents a more aggressive form of the disease, the cancer appears to be hormone-sensitive which allows for effective management,” according to the statement from Mr. Biden’s office, which was unsigned. “The president and his family are reviewing treatment options with his physicians.”
Mr. Biden, 82, left office in January as the oldest-serving president in American history…”
Biden Is Diagnosed with an Aggressive Form of Prostate Cancer – The New York Times
FDA approves coronavirus vaccine: “The FDA has finally approved Novavax’s Covid-19 vaccine, but with restrictions that its two competitors in the U.S. market do not face. The long-awaited license limits use of the vaccine to people 65 and older and people aged 12 to 64 who have at least one medical condition putting them at higher risk of severe illness from Covid.”
CHOP Researchers utilize CRISPR treatment: “Base editors can correct disease-causing genetic variants. After a neonate had received a diagnosis of severe carbamoyl-phosphate synthetase 1 deficiency, a disease with an estimated 50% mortality in early infancy, we immediately began to develop a customized lipid nanoparticle–delivered base-editing therapy. After regulatory approval had been obtained for the therapy, the patient received two infusions at approximately 7 and 8 months of age. In the 7 weeks after the initial infusion, the patient was able to receive an increased amount of dietary protein and a reduced dose of a nitrogen-scavenger medication to half the starting dose, without unacceptable adverse events and despite viral illnesses. No serious adverse events occurred. Longer follow-up is warranted to assess safety and efficacy. (Funded by the National Institutes of Health and others.”
Per STAT, “For the first time, scientists say they have reached into the genome of a severely ill child and rewritten the unique misspelling in his DNA.
The results, published in the New England Journal of Medicine on Thursday, are a landmark in the 50-year quest to read and repair the code of life…”
FDA approves Alzheimer’s blood test: The Food and Drug Administration today announced it cleared the first blood test to diagnose Alzheimer’s disease. The test, created by Fujirebio Diagnostics, only requires a blood draw, making it less invasive and easier for patients to access, the agency said. The test measures two proteins in the blood, pTau217 and β-amyloid 1-42, and calculates the numerical ratio between them. The ratio is correlated to the presence or absence of amyloid plaques in the patient’s brain — an indicator of Alzheimer’s. The blood test reduces the need for a positron emission tomography scan
FDA Clears First Blood Test Used in Diagnosing Alzheimer’s Disease | FDA
Corporate Healthcare Headlines
Cleveland Clinic, Oracle and G42, have partnered to develop an artificial intelligence-based healthcare delivery platform.
Optum, the health data and care provider division of UnitedHealth Group, is developing a way to calculate how sick Medicare patients are through AI, instead of relying solely on diagnosis codes submitted by physicians.
Common Spirit 1Q 2025 finances: Common Spirit recorded a $42 million net loss in its third quarter, compared with $282 million in net income a year ago. Acute admissions at the nonprofit health system grew 4.6% from a year ago, and outpatient visits increased 6.3%. Average length of stay declined slightly to 4.83 days from 4.91 days, according to the report. Operating losses in the quarter came to $241 million with a 3% increase in operating expenses. Losses totaled $438 million in the nine-month period ended March 31 with a 4.6% increase in expenses, according to the third-quarter earnings report.
Common Spirit Health reports Q3 losses despite patient volumes | Modern Healthcare
Novo Nordisk: “Ozempic maker Novo Nordisk NOVO.B -1.81%decrease; red down pointing triangle pushed out its chief executive after losing ground in the anti-obesity drug market, which has caused a steep stock-price decline and impatience at the nonprofit foundation that controls the company. Lars Fruergaard Jorgensen, who has headed the Danish pharmaceutical company for eight years…”.
Novo Nordisk CEO Lars Fruergaard Jorgensen to Steps Down – WSJ
UnitedHealth Group: The Justice Department is investigating the healthcare conglomerate—and parent of insurance giant UnitedHealthcare—for possible criminal Medicare fraud..”
UnitedHealth Group to cut Medicare drug plan commissions | Modern Healthcare
J&J: A California federal jury found Friday that Johnson & Johnson’s medical technology unit Biosense Webster violated federal and state antitrust laws by withholding clinical support to hospitals using third-party reprocessed catheters.
J&J: Unit Hit With $147M Verdict in Catheter Antitrust Suit
Prospect: PA AG files suit against Prospect after hospital closing.
Deloitte Consulting: Propublica report slams Deloitte consulting role in disappointing Georgia Pathways program results.
Inside Deloitte’s Multi-Million Promotion of Georgia’s Medicaid Experiment — ProPublica
Amgen loses Regeneron court challenge: A federal jury in Delaware said on Thursday that biotech company Amgen owes competitor Regeneron more than $406 million for engaging in anticompetitive behavior to increase sales of its cholesterol-reduction drug Repatha at the expense of Regeneron’s rival drug Praluent.
Amgen owes $406 million for monopolizing cholesterol drug market, US jury says
Economy
Rating agencies lower U.S. credit rating: “… all three major credit rating firms no longer give the United States their best rating. The credit rating of the United States received a potentially costly downgrade on Friday, as the ratings firm Moody’s determined that the government’s rising debt levels stood to grow further if Republicans enact a package of new tax cuts.
The downgrade, to one notch below the highest triple-A rating, amounted to a repudiation of Washington, where President Trump only hours earlier had pushed his party to adopt a legislative package that might add trillions of dollars to the nation’s fiscal imbalance.
The downgrade from Moody’s means that each of the three major credit rating agencies no longer gives the United States its best rating. Fitch downgraded the United States in 2023, citing fiscal concerns, and Standard & Poor’s downgraded the country in 2011.
Related: Fitch: US Effective Tariff Rate Declines to 13% from 23% with Lower China Duty: Fitch Ratings updated its China-US tariff projection based on last week’s Joint Statement on U.S.-China Economic and Trade Meeting in Geneva, May 12, 2025, that reduces reciprocal tariffs. Fitch estimates that the U.S. effective tariff rate (ETR) is now 13.1%, a notable decline from 22.8% prior to the statement.”
Moody’s Downgrades U.S. Credit Rating Below Triple-A – The New York Times
U.S. Loses Last Triple-A Credit Rating – WSJ
US Effective Tariff Rate Declines to 13% from 23% with Lower China Duty
BLS April 2025 CPI Report:” Inflation cooled more than expected in April, with consumer prices rising 2.3% year-over-year in April–down from a 2.4% annual rate in March and the lowest annual inflation rate since early 2021.
The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.2% on a seasonally adjusted basis in April, after falling 0.1%in March… Over the last 12 months, the all-items index increased 2.3 % before seasonal adjustment. The index for shelter rose 0.3% in April, accounting for more than half of the all-items monthly increase.
The medical care index increased 0.5% over the month. The index for hospital services increased 0.6 % in April and the index for physicians’ services rose 0.3% over the month. The prescription drugs index rose 0.4% in April.”
Consumer Price Index – April 2025
Model: impact of GOP budget package: “The latest assessment arrived Friday from the Penn Wharton Budget Model, a nonpartisan scorekeeper closely watched on Capitol Hill. Economists found that many Americans who make less than $51,000 a year would see their after-tax income fall as a result of the Republican proposal beginning in 2026…
People making between about $51,000 and $17,000 could lose about $700 on average in after-tax income beginning in 2026… when factoring in both wages and federal aid. That reduction would worsen over the next eight years. People reporting less than $17,000 in income would see a reduction closer to $1,000, on average, also increasing over time, a shortfall that underscores their reliance on federal benefits.
By contrast, the top 0.1%, including those with incomes over $4.3 million, would gain on average more than $389,000 in after-tax income in 2026… These earners benefit more from a Republican measure because it cuts taxes on the wealthy and makes other favorable changes, including for businesses, which may improve the value of their investments.
Republican Tax Bill May Hurt the Lowest Earners and Help the Richest – The New York Times
Report: Impact of state health spending caps in 2022: “As of mid-2024, eight states have committed to a process to slow spending growth by establishing statewide targets for health care spending growth. This spring, five of them—Connecticut, Delaware, Massachusetts, Oregon, and Rhode Island—publicly shared their 2022 performance against their statewide spending targets. Highlights:
“…these states set their spending targets between 3.0% and 3.4%. As in 2021, Rhode Island was the only state to meet its spending growth target of 3.2%; it had the lowest rate of spending growth at 1.6 %. Oregon’s 2022 spending grew 3.6%, only slightly exceeding its 3.4% target. Connecticut also slightly exceeded its 3.2% target with spending growth at 3.4%. Meanwhile, Delaware and Massachusetts significantly exceeded their targets with 2022 spending growth of 6.3% and 5.8%, respectively.” Excerpts:
- Prescription Drugs Continue to Drive Spending Growth: In 2022, retail prescription drugs was the fastest-growing spending category in Connecticut, Delaware, and Massachusetts, and the second fastest in Oregon and Rhode Island (behind Hospital Outpatient and Professional Other [for example, behavioral health] services, respectively) …
- Spending On Hospital Inpatient Services Decreased or Stayed Flat but Increased for Outpatient Services: Compared to both overall spending and prescription drug spending, hospital inpatient spending showed opposite trends in 2022, dropping in four states and remaining flat in one.
“As states across the nation move forward with efforts to improve affordability by reining in health care spending growth, they face stiff resistance from the pharmaceutical and hospital industries…Yet, the results from the most recent cost growth target data collection underscore the need for states to continue to move this work forward… “
Carta: Venture capital update Q1, 2025:
- 46% of all seed deals were bridge rounds in Q1 2024, which is the highest bridge rate for any stage since Carta has been tracking such data. The rate was 39% for full-year 2024 and just 31% in 2022.
- Series A deal count fell 79% between Q1 2022 and Q1 2025
- Median founder dilution fell from seed-stage through Series D, while the median time between Series A and Series B rounds hit an all-time high of 2.8 years.
Axios Pro Rata May 13, 2025
State of Private Markets: Q1 2025
Revenue cycle cliff?: “Data from 2024 indicates that despite health systems making serious efforts to ramp up collections through a variety of means, including use of a wide range of more consumer-friendly digital platforms, collection rates remain at a mere 19% of total patient obligations, just over half of the recommended industry benchmark. Unfortunately, the headwinds on patient collections don’t stop there, as the commercially insured population owed slightly more and had a lower overall collection rate compared to 2023. And while it’s less likely the market sees an uptick in HDHPs akin to the surges of circa 2010-2015, providers must continue to be vigilant operationally to minimize unpaid patient obligations leading to bad debt.
With those caveats in mind, it’s nonetheless clear that cost-to-collect has risen steadily for the last decade, at rates outpacing inflation, climbing from an average sub-3% of net patient revenue (NPR) in the mid-2010s, to 3.74% in 2022 (equivalent to $13.1M for a hospital with $350M in revenue) as providers continue to invest in labor and technology to support efforts to retrieve payment for services. And while a 2022 analysis from AKASA provides a faint silver-lining, showing that hospitals with well-automated RCM have a slightly lower cost profile (~3.5%) the fact is that cost continues to climb, while performance in other key measures, such as denials and patient collections, plateaus or regresses relative to historical. “
An emerging strategic imperative? 3 revenue cycle metrics we’re keeping an eye on
Hospitals
Study: state hospital price controls: “Beginning in 2010, Rhode Island’s affordability standards capped hospital price growth for the fully insured commercial segment of the state’s health insurance market… We used a series of national data sources from the period 2006–22 to compare hospital prices and margins and insurer premiums and fees in Rhode Island and comparison states before and after the initiation of the standards in 2010. Our study found that the standards were associated with large relative reductions in hospital prices, averaging 9% over the course of the study period. Reductions were similar for both the fully insured and the self-insured segments. Hospital price reductions translated into substantial reductions in fully insured premiums relative to comparison states, reaching $1,000 per member by 2022. Yet the standards had a modest impact on overall commercial premiums in Rhode Island, likely because of premium increases in the self-insured segment that were not subject to the standards. Further, the standards reduced commercial revenue for Rhode Island hospitals by nearly $160 million annually, which exceeded premium reductions. Together, the affordability standards have benefited employers and members with fully insured plans at the expense of hospitals.”
Insurers
WSJ on United losses, CEO turnover: “After being hit by higher-than-expected costs, both Humana and CVS took steps to shrink their Medicare Advantage enrollment for 2025. UnitedHealthcare, by contrast, expanded aggressively—with the biggest absolute gain in covered individuals in the industry. Now, the costs tied to that growth are starting to show up in ways that are unique to UnitedHealth’s insurance arm.
Beyond its aggressive growth, UnitedHealth is also feeling the impact of a phased-in crackdown on how insurers code patient conditions. In Medicare Advantage, insurers receive lump-sum payments from the government to manage care, with higher payments for sicker patients—creating strong incentives to document more diagnoses. A Wall Street Journal investigation last year found that UnitedHealth collected billions in extra payments tied to questionable diagnoses.
The Biden administration rolled out a new coding system, known as V28, that removes or down-weights certain conditions…
UnitedHealth has also been the most aggressive in expanding vertically through Optum. In recent decades, UnitedHealth pivoted to becoming a major healthcare provider, a move that fueled faster growth than its peers. But with medical costs surging, that strategy is cutting the other way. On Tuesday’s analyst call, UnitedHealth acknowledged that Optum’s medical-services division is also feeling the squeeze, as many new patients are arriving with complex conditions and requiring more intensive care.
Medical cost pressure is real across the board, and could still prove to be an accelerating issue for insurers generally. But the panic selling sparked by UnitedHealth in its rivals may have gone too far.”
Why UnitedHealth’s Blowup May Be More Isolated Than Investors Think WSJ May 14, 2025
DOJ suit challenges steerage in MA plans: “The Justice Department accused three of the nation’s largest health insurers of paying hundreds of millions of dollars in kickbacks to brokers in exchange for steering patients into the insurers’ Medicare Advantage plans.
In a complaint filed in Boston federal court (May 12), the DOJ alleged that CVS Health’s Aetna, Elevance Health and Humana engaged in a vast kickback scheme with insurance brokers eHealth, GoHealth and Select Quote from 2016 to 2021 The lawsuit alleges the companies violated the False Claims Act, which prohibits submitting a false claim to the government for payment. The Justice Department is seeking unspecified damages and penalties.”
Aetna, Humana sued by feds over alleged Medicare kickback scheme
Trump DOJ Sues Insurance Giants Over Alleged Medicare ‘Kickbacks’ Scheme – Newsweek
Physicians
Study: Primary care in rural and underserved areas: “This study measured trends in the number of medical residency training sites in rural and federally qualified health center (FQHC) settings, using data from the Accreditation Council for Graduate Medical Education. Results:
- The number of residency programs with training in rural sites increased from 120 (6.18% of all programs) in 2008–09 to 412 (14.34%) in 2023–24, whereas residencies at FQHC sites grew from 69 (3.55%) to 321 (11.17%).
- A large proportion of this expansion has been funded through federal investments: 21.6% of rural residencies are Rural Residency Planning and Development programs, and 28% of all current FQHC-based residencies are Teaching Health Center programs.”
Physician Training in Rural and Health Center Settings More Than Doubled, 2008–24 | Health Affairs
PAI: Physicians in Rural Areas by Practice Ownership Type, 2019-2024
| Year | Independent | Health System | Other Corporate |
| 2019 | 42% | 48% | 11% |
| 2020 | 40% | 49% | 11% |
| 2021 | 33% | 52% | 15% |
| 2022 | 30% | 54% | 16% |
| 2023 | 28% | 55% | 17% |
| 2024 | 25% | 58% | 18% |
Physicians Advocacy Institute, April 2025
Report: Primary care training and practice decisions: “Shortages of primary care physicians threaten access, quality, and equity in US health care. Policy solutions face disinformation about the complex patterns of physician training. This retrospective cohort study used American Medical Association Physician Masterfile and Historical Residency File data to identify physicians’ trajectories from medical school graduation through postgraduate training into primary care specialties for doctors of medicine, doctors of osteopathic medicine, and international medical graduates. Highlights:
- Among 353,590 physicians who graduated during the period 2001–15, 11.8% pursued initial training in family medicine, 33.5% training in internal medicine, and 10.5% training in pediatrics.
- Primary care yield, defined as the percentage of physicians who complete their initial postgraduate training in a primary care specialty and conclude their training in any primary care specialty, was 97.0% for family medicine, 35.5% for internal medicine, and 54.4% for pediatrics. After internal medicine and pediatrics residencies, large percentages of physicians left primary care to train in subspecialties and other fields. Further research must document how many physicians enter careers in primary care practice.”
Report: physician compensation and happiness: “Physician compensation is shaped by a complex mix of factors – reimbursement rates, patient volume, hours worked, call schedules, payer mix and more. That’s why doctor salaries alone do not determine how satisfied they are with their pay. On Marit, the average satisfaction with compensation is 3.57 out of 5, which is slightly above neutral. But how that satisfaction breaks down varies widely across the profession. Findings:
- More pay doesn’t always mean more satisfaction. Specialties like Orthopedics, Cardiology, and Anesthesiologyearn top salaries but report lower-than-average satisfaction.
- Lower-paid physicians can still feel well-compensated. PM&R, Psychiatry, and Nephrologyscore above average on satisfaction, despite modest pay.
- Geography matters. Physicians in states like Kentucky, Iowa, and Nevadareport the highest satisfaction with compensation – while physician salaries in New York, Pennsylvania, West Virginia, Michigan rank the lowest.
- Rural beats big cities.Rural physicians report the highest satisfaction with their pay. Mega-city doctors? The lowest.
- Practice setting is key. Self-employed physicians are the most satisfied. Academic and hospital-employed doctors lag behind.”
Does Higher Physician Compensation Really Lead to Greater Satisfaction? | Blog
Polling
Gallup: Housing, healthcare face declining satisfaction: “The crisis in satisfaction with housing affordability across economies is unique in this regard, as other aspects of local services do not follow the same trend. When it comes to satisfaction with local healthcare, schools, public transport, and roads, people in the OECD remain more satisfied than the rest of the world.
Housing is the only one of these five services for which median satisfaction has fallen by more than 10 percentage points since 2010 (healthcare declined by eight points, while others are broadly stable), and is the only service not to receive a median satisfaction rating above 50% in 2024.”
Housing Affordability Crisis Hits Wealthy Economies
Trust in AI: Phillips surveyed 200 healthcare professionals and 1007 patients from December 2024 to April 2025. Highlights:
“63% of healthcare professionals are optimistic that AI could improve patient outcomes 48% of patients are optimistic that AI can improve healthcare. Patients aged under 45 are twice as likely to be optimistic (66%) than those aged 45 and over (33%).
Reassurance that a healthcare professional has oversight (44%) and that the technology has been tested to ensure safety and effectiveness (35%) are key to building patient trust in AI. However, what makes patients feel reassured about the use of AI in healthcare varies generationally: healthcare professional oversight is more important to patients who are 45 and over (53%) than to those aged under 45 (33%).”
philips-future-health-index-2025-report-building-trust-in-healthcare-ai-us.pdf
Prescription Drugs
Most favored nation pricing gets pushback from drug companies: “Calley Means, a special White House employee and top advisor to HHS Secretary Robert F. Kennedy Jr., effectively dared Roche to pull its US investment after the company said it would consider doing so in response to President Donald Trump’s “most favored nations” plan.
Earlier this week, Roche said that its promise for a $50 billion manufacturing investment could be “reassessed” in the wake of possible changes to the “current policy environment,” alluding to Trump’s most favored nations executive order without mentioning it by name.
Other biopharma companies and executives have carefully criticized the administration’s tariff plans, including the CEOs of Eli Lilly and Johnson & Johnson. PhRMA president Stephen Ubl also said on Sunday the most favored nations plan “jeopardizes the hundreds of billions our member companies are planning to invest in America.”
Top RFK Jr. advisor dares drugmakers over threats to drop manufacturing promises
Public Health
CDC: Overdoes deaths down: Drug overdose deaths last year dropped to their lowest annual level since 2019, according to preliminary CDC data. There were an estimated 80,391 drug overdose deaths in the U.S. last year — a drop of 26.9% from the 110,037 deaths estimated in 2023.Fatal overdoses initially rose during the COVID pandemic, but have been falling since 2023. The drop in overdose deaths is partly due to the wider availability of naloxone, which reverses an opioid overdose.
- Overdose deaths involving opioids declined from an estimated 83,140 in 2023 to 54,743 in 2024, per provisional CDC statistics.
- Overdose deaths involving cocaine and psychostimulants (like methamphetamine) decreased too.
- Almost all states saw decreases in overdose fatalities. Louisiana, Michigan, New Hampshire, Ohio, Virginia, West Virginia and Wisconsin and Washington, D.C., experiencing declines of 35% or more, according to the data. However, South Dakota and Nevada recorded slight rises compared with the same period in 2023, the CDC notes.
CDC.gov
2024 Census: Population shift to cities: Highlights of Census update released May 15:
“Cities of all sizes grew on average from 2023 to 2024 with Southern and Western cities experiencing accelerated growth. Gains during this time and some cities in the Northeast and Midwest marked their first population increase in recent years.”
- In 2024, the Northeast experienced population growth after years of steady decline…
- The Midwest showed modest population growth, with average rates varying by population size. Places with fewer than 5,000 residents saw an average growth of 0.1%.
- The South experienced the highest average population growth of any region…
- The West also showed population growth…
“Across the nation, cities with populations fewer than 5,000 grew by 0.3% on average, compared with average growth rates of 1.0% for those with populations of 5,000 to 9,999; 1.1% for those with populations of 10,000 to 49,999; and 1.0% for those with populations of 50,000 or more…
The nation’s housing stock grew by about 1.4 million units between 2023 and 2024, reaching a total of 146.8 million. The 1.0% increase was slightly lower than the 1.1% increase between 2022 and 2023.”
Population Growth Reported Across Cities and Towns in All U.S. Regions
Florida becomes 2nd state to ban fluoride in public water supply: “Florida on Thursday officially became the second state in the country to ban fluoride from public drinking water, marking a significant win for Medical Freedom groups aligned with Health and Human Services Secretary Robert F. Kennedy Jr. Florida follows Utah, which became the first state to ban fluoride in drinking water in March…
Florida becomes 2nd state to ban fluoride in public water supply – POLITICO May 15, 2025
Study: Cannabis use: “In this cross-sectional study of 4503 respondents aged 65 to 84 years from the Veterans Health Administration (2020-2023), 10% reported past 30-day cannabis use, 36% of whom had CUD. Odds for CUD were higher among younger respondents, those reporting anxiety, those with 1 or more deficits in activities of daily living, those with past month illicit drug use, and those with frequent, inhaled, or recreational cannabis use.”
Cannabis Use Among Older Adults | Geriatrics | JAMA Network Open | JAMA Network
Weed-killer ingredients targeted by HHS: “After targeting dyes and other chemicals allowed for use in food, HHS Secretary Robert F. Kennedy Jr. is zeroing in on the active ingredient in Roundup in his bid to root out what he calls environmental toxins that contribute to chronic disease.
Why it matters: The herbicide glyphosate is expected to feature prominently in a report due out this week from President Trump’s Make America Healthy Again Commission, which was charged with identifying top contributors to America’s chronic health problems. But some warn that clamping down on pesticides could cause major disruption of the food supply and hurt agriculture interests and consumers…
The big picture: While some environmentalists and wellness influencers have long decried the use of herbicides and pesticides, glyphosate is the most widely used weedkiller worldwide and the key ingredient in Bayer’s Roundup.”
Stat News: Energy drink health risks get attention, marketing get attention: “…Many of the newer breeds tout “better for you ingredients” and benefits, from biotin (“oh, that hair skin + nails,” promises the copy on Gorgie) to lion’s mane mushrooms (“boosts memory, focus, and mental clarity,” declares the vaguely intellectual Odyssey). One hedge fund recently said it was betting against the $55 billion Monster empire, predicting it would be edged out by brands that appear more health-conscious. The problem, health experts say, is the new wellness-themed marketing may be worsening consumer confusion over the risks of energy drinks…
The American Academy of Pediatrics recommends that children under age 12 avoid caffeine entirely, and that adolescents between 12-18 have no more than 100 mg per day. But an estimated 30%-50% of adolescents in the U.S. still consume energy drinks, many of which contain between 160-300 mg of caffeine per can…
The health risks of energy drinks were a hot topic in the U.S. about a decade ago. Since then, the market has only grown. As of 2025, there were 254 energy drink businesses in the U.S., compared to just 49 in 2015… Not only is there no minimum age for purchases of energy drinks in the U.S., some are regulated by the FDA as dietary supplements rather than as soft drinks — meaning they can bypass the FDA’s limit of 71 mg of caffeine per 12 ounces of carbonated soda. “
Energy drinks rebrand as wellness, add women to bro-heavy market
Regulators/Legislation (Proposed rules, new legislation from last week):
CMS: Provider tax changes: The Centers for Medicare & Medicaid Services yesterday issued a proposed regulation on provider taxes used by states to inflate federal contributions in the FMAP formula. The CMS’ proposed rule would:
- Ban states from taxing Medicaid business at higher rates than non-Medicaid business;
- Prevent the use of ambiguous language to obscure Medicaid-specific taxes;
- Continue statistical testing while introducing additional safeguards to deter system manipulation; and
- Implement a phased transition timeline based on the duration of existing waivers.
Maximum fair prices for Part D drugs: On May 12, the Centers for Medicare & Medicaid Services (CMS) published the draft guidance for the Medicare Drug Price Negotiation Program’s (DPNP’s) third cycle (2028). The draft guidance, open for a 45-day public comment period, also includes information regarding the effectuation of any negotiated Maximum Fair Prices (MFPs) for the first three cycles. The guidance includes policies incorporating drugs payable under Medicare Part B into the program for the first time and is soliciting comments on how to facilitate access to any negotiated maximum fair price for Part B drugs.
HHS on Mental Health Parity enforcement: The Departments of Labor, Health and Human Services, and the Treasury today announced that they will not enforce the 2024 mental health parity final rule, a regulation intended to ensure compliance by insurers with the Mental Health and Addiction Equity Act.. The agencies will also not pursue enforcement actions due to an approaching deadline for a court challenge by the ERISA Industry Committee in the U.S. District Court for the District of Columbia.
FDA: Vaccine approval process change “Vinay Prasad may have just started as the new director of the FDA’s biologics center, but he’s “planning to unleash a massive framework” on vaccines in the “coming days,” FDA Commissioner Marty Makary said Thursday. While Makary did not elaborate on what this new framework will entail, he said it will help ensure that industry understands “exactly what we’re thinking.” Makary spoke at the Food and Drug Law Institute’s annual conference in Washington…
The remarks reflect the latest in a series of changes the administration is considering on the vaccine front. HHS Secretary Robert F. Kennedy Jr. recently said that all new vaccines would now require placebo-controlled testing, even though experts have noted that many vaccines already undergo placebo-controlled or active-controlled testing. Kennedy previously said he will review the childhood vaccine schedule. And Novavax has faced political headwinds from FDA in recent days, as its Covid vaccine has seen delays in converting from an EUA to a full approval.”
New CBER chief is readying ‘massive framework’ for vaccines, Makary says
