The perfect storm has hit U.S. healthcare:
- The “Big Beautiful Budget Bill” appears headed for passage with cuts to Medicaid and potentially Medicare likely elements.
- The economy is slowing, with a mild recession a possibility as consumer confidence drops, the housing market slows and uncertainty about tariffs mounts.
- And partisan brinksmanship in state and federal politics has made political hostages of public and rural health safety net programs as demand increases for their services.
Last Wednesday, amidst mounting anxiety about the aftermath of U.S. bunker-bombing in Iran and escalating conflicts in Gaza and Ukraine, the Centers for Medicare and Medicaid Services (CMS) released its report on healthcare spending in 2024 and forecast for 2025-2033:
“National health expenditures are projected to have grown 8.2% in 2024 and to increase 7.1% in 2025, reflecting continued strong growth in the use of health care services and goods. During the period 2026–27, health spending growth is expected to average 5.6%, partly because of a decrease in the share of the population with health insurance (related to the expiration of temporarily enhanced Marketplace premium tax credits in the Inflation Reduction Act of 2022) and partly because of an anticipated slowdown in utilization growth from recent highs. Each year for the full 2024–33 projection period, national health care expenditure growth (averaging 5.8%) is expected to outpace that for the gross domestic product (GDP; averaging 4.3%) and to result in a health share of GDP that reaches 20.3% by 2033 (up from 17.6% in 2023) …
Although the projections presented here reflect current law, future legislative and regulatory health policy changes could have a significant impact on the projections of health insurance coverage, health spending trends, and related cost-sharing requirements, and they thus could ultimately affect the health share of GDP by 2033.”
As has been the case for 20 years, spending for healthcare grew faster than the overall economy in 2024. And it is forecast to continue through 2033:
| 2024
Baseline |
2033
Forecast |
% Nominal Chg.
2024-2033 |
|
| National Health Spending | $5,263B | $8,585B | +63.1% |
| US Population | 337,2M | 354.8M | +5.2% |
| Per capita personal health spending | $13,227 | $20,559 | +55.7% |
| Per capita disposable personal income | $21,626 | $31,486 | +45.6% |
| NHE as % of US GDP | 18.0% | 20.3% | +12.8% |
In its defense, industry insiders call attention to the uniqueness of the business of healthcare:
- ‘Healthcare is a fundamental need: the health system serves everyone.’
- ‘Our aging population, chronic disease prevalence and socioeconomic disparities are drive increased demand for the system’s products and services.’
- ‘The public expects cutting edge technologies, modern facilities, effective medications and the best caregivers and they’re expensive.’
- ‘Burdensome regulatory compliance costs contribute to unnecessary spending and costs.’
And they’re right.
Critics argue the U.S. health system is the world’s most expensive but its results (outcomes) don’t justify its costs. They acknowledge the complexity of the industry but believe “waste, fraud and abuse” are pervasive flaws routinely ignored. And they remind lawmakers that the health economy is profitable to most of its corporate players (investor-owned and not-for-profits) and its executive handsomely compensated.
Healthcare has been hit by a perfect storm at a time when a majority of the public associates it more with corporatization and consolidation than caring. This coalition includes Gen Z adults who can’t afford housing, small employers who’ve cut employee coverage due to costs and large, self-insured employers who trying to navigate around the 10-20% employee health cost increase this year, state and local governments grappling with health costs for their public programs and many more. They’re tired of excuses and think the health system takes advantage of them.
As a percentage of the nation’s GDP and household discretionary spending, healthcare will continue to be disproportionately higher and increasingly concerning. Spending will grow faster than other industries until lawmakers impose price controls and other mechanisms like at least 8 states have begun already.
Most insiders are taking cover and waiting ‘til the storm passes. Some are content to cry foul and blame others. Others will emerge with new vision and purpose centered on reality.
Storm damage is rarely predictable but always consequential. It cannot be ignored. The Perfect has Hit U.S. healthcare. Its impact is not yet known but is certain to be a game changer.
Paul
PS: The specifics of the Big Beautiful Budget are being hashed out in DC this week. The implications for healthcare are huge. I will be following. Thanks for reading.
Resources
Sections in today’s report:
- Quotables: Big Beautiful Budget Bill, Industry
- Economy
- Hospitals
- Insurers
- Physicians
- Polling
- Public Health
Quotables: Big Beautiful Budget Bill
CBO analysis of budget bill: “The nonpartisan agency’s fullest accounting of the House-passed One Big Beautiful Bill Act of 2025 details how President Donald Trump and the GOP-led Congress intend to slash federal spending to partially offset trillions of dollars in tax cuts. In healthcare, Medicaid would be subject to the lion’s share of the cuts and see its federal budget diminish by $864 billion. The work requirement provisions alone would reduce spending by $344 billion. The CBO projects that the Medicaid cuts and other policies would lead to 10.9 million people becoming uninsured, including 7.8 million who would lose Medicaid benefits.
Most of the healthcare cuts come from the section of the bill authored in the House Energy and Commerce Committee, which total $1 trillion. The House Ways and Means Committee’s part of the bill includes several policies targeted at the Affordable Care Act of 2010 that would crimp premium tax credits for migrants and step up eligibility checks for everyone to save about $230 billion. Those provisions account for about 2.3 million people losing insurance.”
Congressional Budget Office www.cbo.gov
NY Times on Medicaid work requirements: “Republicans are pushing to add Medicaid work requirements to the budget bill they are moving through Congress, saying the provisions are necessary to cut costs and get more low-income Americans back on the job.
State experiments with that approach show its limits.
A short-lived program in Arkansas in 2018 didn’t boost employment among targeted residents, research has shown. The bureaucracy and confusion of the program also resulted in thousands of people losing their Medicaid coverage.
A current Medicaid pilot program in Georgia, meanwhile, has enrolled a fraction of the people the state aimed to register, in part because the monthly reporting requirements to prove employment are so cumbersome, according to doctors and healthcare experts…
Under new requirements in the Republican bill that passed the House last month, most childless adults without disabilities between the ages of 19 and 64 would need to spend 80 hours a month in work, job training or community service to qualify for Medicaid. Parents of dependent children, people with substance-use disorders and certain others would be exempt.
The Senate version of the bill unveiled this past week is more restrictive, requiring parents with children 15 and older to meet work requirements. Republicans aim to pass a bill by July 4.
The Congressional Budget Office estimates that the House rules would apply to about 18.5 million low-income adults, about 5.2 million of whom would likely lose Medicaid coverage by 2034 as a result. That would save Medicaid about $344 billion over a decade, the CBO said. It added that the House bill overall would increase the nation’s labor supply by 0.6% on average through 2034, mostly through tax cuts that encourage people to work. Changes to Medicaid, food stamps and student loans “would increase the supply of labor to a lesser degree,” the CBO said.
According to a KFF analysis of Census Bureau data, 44% of Medicaid recipients under 65 were working full time in 2023 and 20% were working part time. Another 29% weren’t working because of caregiving responsibilities, school attendance, illness or disability. About 8% were unemployed owing to retirement, an inability to find work or other reasons.”
Medicaid Work Requirements Have Mostly Failed. The GOP Is Still Pushing Them. – WSJ
Editorial Board, Wall Street Journal: “No industry other than perhaps higher education feasts more on government than hospitals. So, it’s no surprise that hospitals are blaring their sirens over the GOP’s effort to clamp down on the scheme they use to grab more federal Medicaid money.
It’s hard to think of a bigger government-sanctioned racket than Medicaid provider taxes. States pioneered these during the 1980s to obtain more federal Medicaid matching funds and reduce spending on the program from their general tax revenue. The free lunch has enabled states to expand benefits and greatly diminished the incentive to operate the program efficiently.
Here’s how it works: States assess taxes on health providers—namely hospitals. They then channel the revenue back into their Medicaid programs to draw more federal money. For every dollar that states spend on Medicaid, they get one to three dollars more from the feds—and nine for able-bodied individuals covered under ObamaCare. Hospitals then receive more in Medicaid payments than they pay in the provider taxes…
Medicaid often pays below the cost of care, but supplemental state payments funded by provider taxes more than compensate. Such payments made up a large share of earnings last year of for-profit hospitals such as Universal Health Services (45%), Tenet (25%) and HCA (18%). Most hospitals are prospering.
One reason is that government regulations have encouraged hospitals to merge and buy physician practices, which increases their leverage with insurers. Since 2010, prices charged by hospitals have increased 97%, compared to 31% for physicians, 42% for prescription drugs, while overall inflation has been 48%, according to the Bureau of Labor Statistics.
Medicare also pays hospitals higher rates than independent physicians for the same treatments. The federal 340B program lets hospitals buy medicines at steep discounts and charge markups to private insurers. Republicans have shrunk from targeting these undeserved hospital perks, so the least they could do is stop hospitals from their dishonest Medicaid scheme.
The Great Medicaid Hospital Scam – WSJ June 25, 2025
Modern Healthcare on hospital posturing: “Hospitals have beseeched Republicans not to leave them bearing the financial burden of the more than $1 trillion in healthcare cuts they hope President Donald Trump signs into law by Independence Day.
The message doesn’t seem to be breaking through, based on interviews last week with several GOP senators, some of whom seek even steeper spending reductions.”
GOP Senators shrug at hospitals’ Medicaid, uncompensated care woes – Modern Healthcare
STAT on hospital lobbying: “Hospitals are now lobbying senators to return to the House’s version of the bill, which also is expected to substantially cut hospitals’ revenues and the number of patients covered — but less so than the Senate’s version of the bill.
But that lobbying effort is butting up against senators who want to further reduce government spending. The Congressional Budget Office has not yet projected the budget impact of the Senate bill.”
Hospitals sound alarm: Trump tax bill a threat to rural health care
Quotables: Industry
NEJM on healthcare corporatization: “Corporatization” of health care, a process predicted decades ago, now refers to the general trend throughout the industry toward higher levels of integrated control by consolidated profit-seeking enterprises
Defining Health Care “Corporatization” | New England Journal of Medicine
Cassidy on new vaccine panel: “Although the appointees to ACIP have scientific credentials, many do not have significant experience studying microbiology, epidemiology or immunology. In particular, some lack experience studying new technologies such as mRNA vaccines, and may even have a preconceived bias against them. Robust and transparent scientific discussion is important, so long as it is rooted in evidence and understanding. Wednesday’s meeting should not proceed with a relatively small panel, and no CDC Director in place to approve the panel’s recommendations. The meeting should be delayed until the panel is fully staffed with more robust and balanced representation—as required by law—including those with more direct relevant expertise. Otherwise, ACIP’s recommendations could be viewed with skepticism, which will work against the success of this Administration’s efforts.”
X Post U.S. Senator Bill Cassidy, M.D. June 23, 2025 https://xcom/senbillcassidy
Health Affairs commentary: prices as contributor to costs: “Most OECD governments intervene in price-setting and price regulation to influence provider behaviors and improve the performance of their health systems, as well as to maintain cost control. However, in the US, price regulation across the board is challenging due to the diverse mix of coverage arrangements across different age-groups and regions, so the prices paid for care can vary substantially among different payers. At the same time, there is very limited information available to disentangle the interplay between price growth and volume growth for different types of payers, making it difficult to design tailored policy interventions.
In fact, projections from the Medicare Payment Advisory Commission (MedPAC) indicate that Medicare spending for 2024-2033 will be driven entirely by changes in volume—enrollment increases and utilization growth—with the prices paid by Medicare expected to slightly decline. Yet, the national projections by Keehan et al. show that health prices at an aggregate level will grow markedly, implying that health price growth is concentrated among other payers, likely private insurance or possibly even the prices paid out-of-pocket by households. This would have important implications for all Americans, reducing wage growth, decreasing affordability of care for the commercially insured, and even eventual knock-on effects on Medicare if pent up demand accumulates among new enrollees due to financial barriers in access prior to Medicare enrolment…”
Health Affairs commentary on health costs, state responses: “Over the past several years, commercial health insurance spending has been generally growing far faster than Medicare or Medicaid. The growth is mostly due to increasing prices—particularly for hospital outpatient services and pharmaceuticals—rather than more use of services. This year’s reporting will likely show more of the same.
These findings vindicate economic theory. In any market, sellers of services seek to gain economic power to set prices. Then they do. In the absence of a competitive market and without real consequences, most large providers identified in cost-growth-target states have assailed the evidence that their prices are driving spending and continue to find it easier to change their revenues than their cost structures.
In response to this accumulating evidence of runaway commercial health care prices, however, and despite resistance from providers, state legislators are starting to act with a variety of approaches. Seven of the 12 states with legislation in 2025 to tie commercial hospital prices to Medicare rates and six of the 12 states with enhanced health care market oversight proposals (such as the Oregon Health Authority’s Health Care Market Oversight Program) have cost growth targets. Connecticut, New Jersey, and Oregon are weighing legislation to curb prescription drug prices…
All community leaders should be engaged in advancing solutions that meet their specific needs. Without that engagement, the inverse relationship between our country’s spending on health care and the actual health of its residents and our government budgets will persist—and it cannot be ignored any longer…”
State Health Care Cost Growth Targets: Moving from Aspiration to Evidence to Action | Health Affairs
Axios on Mandani primary win in Democratic primary for Mayor of New York: Reality check: “New York is not the rest of the country. Mamdani is running in one of the most progressive cities in America, and there’s little evidence he has crossover appeal with the kinds of Gen Z men who swung to Trump in 2024.
“Red pill” culture and social conservatism, which helped power some of Trump’s gains among young men, aren’t necessarily receptive to Mamdani’s brand of democratic socialism. Still, Mamdani’s campaign offers a rare glimpse of what it might look like if Democrats tried to compete for Gen Z’s attention on cultural terrain — not just political ground. His model challenges the party to rethink how it communicates in an era where identity, aesthetics and authenticity often matter more than ideology.”
Left’s Gen Z Playbook Axios Raleigh June 28, 2025
Economy
Pitchbook: market volatility: “With tariffs and heightened geopolitical unrest (to say the least), the first half of 2025 has contained a number of market-roiling surprises.
On April 8, the S&P 500 closed down 12% from just a week prior due to tariffs and market uncertainty.
This week, it hit all-time highs, about 23% higher than April 8.”
Pitchbook my.pitchbook.com/viewnewsletter/XNJi1-Mxz80/pevc
Conference Board: Consumer confidence: “The Conference Board’s consumer-confidence index fell to 93, from 98.4 in May. The fall was a surprise to analysts polled by The Wall Street Journal, who were expecting the index to improve to 99.5.
Instead, consumers remained nervous about tariffs even after the White House took steps to de-escalate the trade war it kicked off in earnest in April… The survey’s forward-looking expectations index fell to 69, from 73.6 a month earlier.
The Conference Board says that values below 80 often signal a recession ahead.
The survey’s closely watched labor-market indicator degraded. The survey’s labor-market differential fell to 11.1 percentage points, from 12.7 percentage points in May. The figure is calculated by subtracting the share of consumers who think jobs are “hard to get” versus the share who think they are “plentiful.”
Consumers also turned more pessimistic about future business conditions. In June, 16.7% said they expect business conditions to improve in six months, down from 19.9% in May.”
Survey Shows U.S. Consumer Confidence Worsened in June – WSJ
Reuters: Economic indicators slow: “Global shares hit their third record high in three days on Thursday while the U.S. dollar sank to its lowest level in more than three years amid growing market concerns about the Federal Reserve’s independence.
The U.S. dollar index was down nearly 0.43% on the session and more than 10% for the year. If the greenback’s losses hold until the month ends, it will be the biggest fall in the first half of a year since the start of the era of free-floating currencies in the early 1970s. Wall Street’s main indexes finished higher, with the benchmark S&P 500 and Nasdaq nearing record highs. The Dow Jones Industrial Average rose 0.94% to 43,386.84, the S&P 500 rose 0.80% to 6,141.02 and the Nasdaq Composite rose 0.97% to 20,167.91.
European shares finished up 0.09%. MSCI’s gauge of stocks across the globe rose 0.81% to 909.47, hitting a new record high for the third straight session. “
Stocks hit fresh record, dollar weakens to lowest in three years amid Fed worries June 27, 2025
Bloomberg: 1Q 2025 corporate profits down: “Corporate America’s profits are slipping. Last week, the Bureau of Economic Analysis confirmed that corporate post-tax profits dropped in the first quarter by 3.3% — by far their biggest fall since the pandemic.
When companies make less money, it’s often a harbinger of an economic slowdown. In this case, it also raises the more profound question of whether the Trump 2.0 agenda is deliberately aimed at companies’ bottom line.
This sounds outlandish. The S&P 500 just hit an all-time high, so Corporate USA is worth more than ever. But it makes sense. After-tax profits account for an unprecedented 10.7% of gross domestic product, when in the last 50 years of the 20th century, they never exceeded 8%. The only time approaching their current share of the economy was in 1929 on the eve of the Great Crash. If the nation is to deal with inequality, money must be redistributed from somewhere; corporate profits are an obvious source of funds….
Rising to the top of a company never used to be a ladder to mega-wealth. That was reserved for entrepreneurs who founded their own firms. Modern executive pay has changed that and allowed CEOs to become billionaires by meeting unchallenging targets for their share price. The gulf between their pay and workers’ wages shrieks of injustice; according to the Economic Policy Institute, the CEO-to-worker compensation ratio reached 399-1 in 2021; in 1965, it was only 20-1. From 2019 to 2021, CEO pay rose 30.3% while those workers who kept their jobs through the pandemic got a raise of 3.9%.
This can easily be dismissed as the politics of envy, but executive compensation now arguably skews the entire economy…”
MAGA Doesn’t Mean Making Profits Great Again – Bloomberg June 28, 2025
McKinsey report: employer cost containment strategy: “Employers are the largest purchasers of health insurance in the United States, representing approximately 165 million lives1 and more than $800 billion in healthcare expenditures…
McKinsey’s 2024 National Employer Health Benefits Survey surveyed 1,659 employer benefits decision-makers, including C-level executives and HR or benefits leaders, on their priorities and view of the market…Employers expect:
Changing dynamics. Commercial healthcare costs are expected to rise by 9 to 10% annually from 2024 to 2026, and tariffs are expected to affect this cost further.
An appetite for disruptive solutions. Large employers are more interested in and willing to adopt alternative health plan options such as virtual-first health plans and dynamic co-payment models, as reflected in McKinsey’s 2024 Employer Health Benefits Survey. Our 2024 analysis showed that nearly 12 million members covered by health plans could move to an innovative product design by 2030.
Transforming employer health benefits: Large employers’ activist role | McKinsey
Axios on housing market: “Even while the stock market approaches an all-time high, there is a big dark cloud hovering over the economy: the housing market. Home sales are hovering at historic lows, as economic uncertainty and high mortgage rates hold back buying.
By the numbers: Pending home sales — deals that are in contract but not yet closed — rose 1.8% in May over last month but are still at record lows, per data from the National Association of Realtors…The only other time over the past 20 years that pending home sales have been this low was in 2020, when the pandemic briefly froze the real estate market.
Zoom in: Other indicators are also flashing terrible. Existing home sales fell year-over-year in May to their slowest pace since 2009 when the market was in tatters during the financial crisis, per the National Association of Realtors. Home prices are now rising at the slowest annual pace in two years, according to Case-Shiller data…
The big picture: There’s not much to like in real estate right now, with news of immigration enforcement actions at home building sites, tariffs increasing the price of construction materials and, of course, weak demand in general.”
Axios Markets June 27, 2025
Business insider: housing market slowly turning in favor of buyers. A Redfin report showed US home prices rose 0.7% in May, the smallest increase since 2023. They expect this trend to continue and potentially start showing year-on-year declines by the end of 2025.
Home Prices Are Dropping Fast in These 5 Major US Cities – Business Insider June 23, 2025
Harvard report on housing market: “In 2025, households and housing markets face an ever-more challenging environment. High home prices and elevated interest rates reduced
homebuying to its lowest level since the mid-1990s. Increases in both insurance premiums and property taxes have heightened financial stress on homeowners and landlords. And, despite an abundance of new apartments, high rents have left more people than ever cost burdened, and have contributed to a sharp rise in homelessness…
As of early 2025, prices are up 60% nationwide since 2019 and still rising at a rate of 3.9% year over year… Prices increased in all four regions and in 88 of the top 100 largest metro areas. Consequently, the US median existing single family home price hit a new high of $412,500 in 2024, according to the National Association of Realtors (NAR). This is a shocking five times the median house hold income and significantly above the price-to- income ratio of 3 that has traditionally been considered affordable.
As prices rose, existing home sales dropped to a Inventories were up in 98 of the nation’s 100 largest metros in early 2025. “
THE STATE OF THE NATION’S HOUSING 2025
Student loan debt and delayed care: “After more than three years of paused payments and halted interest accumulation1 and a subsequent 12-month suspension of the consequences of missing payments, the student loan repayment system has returned to its pre-pandemic status quo. Millions of borrowers who were making payments before the pause have now returned to active repayment, while a group of new borrowers is entering repayment for the first time. The Department of Education estimates that approximately 7 million people are in this group of new borrowers
When asked if they had experienced any hardships from a list of negative financial events in the previous 12 months, 70% of new borrowers said they had experienced at least one of the hardship events. Specifically: Nearly one-half (46%) reported they skipped paying another bill or paid another bill late (aside from their mortgage or rent) or delayed medical care or paying for medical expenses (42%).
Over one-third had overdrawn their checking account (34%); applied or considered applying for public assistance programs (33%); skipped or reduced the size of meals or received or sought out free food (34%); or had their credit, debit, or prepaid card declined because it was over the limit or lacked sufficient funds (31%).”
A Look at New Student Loan Borrowers | The Pew Charitable Trusts
WSJ on consumer reselling market: “But secondhand shopping has also acquired a retro chic, with younger consumers scouring online apps (as well as thrift and vintage stores) for one-of-a-kind items that cost less and are easier on the environment…
Indeed, consumers between the ages of 25 and 34 were most likely to have bought “pre-loved goods” over the last year, with 71% of those surveyed having done so, according to a report from eBay. The online bazaar is looking to draw in more of those young shoppers: It recently launched an ad campaign with YouTube star Emma Chamberlain.
The resell sector is expected to reach $1.04 trillion globally by 2035, up from $186 billion last year, according to Transparency Market Research, spanning everything from fashion to electronics, furniture and cars. The luxury market is also seeing a drastic shift. About 27% spent online on luxury apparel was at fashion resellers last year, according to a report from Mastercard.
Some large retailers are also dipping into the secondhand market. REI, Lululemon—even Shein—have sections on their websites where you can buy preowned items from their brand.”
Bipartisan Legislators Want More People to Shop Secondhand – WSJ
Buy Now, Pay Later financing increasing: “Americans are managing their Buy Now, Pay Later loans soon could be reflected in their credit scores.
FICO plans to launch a suite of credit scores later this year that incorporate BNPL data, providing lenders a window into what’s been a big blind spot: consumers’ repayment behavior on these increasingly popular installment loans.
BNPL loans can serve as an alternative to credit cards and are used by consumers who are seeking more flexible payment options, who want to overcome a tight financial spot, or who are looking to smooth out some bigger transactions to better meet their budgets…
By and large, the popular installment loan activity is a gigantic black box. The industry remains largely unregulated, and BNPL providers aren’t required to report to credit agencies, lenders or other data-keepers.”
Buy Now, Pay Later loans will factor in to Americans’ credit scores | CNN Business
Giving USA Report: Philanthropy; In 2024, charitable donations in the U.S. hit $592.5 billion–up 3.3% from 2023 and the second-highest inflation-adjusted total ever recorded.
Donations to nearly every cause grew, from education to environment to the arts. Individuals were the leading source of giving, donating $392 billion last year and topping the total gifts of foundations and corporations. Religious causes received the greatest share of donations — 23%. Giving to healthcare was up 5% to $60.51 Billion (+2% adjusted for inflation)
PK note: The +2.8% GDP growth and stock market gains played a major role in driving philanthropy last year.:
Hospitals
Kaufman Hall: 2024 non-profit hospital finances: “For most of the country’s largest nonprofit health systems, 2024 will go down as a year of substantial revenue growth, solid margin improvements and some noteworthy dealmaking…
The increasing scale of operations was accompanied by greater expenses, though a tighter handle on pain points like labor costs helped many systems boost their full-year operating margins by an average 9% compared to the prior year…
For nonprofit hospitals specifically, Fitch Ratings reported median operating margin flipping from negative to positive among rated organizations, as median revenue grew and personnel costs claimed a smaller share of total operating revenues.
While the overall picture suggests increasing stability after a period of pandemic disruption, industry watchers have warned that not all provider organizations are improving. Credit agencies’ rating actions more often reflected downgrades (95) than upgrades (37) across 2024. And a performance gap among hospitals that came to the forefront in 2023 still appears to be widening…
The country’s 10 largest nonprofits are, generally, catching the rising tide…As for their scale, these major systems grew their total operating revenues by a collective 10.6% from fiscal years 2023 to 2024—outpacing the 8.4% increase between fiscal years 2022 and 2023.”
Kaufman Hall www.kaufmanhall.com
NFP Hospitals 2024 financial results: “2024 will go down as a rebound year for the nation’s largest nonprofit health systems, with strong demand, improved payer contracts, and tighter cost controls driving solid revenue and margin gains. Collectively, the top 10 systems saw a 10.6% jump in operating revenue year-over-year—even as challenges like labor costs and uneven performance across the sector persist. The outlook is brighter, but not without warnings of a growing divide between top performers and struggling hospitals.”
Top 10 nonprofit health systems by 2024 operating revenue
Report: Patient boarding in hospital EDs: “When hospital beds are scarce, patients “board” in the emergency department until an inpatient bed becomes available. Using national data on 46.2 million hospitalizations, 2017–24, we documented rising burdens of hospital boarding in the US. At the peak in January 2022, 40.1% of patients boarded for more than four hours, and 6.3% boarded for more than twenty-four hours.”
Insurers
Study: Price variation in commercial insurance: In this cross-sectional study, we examined price data from Clarify Health for 10 common surgical services from 4 large national insurers (BlueCross BlueShield [BCBS], UnitedHealthcare, Cigna, and Aetna), which constitute 78% of market share. Results:
“The magnitude of facility prices was approximately 9 times higher than professional prices for surgical procedures and 4 times higher for endoscopic procedures. Price variation was moderate for professional services and high for facility services, especially for endoscopic procedures. For example, diagnostic colonoscopy (CPT 45378) has a median facility cost ranging from $925 to $3571 depending on the payer. Our price indices indicate professional prices are highest for UnitedHealthcare and BCBS, and facility prices are highest for Aetna and UnitedHealthcare.”
KFF on Medicaid enrollment: “The 71 million number comes from CMS administrative data (meaning program data reported from the states, not self-reported survey data). It doesn’t include the closely connected CHIP program in the 71 million count. It’s also the most recent data (2025). However, this count excludes people who get Medicaid coverage for some—but not all—Medicaid-covered services, such as for family planning. During the pandemic and the unwinding of the continuous enrollment provision, these data were updated regularly and helpful to track changes during a time of dynamic enrollment changes.
You likely already figured out that the 83 million number then includes the people who have partial Medicaid coverage for significant services but not everything covered by Medicaid. A large group of them have coverage for family planning and breast and cervical cancer.”
Beyond the Data: The Mystery of How Many People Are on Medicaid June 24, 2025
Insurers announce prior authorization policy initiative: Last Monday, UnitedHealth Group, Elevance Health, Aetna, Cigna and more than 44 other health insurance companies jointly announced an initiative to streamline prior authorizations.
Under the auspices of leading industry groups AHIP and the Blue Cross Blue Shield Association, the coalition of for-profit and nonprofit insurers, the group agreed to…
- Standardize electronic prior authorization submissions using Fast Healthcare Interoperability Resources (FHIR®)-based application programming interfaces.
- Reduce the volume of medical services subject to prior authorization by January 1, 2026.
- Honor existing authorizations during insurance transitions to ensure continuity of care.
- Enhance transparency and communication around authorization decisions and appeals.
- Expand real-time responses to minimize delays in care with real-time approvals for most requests by 2027.
- Ensure medical professionals review all clinical denials.
These new practices will apply across all forms of insurance that cover 257 million people, including employee benefit plans, individual market coverage, Medicare and Medicaid and be implemented in the next 2 years.
KFF analysis: Prior authorization business practices: The KFF study examined Medicare Advantage claims denials, appeals and their outcomes from the 2023 contract year. It found 6.4% of all claims submitted for prior authorization were denied in full or part. About 12% of those denials were appealed, and 82% of denials were overturned.
Among insurers, Centene had the highest percentage of initial denials at 13.6%, while Human denied 3.5% of claims.
| Category | Reviews | % Denied | % Denials
Appealed |
% of Denials
Overturned |
| Certain hospital outpatient department services | 132.655 | 21.4% | 6.6% | 22.2% |
| Repetitive, scheduled non-emergent ambulance transport | 31.087 | 36.8% | 19.6% | 26.3% |
| Certain durable medical equipment, prosthetics, orthotics and supplies | 97,334 | 33.1% | 1.5% | 63.9% |
| All select services | 260,986 | 27.6% | 6.4% | 28.7% |
KFF analysis of Centers for Medicare and Medicaid Services data
VA health loophole targeted in proposed legislation: “A bipartisan group of lawmakers is aiming to close a loophole that allows large healthcare insurers to charge Medicare billions of dollars to cover veterans who get some or all of their treatment through the taxpayer-funded U.S. Department of Veterans Affairs health system.
The group introduced legislation Monday (June 16) in the House and Senate that would permit the VA to charge private health insurers in the Medicare Advantage system for medical care that it provides for the insurers’ members.
The bill was sparked by a December Wall Street Journal investigation, said Rep. Lloyd Doggett, a Texas Democrat and sponsor of the new House legislation. The investigation found the federal government paid insurers an estimated $44 billion from 2018 through 2021 to cover veterans in Medicare Advantage plans who were also getting healthcare through the VA.
The Journal, using figures provided by researchers at Brown University and the Providence VA, found that the VA spent about $17 billion caring for veterans who were Medicare Advantage members in 2021. That amounted to about 17% of the VA’s healthcare expenditures that year.
Physicians
AAPA Report: 2025 Physician Associate (PA) Median Compensation:
- Emergency Medicine: $146,000
- Surgical Subspecialties: $136,000
- Other Specialties: $135,000
- No Medical Specialty: $133,310
- Pediatric Subspecialties: $132,000
- Internal Medicine Subspecialties: $131,000
- Primary Care: $125,850
- National Total: $134,000
Note: The data reflect PAs who worked 32 hours or more per week in 2024. “Compensation” includes all compensation types: base salary, annualized hourly wage, and productivity pay.
American Academy of Physician Associates 2025 Salary Report, April 2025
Commentary: Trust in physicians: “Marcus Welby, MD. Ben Casey. Dr. Kildare. These TV physicians were the iconic popular representations of medical practice when clinical professionals’ knowledge, compassion and courage were unquestioned some 50 years ago.
The nation no longer resides in that black-and-white television world. Now, a population that believes it’s more informed and empowered to act is second guessing much of what the medical establishment is dishing out.
With the advent of greater access to healthcare information, consumers have Increasingly doubted the previously unquestioned belief that physicians and medical professionals were the source of all truth.
In sum, the industry is in the midst of a crisis of credibility and authority. Without that most basic level of trust, the industry faces new challenges in treating patients…”
HDM ONE story: Healthcare facing antagonism aimed at its credibility, authority
Polling
Study: Trust in public health institutions: “A multi-year study tracking Americans’ trust in public health institutions reveals a significant loss of confidence in health agencies like the U.S. Centers for Disease Control and Prevention (CDC) and National Institutes of Health (NIH) during the COVID-19 pandemic — a shift researchers say could have lasting implications on public health communication and policy.
Published Thursday in PLOS Global Public Health, the study surveyed more than 3,000 U.S. adults between February 2020 and October 2024. Researchers found that the percentage of Americans expressing high confidence in the CDC dropped from 82% in early 2020 to just 56% in 2022. The NIH saw a similar 25-point decline over the same period.
From February 2020 to June 2022, Americans’ confidence declined for all entities asked about, most notably the Centers for Disease Control and Prevention (CDC, 26%). Despite slight increases between 2022 and 2024, levels of confidence have not recovered to pre-pandemic values. In contrast, Americans’ confidence in their own doctor and their local health department increased from 2022 to 2024 (5% and 19%, respectively), as did confidence in the White House (7%). Our study saw a marked decrease in confidence in public health institutions among US adults, a finding which has implications for the effectiveness of public health communication. Our results highlight the potential for local entities, including personal doctors and local health departments, to leverage the existing trust between them and their public to provide essential public health information and address low confidence in national entities.”
In a crisis of public health trust, patients still rely on their doctors
Public Health
Census Bureau: Population aging: “The U.S. population age 65 and older rose by 3.1% (to 61.2 million) while the population under age 18 decreased by 0.2% (to 73.1 million) from 2023 to 2024, according to the Vintage 2024 Population Estimates released today by the U.S. Census Bureau.
The data show the population continued to age, with the share of the population age 65 and older steadily increasing from 12.4% in 2004 to 18.0% in 2024, and the share of children declining from 25.0% to 21.5%…
From 2020 to 2024, the older population grew by 13.0%, significantly outpacing the 1.4% growth of working-age adults (ages 18 to 64), while the number of children declined by 1.7%.
As recently as 2020, there were just three states where older adults outnumbered children: Maine, Vermont, and Florida. By 2024, this number had increased to 11, with Delaware, Hawaii, Montana, New Hampshire, Oregon, Pennsylvania, Rhode Island, and West Virginia joining their ranks.
Similarly, from 2020 to 2024, the number of U.S. metro areas with more older adults than children increased from 58 to 112. This represents nearly 30% of the nation’s 387 metro areas.
In 2020, 31.3% (or 983) of the nation’s 3,144 counties had more older adults than children. This figure increased to almost 45% (1,411 counties) in 2024. In both years, most of these counties had small populations and were located outside of metro and micro areas.
Older Adults Outnumber Children in 11 States, Nearly Half of Counties
ICER on vaccine policy: “ACIP recommended on Thursday that Americans should not receive flu vaccines containing the preservative thimerosal. The votes reflected new members’ concerns about safety issues tied to the preservative, despite numerous studies conducted over the past quarter-century that have found no such issues.
In practical terms, the move by the Advisory Committee on Immunization Practices will have little, if any, impact on Americans, as only a small percentage of the flu vaccine that comes to the U.S. market contains thimerosal. About 4% of flu doses here come in multi-dose vials, which contain thimerosal to lower the risk that a vial might become contaminated in the process of withdrawing successive doses. But in broader terms, it serves as a win for Kennedy, a longtime vaccine critic who has shown his anti-vaccine base that he will use his position to deliver on the concerns of that community. “
PK note: All of the committee recommendations in Atlanta last week passed with 5-1 votes with one abstention
Study: Abortion prevalence: “Abortions are on the rise in the U.S. despite more than a dozen states enforcing near-total bans on the procedure, according to a report released Monday (June 16) by #WeCount, an abortion-data project sponsored by the Society of Family Planning, which supports abortion rights. There were more than 1.14 million abortions in the U.S. in 2024 compared with around 1.06 million in 2023. Highlights:
- One in four abortions in the U.S. were provided using telehealth at the end of 2024, compared with just 7% at the end of 2022..
- Abortion volume is higher in 2024 than it was in 2023 or 2022.
- The majority of abortions occurred in-person.
- The number of abortions delivered via telehealth has continued to increase since April 2022, when #WeCount became the first national study to track telehealth.
- By the end of 2024, 1 in 4 abortions was provided via telehealth.
- Shield laws continue to facilitate the receipt of medication abortion, with an average of 12,330 abortions per month provided under shield laws by the end of 2024.
- Drivers of these trends are unclear, especially in the context of multiple changes in the service delivery environment; new evidencethat helps contextualize these findings continues to emerge.
Society of Family Planning: #WeCount report, April 2022 to December 2024
