The Trump administration is moving into its second 100 days facing conditions more problematic than its first 100. For healthcare, this period will define the industry’s near-term future as changes in three domains unfold:
- The Economy: The economy is volatile and consumer confidence is waning. The impact of tariffs on U.S. prices remains an unknown and escalating tension between the Ukraine and Russia, Israel and Palestine, Pakistan and India are worrisome. Household debt is mounting as student loans, medical debt and housing costs imperil financial security for more than half of U.S. households. The 3 major stock indices remain in the red YTD, prospects for a recession are high and investors are increasingly cautious. Net impact on healthcare organizations and public programs: negative, especially those without strong balance sheets and access to affordable private capital.
- The Courts: Recent opinions by the Supreme Court and District Courts suggest a willingness to challenge the administration’s Executive Orders on immigrant deportation and due process, threats and funding cuts aimed at law firms and universities considered “woke” and layoffs initiated by DOGE and more. Court challenges will slow the administration’s agenda and create uncertainty in workplaces. Net impact: negative. Uncertainty paralyses planning and operations in every public and private healthcare organization.
- The Public Mood: The afterglow of the election has dissipated and the public’s mood has shifted from guarded optimism to anxiety and despair. The public’s uncertain about tariffs and worried about household expenses. Net impact: negative. Healthcare affordability and prices are major concerns to consumers: the majority (76%) think the system is more concerned about profitability than patient care (Jarrard).
Current events in these areas portend headwinds for most public and private healthcare organizations where attention in the next 100 days will be focused in these areas:
- Oversight: New rules, programmatic priorities, key personnel appointments and re-organization in HHS, CMS, the FDA and VA: RFKJ’s MAHA plans and Commission appointees, Oz’ affinity for Medicare Advantage predisposition toward value-based care and Makary’s overhaul of the FDA’s drug oversight process will be “on the table” in the next 100 days.
- Funding: Healthcare funding in the FY 2026 federal budget. The GOP-controlled House and Senate can pass a budget with minimal support from Dem’s that reflects a serious effort to reduce the federal debt ($37 trillion/123% of GDP– up from $20 trillion in 2017). Healthcare cuts expected to be significant though rumored massive cuts to Medicaid unlikely.
- States: State healthcare referenda and executive actions: states are evaluating price controls on drugs and hospitals, reparations from insurers for delays and prior-authorizations, scope of practice restrictions and more. Topping the watchlist in most states is Medicaid funding and potential fallout from discontinued ACA marketplace subsidies factored into the FY 2026 budget being finalized by the GOP-led Congress in DC.
- SCOTUS: Supreme Court decisions will be handed down or before June 30 when SCOTUS’ 2024 term ends including Braidwood Management v. Becerra which will determine whether the Affordable Care Act’s requirement that private insurers cover preventive services without cost-sharing will continue. The court will also opine to the authority of the HHS secretary to appoint members of the U.S. Preventive Services Task Force. The potential impact of these decisions on coverage, insurance premiums and access to preventive health services is pervasive.
- Financial markets: Capital markets are in a watchful waiting mode as US trade policy unfolds, inflation fluctuates, the fed’s interest rate determination is disclosed and consumer spending reacts. Private investing in healthcare remains opportunistic though deal flow is shifting and risk thresholds tightening.
- Polls: Polls draw the attention of media and elected officials. They influence how organizations prioritize advocacy strategies, address consumer complaints and concerns and manage reputations. As reflected in numerous national polls, trust in the system and its key players—insurers, hospitals, drug companies—is at a historic low.
Each sector in U.S. healthcare will be impacted differently: Three face the strongest headwinds:
- Hospitals: Hospitals face enormous financial challenges, especially not-for-profits, safety net, rural and veteran’s hospitals. Last week’s unfavorable SCOTUS decision against hospitals alleging DSH under-payments will cost $1 billion per year. Congressional adoption of site neutral payment policy could cost $15 billion/year. Drug prices, labor costs, insurer payment cuts and red-tape will negate operating margins and lower investment income knee-capping growth and innovation plans. Complicating matters, employed physicians will demand higher pay and more control. And Congressional budget-creators believe the sector’s 31% share of total healthcare spending makes it ripe for cuts attributable to “waste, fraud and abuse”.
- Insurers: Medicare Advantage (which enjoys support by key administrators including CMS’ Mehmet Oz) has become a lightening rod of insurer criticism alongside prior authorization policies that restrict care. Coverage remains key to household financial security but insurers are seen as barriers to rather than facilitators of evidence-based cost-effective care. And the concentration of power in corporate titans (United, Humana, Cigna, CVS, Centene and others) is viewed with skepticism.
- Public Health: Public health is not a priority in the U.S. health system despite recognition that social determinants account for 70% of the system’s $5 trillion spending. Most programs are funded by state and local governments with federal support limited. Public health is not seen as an investment and, in some settings treated with disdain as welfare or waste. As Mayors and Governors develop plans for the rest of 2025 and through 2026, public health cuts will be likely as federal co-funding becomes scarce.
The next 100 days will define the national agenda for the mid-term election in November 2026, reflect the solidarity of the MAGA movement and show the impact of tariffs on inflation, consumer prices and the public’s mood.
Healthcare leaders will be watching closely. All will be impacted.
Paul
Resources in addition to citations below:
Aetna to abandon Affordable Care Act insurance marketplaces, again | STAT
It’s Official: Executive Order Targeting Perkins Coie Is Unconstitutional – Above the Law
Quotables
Jarrard on trust in the health system: “The American public’s discontent with – and skepticism about – the nation’s healthcare industry is rampant. Less than a quarter of people believe providers and payers are more focused on caring for people than on making a profit…What do we know to be true today? Critically, trust that healthcare is fulfilling its mission has plummeted. Americans are frustrated – a sizable number are angry – about a system more than half say needs an overhaul. Understandably, skepticism is higher among those who have faced financial difficulty related to their care. And almost half fall into that category. In short, the perception is that the system is not working”.
National Consumer Survey 2025 – Jarrard Inc
Heinrich on humility and servant leadership: “A CEO’s voice helps steady the narrative with our workforce, reinforces trust, and it reminds our workforce of why they do their work and the mission driven nature of the organization they work for. And I would say during times of rapid change, people aren’t just looking for decisions. They’re looking for someone who reflects their shared purpose, who leads them with both strength and humility. I hope my posts communicate that level of engagement and that desire to be both a voice of purpose and a voice of strength and humility.”
Economy
BLS Jobs report: April 2025: The U.S. economy added 177,000 jobs in April as President Trump’s tariffs took effect, while the unemployment rate held at 4.2%. Economists had penciled in roughly 133,000 payrolls added last month.
The April figures are a slight slowdown from the 185,000 jobs added the prior month, which were downwardly revised by 43,000 payrolls. The data on Friday also showed the economy added 102,000 in February, slightly below the 117,000 initially reported.
As has been the case in recent months, the health care sector saw the strongest employment gains, with 51,000 added payrolls in April.
US Bureau of Labor Statistics May 2, 2025 www.bls.gov
Affordability: Per the Gallup-West Health Affordability Index: “The percentage of U.S. adults who have recently been unable to afford or access quality healthcare has reached 11% — equivalent to nearly 29 million people — its highest level since 2021, More than one-third of Americans (35%) report that they are unable to access quality, affordable healthcare, four points higher than in 2023 and a new high since 2021.
The erosion of cost security in healthcare comes with serious practical implications for the American public. Recent research from West Health and Gallup shows that 12% of U.S. adults report borrowing money to pay for healthcare last year, amounting to an estimated $74 billion borrowed, and nearly 60% of U.S. adults report feeling “somewhat” or “very” concerned about going into debt due to a major medical event. Other common effects of care unaffordability include significant stress for household members, having to cut spending on basic items such as food, transportation and utilities to pay for care, and staying in an unwanted job solely for the health benefits. The rising percentage of Cost Desperate Americans is yet another reflection of the financial strain and real-life anxiety experienced by healthcare consumers in the U.S”
In U.S., Inability to Pay for Care, Medicine Hits New High Gallup
Pitchbook: Economic Forecast: “Against this backdrop, private markets are navigating a more volatile and more complex environment. Deal activity remains subdued, and GPs are adjusting their expectations to reflect a more cautious deployment landscape. Hopes of an exit revival have yet to materialize, and the IPO window has been pushed back. Worries of a global recession and US isolationism may slow new capital formation even further. And yet, as we look to 2029 and beyond, we still see room for growth for private markets—not the breakneck expansion of the past decade, but a steadier, more mature phase shaped by structural shifts in how and where capital is raised. We forecast that global AUM held by GPs will reach $24.1 trillion by the end of 2029, up from nearly $19 trillion today. This growth reflects a base-case trajectory informed by long term capital formation trends, returns, and evolving investor demand. While our estimated 5.2% annualized growth rate is slower than in previous cycles, it signals continued confidence in the durability and relevance of private capital strategies in institutional and individual portfolios alike.”
2029_Private_Market_Horizons_Pitchbook May 1, 2025
Study: Association between Medicaid Expansion and Household Income: finds income improved in states with Medicaid expansion: Cal-Berkeley researchers analyzed US Census administrative income data that tracked 6,120 cohorts covering 84% of working-age adults from 2005 to 2019. Using difference-in-differences, we compared changes in income among low-income adults living in expansion states, before and after expansion, to changes in income in low-income adults living in non-expansion states. Results:
“Low-income adults living in Medicaid-expansion states experienced an average 9.5% relative increase in income in the 5 years after expansion. This impact was concentrated among adults who were likely newly eligible for Medicaid after the expansion. These adults experienced a 9.6% relative increase in income, as well as a 2.1 percentage point (7.3%) relative higher likelihood of having income in the 40th income percentile or higher. We found suggestive evidence that a reduction in unpaid time off from work drove a small part of this relative income increase among the newly eligible.
Hospitals
Strata: March Hospital Benchmarks: “Hospitals nationwide saw increases across most metrics to close the first quarter in March, including both higher expenses and higher revenues.” Highlights from the March 2025 data include:
- Operating margins for U.S. health systems narrowed slightly to 0.9% in March, after holding steady at 1% for both January and February, while hospital operating margins rose year-over-year (YOY).
- Non-labor expenses continued to rise faster than other expense categories, due in part to double-digit increases in both drug and supply expenses versus the same month last year.
- Patient demand was up nationwide across most metrics in March, following decreases in February, as growth in outpatient visits outpaced inpatient admissions.
- Gross outpatient revenues led overall hospital revenue increases, jumping 10.0% YOY as hospitals and health systems continue to see care shift from inpatient to outpatient settings.
- Per-physician expenses rose to $1.2 million in the first quarter, representing an increase of 3% compared to Q4 2024 and 10.3% versus Q1 2024. “
Monthly Healthcare Financial Benchmarks Strata
WSJ: Medicaid payment delays impact on hospitals: “Unexpected delays in billions of dollars of supplemental Medicaid payments have forced some hospitals across the country to cut costs including laying off staff and pausing payments to medical suppliers.
Hospital associations in at least 10 states said the Centers for Medicare and Medicaid Services, the federal agency responsible for approving funds known as state-directed payments, has been unusually slow at processing applications for them. Some of the delays date to the fall of 2024.
CMS didn’t approve any applications for state-directed payment programs between Jan. 17 and late February, according to its website. It has since approved a handful of applications. Hospitals still waiting for a decision from CMS said the recent approvals give them hope that funds will start flowing again.”
Exclusive | U.S. Delays Hospital Payments as Medicaid Scrutiny Intensifies – WSJ
KLAS: EHR Competition: From last week’s KLAS report for 2024:
- Epic grew its market share to 42% of acute care hospitals and 55% of acute care beds–up from 39% of acute care hospitals and 52% of beds in 2023.
- Oracle’s market share of 22% of acute care beds was down slightly from 24% of beds in 2023. The company lost a net of 17,232 acute care multispecialty beds in 2024 after losing more than 15,000 in 2023.
- Meditech lost nearly 7,000 acute care beds in 2024 compared to a net loss of nearly 5,000 in 2023, according to KLAS.
Epic widens EHR market share lead over Oracle: KLAS | Modern Healthcare
SCOTUS ruling against hospitals for 340B underpayments: The Supreme Court ruled in HHS’ favor April 29 in a case challenging how the department calculates disproportionate share hospital payments for Supplemental Security Income benefits.
The case, Advocate Christ Medical Center v. Kennedy, centered on how hospitals calculate the Medicare fraction used in determining DSH adjustments. Hospitals argued that more patients should be included in the Medicare fraction based on their enrollment in SSI, regardless of whether a cash benefit was paid during the month of treatment.
Last week, in a 7-2 decision, the Supreme Court rejected the hospitals’ argument, holding that patients are entitled to SSI benefits for DSH calculation purposes only if they were eligible to receive a cash SSI payment during the month they were hospitalized.
The case dates back to 2017 when more than 200 hospitals sued HHS over its formula for calculating DSH payments. In June 2022, a U.S. district court dismissed the hospitals’ arguments, ruling that HHS’ formula for calculating DSH payments was consistent with the statute and denied the hospitals’ claim for recalculation of their compensation for 2006 through 2009.
PK Note: The court’s April 29 decision is based on its interpretation of how SSI eligibility and benefits should be considered as part of the Medicare fraction which is partially used as the basis for a hospital’s eligibility for DSH payments. The majority opinion written by Justice Barrett concluded arguments by hospitals “failed.”
“The hospitals claim that because HHS misconstrued the Medicare fraction, it underfunded them during the fiscal years 2006 to 2009. The hospitals have lost at every step of this litigation.”
23-715 Advocate Christ Medical Center v. Kennedy (04/29/2025)
Insurers
DOJ Lawsuit against MA insurers and brokers: Last week, the U.S. Department of Justice has filed a lawsuit against Humana, Aetna, and Anthem, along with Medicare Advantage brokers eHealth, GoHealth, and Select Quote, alleging a multi-year scheme involving unlawful kickbacks and discriminatory practices against disabled MA enrollees.
According to the May 1 complaint filed in the U.S. District Court for the District of Massachusetts, the insurers paid hundreds of millions of dollars from 2016 through at least 2021 to the brokers in exchange for preferential treatment, including steering enrollees toward their MA plans and away from competitors, regardless of the quality of the plans. The DOJ filed the lawsuit based on a whistleblower complaint initially filed by a former eHealth employee under the False Claims Act.
DOJ sues the nation’s largest health insurers’ alleging ‘unlawful kickbacks’
Aetna exits ACA marketplace: Last week, CVS Health announced its insurance subsidiary Aetna will exit the Affordable Care Act (ACA) marketplace in 2026. It currently has 1 million members across 17 states enrolled in its ACA plans and is expected to post a $350 million to $400 million loss on its ACA offering this year.
Polling
Jarrard: State of Healthcare 2025: Jarrard surveyed 814 U.S. adults online between 4/18/25-4/25/25. Results:
Faith in the mission of care has plunged. 76%% agree that hospitals in the U.S. are focused mostly on making money vs. 23% in December 2021. Top reasons:
- It’s not affordable (45%).
- It’s not equitable (20%),
- It’s too hard to get care (13%).
- The quality of care is not good enough (13%).
- It’s too complex (9%).
Levels of trust toward key players in the system: % Trust a great deal or a fair amount:
- Nurses: 88%
- Doctors: 70%
- Hospitals:69%
- Your governor: 47%
- President Donald Trump: 38%
- Robert F. Kennedy Jr. :37%
- Mehmet Oz: 29%
- The U.S. Congress: 25%
Appetite for health system change: April 2025 vs. January 2025:
- The U.S. healthcare system needs significant reform or a complete redesign: 63% vs. 57% (+6%)
- The U.S. healthcare system does not need major changes/The U.S. healthcare system has a few things that need adjusting but overall works well: 37% vs. 44%
National Consumer Survey 2025 – Jarrard Inc
Global wellbeing: “The Global Flourishing Study (GFS) is a multi-year longitudinal data collection and research collaboration…includes data collection for approximately 200,000 participants from 20+ geographically and culturally diverse countries and territories…GFS measures global human flourishing in six areas:
- Happiness and life satisfaction
- Mental and physical health
- Meaning and purpose
- Character and virtue
- Close social relationships
- Material and financial stability
Results from first 2 waves Our findings present a different picture of global well-being. As expected, Sweden, for example, had high scores for life evaluation, behind only Israel, another typical standout in the World Happiness Report. When we widened the aperture, however, the picture changed: Sweden had only the 13th-highest composite flourishing score, essentially tied with the United States, and considerably lower than Indonesia, the Philippines and even Nigeria, whose 2023 gross domestic product per capita was just under 2% of America’s.
Across the whole sample of 22 countries, the overall national composite flourishing actually decreased slightly as G.D.P. per capita rose. The only high-income countries that ranked in the top half of composite flourishing were Israel and Poland. Most of the developed countries in the study reported less meaning, fewer and less satisfying relationships and communities, and fewer positive emotions than did their poorer counterparts. Most of the countries that reported high overall composite flourishing may not have been rich in economic terms, but they tended to be rich in friendships, marriages and community involvement — especially involvement in religious communities.”
Alliance Life: Opinions about personal financial security: The Allianz Center for the Future of Retirement conducted its 2025 Annual Retirement Study in January/February 2025 with a sample of U.S. 1,000 adults age 25+. an annual household income of $50k+ (single) / $75k+ (married/partnered) OR investable assets of $150k+ Highlights:
- 64% worry more about running out of money than death “This fear is more prominent among Gen Xers (70%) who are in their 40s and 50s and fast approaching retirement and millennials (66%) than boomers (61%) who are over 60 and many have already retired.”
- 62% say they are not saving as much for retirement as they would like.”
- 54% say inflation contributes to their fear of running out of money
- High inflation (54%), Social Security not providing as much financial support as they need (43%), and high taxes (43%). Boomers (61%) were more likely than millennials (56%) or Gen Xers (55%) to say high inflation contributed to their fear of running out of money.
Americans Are More Worried About Running Out of Money Than Death | Allianz Life
Employee Benefit Research Institute (EBRI): Highlights of the 35th annual Retirement Confidence Survey of 2,767 Americans ages 25 or older and was conducted from Jan. 2 – Feb. 3, 2025:
“Workers’ confidence remained unchanged between January 2024 and January 2025: 67% of workers and 78% of retirees confident they will have enough money to live comfortably throughout retirement. Confidence among retirees has even increased from 74% last year. However, workers remain concerned that increasing costs of living will make it harder for them to save as much as they want. About 7 in 10 workers are worried about making substantial cuts to spending because of inflation, the stock market being volatile and housing costs rising.
- Despite high confidence, Americans are concerned about the U.S. government making significant changes to the American retirement system, with 79% of workers and 71% of retirees being at least somewhat concerned.
- Social Security remains the top source of actual and expected income for Americans in retirement. Most workers (87%) expect Social Security to be a source of income in retirement.
- More workers expect to retire later and many plan to work in retirement. While the median expected retirement age for workers has held steady at 65 years old, a growing share reports their plan to retire at 70 years old or beyond.
- Health care expenses remain a concern for retirees. Workers also find the cost of health care hinders their ability to save. More than half of workers agree that the cost of health care is negatively impacting their ability to save for retirement, while about 2 in 5 retirees note that health care expenses have been higher than expected in retirement.
Regulators and Policymakers
Avalere report on CMS Center for Innovation: “CMMI was created under the Affordable Care Act to test new payment and care delivery models that aim to decrease costs and improve care quality in government healthcare programs. So far, most CMMI models have focused on Medicare. Avalere evaluated 18 CMMI models to determine their impact on federal expenditures, effects on quality of care, and level of transparency during their design and implementation.
Overall, CMMI models cost the federal government $7.7 billion, including $6.4 billion in model net expenses and $1.3 billion in model-specific implementation and evaluation costs. Of the 18 models, a third generated savings for the federal government, a third generated substantial losses, and the final third had “nominal financial impacts.”
The models that had the greatest savings were the Maryland All-Payer model (approximately $975 million) and the Maryland Total Cost of Care model (approximately $689 million). The models that had the greatest losses were the Medicare Advantage Value-Based Insurance Design model ($4.5 billion+), the Comprehensive Primary Care Plus model ($2.8 billion+), and the Primary Care First model (approximately $847 million).
On quality measures, results were also varied. Four of the 18 models had quality improvements, three had “nominal” improvements, four had no significant impacts on quality, and seven had “mixed results.”
Separately, the Healthcare Leadership Council, which commissioned the report, said that it hoped the federal government would seek input from the private sector for feedback on refining value-based care strategies.
“While some CMMI models faced challenges, others demonstrated clear success in advancing value-based care,” said Maria Ghazal, president and CEO of the Healthcare Leadership Council. “As the Trump Administration guides the Center into a new era, this report provides actionable insights for future program design.”
PK Note: The HLC is composed of health industry CEOs who have a vested interest in seeing value-based initiatives including CMMI models expanded. It remains to be seen how Mehmet Oz will direct priorities and resources in CMMI.
Are CMMI models saving money and improving quality?
White House releases FY26 budget cuts: President Trump released his proposed FY2026 budget which includes an overall cut of $163 billion, or 23%, in discretionary non-defense spending, including $33 billion from HHS:
- $18 billion from NIH.
- $3.6 billion from CDC
- $674 million from CMS.
- $1.1 billion from the Substance Abuse and Mental Health Services Administration (SAMHSA).
- $129 million from the Agency for Healthcare Research and Quality (AHRQ).
White House Releases ‘Skinny’ FY26 Budget Proposal With $33 Billion in HHS Cuts | MedPage Today
