This week, 8000 healthcare operators and investors will head west to the 44th Annual JP Morgan Health Conference in San Francisco. Per JPM: “The (invitation-only) conference serves as a vital platform for networking, deal-making, and discussing the latest innovations in healthcare, attracting global industry leaders, emerging companies, and members of the investment community.” Daily media coverage will be provided by Modern Healthcare and STAT and most of the agenda will be at the St. Francis Hotel at Union Square.
General sessions about drug discovery, AI in healthcare obesity and more are scheduled, but that’s not why most make the trip. Representatives of the 500 presenting companies are there to engage with health investors in the tightly orchestrated speed-dating format JPM has fine-tuned through the years.
JPM circa 44 will be no different this year. It’s scheduled as company financials and market indicators for 2025 are coming in. Healthcare deal-flow was robust and bell-weather companies had a good year overall. The S&P, Dow and Nasdaq ended the year at all-time highs and investors appear poised to do more healthcare deals in 2026. Despite growing voter concern about affordability and their costs of living, there’s nothing on the immediate horizon that will dampen healthcare investor appetite for deals. That includes policy changes from the Trump administration that advantage healthcare companies that adapt to the administration’s playbook. It’s built on 3 fundamental assumptions:
- The healthcare system is fundamentally flawed. Waste, fraud and abuse are deep-seeded in its SOP. It protects its own and resists accountability. The public wants change.
- Fixing the health system requires policy changes that are attractive to the private companies that currently operate in the system. A federally-mandated regulatory framework (aka “the Affordable Care Act”) will cost more and be harmful. Companies, not Congress, are keys to system transformation.
- Voters will support changes that make healthcare services more affordable and accessible. The means toward that end are less important.
What’s evolved from the administration’s first year in office is a mode of operating that’s predictable and uncomfortable to industries like healthcare:
It’s transactional, not ideologic. The administration believes its control of Congress, SCOTUS, the FTC and DOJ and legislatures in red states give it license to disrupt norms with impunity. Price transparency, limits on consolidation, mandated participation in ACOs, supply-chain disruption and AI-enabled workforce modernization are ripe for administrative action. A long-term vision for the system is not required to make needed short-term changes supported by its MAHA base.
It’s populism vs. corporatization. Healthcare’s proclivity for self-praise, addiction to “Best of…” recognition, celebrity CEOs and handsome executive compensation have postured it as “Big Business” in the eyes of most. Business practices associated with corporatization are fair game to the administration’s corrective agenda: hearings in the House Ways and Means and Energy and Commerce and Senate Health, Education, Labor and Pensions (HELP) committees will showcase the administration’s populist grievances. The administration will lavish advantages on private organizations that demonstrate support for its policies.
This week, the Senate will probably green-light a two-year extension of Tax Credits to temporarily avoid premium hikes. Barring a major escalation of tension abroad, attention will turn back to affordability where the K-economy is exacting its toll on lower-and-middle income households and widening despair among the young.
The health system’s role in making matters better or worse for consumers will be front and center alongside housing and costs of living. That context will be key to discussions between health investors and companies seeking their funds, though subordinate to term sheets.
In 2026, the Trump effect on dealmaking in healthcare will be significant.
Paul
Quotables
Medpage On the Pitt: “Ultimately, what “The Pitt” demonstrates so well isn’t so much the misery of doctors, but the complexity of medicine. Medicine is beautiful, unpredictable, heartbreaking, challenging, and marvelous. It’s one of the best jobs in the world and one of the hardest. I can’t imagine having done anything else.”
PK Note: during my recovery from bypass surgery this month, I watched season 1 of HBO’s ‘the Pitt’ expecting another over-dramatized snapshot of hospital medicine. This one’s different. The complexities of high-tech emergency medicine in a safety-net setting, the organized chaos of staff responsiveness to unique patient problems and the wear of emotion caregivers experience are depicted well. In my view, this series is worth watching.
Are We All as Miserable as the Doctors on ‘The Pitt’? Medpage January 3, 2026 https://www.medpagetoday.com/opinion/calamities/119222
The Pitt, HBO Max
Levitt on affordability: “Even though government subsidies or employer contributions to health benefits can reduce out-of-pocket premiums for individuals, those costs must be borne by someone. And, as health care costs increase, there is pressure on the government to reduce spending on public health insurance programs and on employers to shift costs to workers. Ultimately, the only way to achieve greater health care affordability systematically is to lower underlying health care costs, and that may be the next big health care reform debate.”
How Unaffordable Is Health Care? JAMA Health Forum January 8, 2026 2026;7;(1):e256929. doi:10.1001/jamahealthforum.2025.6929
STAT’ Herman on CMS transparency: “CMS is the lifeblood of the health care industry. It governs trillions of dollars of payments and subsidies from Medicare, Medicaid, and Affordable Care Act plans. It is the payer that all other payers — health insurers, employers, unions — look to when they try to estimate reasonable prices to pay. It is the conduit that keeps money flowing into America’s hospitals and doctors’ offices. And it increasingly has turned into nothing more than a traffic cone, providing little useful information about how this vital federal bureaucracy is operating.
I spoke with a handful of other health care reporters. The overwhelming consensus was that communication and information from CMS has deteriorated, but also has been bad for a long time…
A CMS spokesperson sent the following statement that could not be attributed to anyone: “CMS rejects the premise that it lacks transparency. The agency provides comprehensive information through formal communications and written responses, and no reporter is entitled to interviews, press calls, or access to internal staff. CMS will continue to engage through established channels that ensure accuracy, consistency, and transparent communication.”
Bob Herman The silence of CMS Stat January 5, 2026 www.statnews.com
Union Health on individual HIT functionality: “Over the next few years, we all need to be tracking a new and highly active front in Health IT innovation and change: The emergence of an “individual access layer” that lets patients control how their data moves across tools and apps—and all the related healthcare industry ecosystem opportunities and risks that come that new infrastructure. I’m talking about a new class of players, known as Individual Access Services (IAS) companies. These companies, backed by fresh capital and reinforced Trusted Exchange Framework and Common Agreement (TEFCA)—an interoperability effort that we’ll dive into later—stepped up information‑blocking enforcement. We’re also seeing rising demand for patient‑authorized data that flows into AI tools and consumer apps, all of which is working to turn patient‑directed exchange into a real market. If/as this real market solidifies, it will have strategic and operational consequences for everyone in the healthcare ecosystem.”
Union Healthcare Insight January 10, 2026 https://www.unionhealthcareinsight.com/post/interoperability-s-next-frontier-the-individual-access-layer
Economy
BLS December 2025 Jobs report: “Both total nonfarm payroll employment (+50,000) and the unemployment rate (4.4%) changed little in December, the U.S. Bureau of Labor Statistics reported today. Employment continued to trend up in food services and drinking places, health care, and social assistance. Retail trade lost jobs.
Total nonfarm payroll employment changed little in December (+50,000). Employment continued to trend up in food services and drinking places, health care, and social assistance. Retail trade lost jobs. Payroll employment rose by 584,000 in 2025 (an average monthly gain of 49,000), less than the increase of 2.0 million in 2024 (an average monthly gain of 168,000).
Employment in food services and drinking places continued to trend up in December (+27,000). Food services and drinking places added an average of 12,000 jobs per month in 2025, similar to the average increase of 11,000 jobs per month in 2024.
Health care employment continued its upward trend in December (+21,000), with a gain of 16,000 jobs in hospitals. Health care employment rose by an average of 34,000 per month in 2025, less than the average monthly gain of 56,000 in 2024.”
Employment Situation Summary – 2025 M13 Results January 9, 2026
Politico on December BLS report: “The U.S. economy added 584,000 jobs in 2025, the slowest annual growth outside of a recession since 2003, reflecting the low-hire, low-fire labor market conditions that have prevailed during the first year of President Donald Trump’s second term.
Employers added 50,000 jobs in December, the Labor Department reported Friday, slightly below expectations, but the unemployment rate ticked down to 4.4%. That’s below the 4.5 % rate reported for November, but joblessness overall has crept up from the 4% rate reported in January 2025, when Trump took office again…
Although the labor market isn’t showing signs of rapid deterioration, the sluggish pace of job growth could further weigh on Americans’ perceptions of the economy, where they are already giving Trump low marks.”
Job growth slowed markedly in Trump’s first year back in office – POLITICO
CNBC on 2026 economic outlook “Like a brilliant football coach’s scripted first drive in a playoff game, Wall Street’s start to 2026 has gone exactly according to plan, the offense in rhythm with a balanced attack resulting in an early lead for the bulls.
Not only is the S&P 500 up 1.7% but the tape has broadened just as nearly every play caller has been demanding, with the equal-weighted S&P ahead by almost twice as much. The insistent consensus call heading into the year for a reacceleration in the real economy — propelled by tax-based stimulus and an administration desperate to “run it hot” — has quickly been reflected in market leadership.
Banks, transportation stocks, hotels and small-caps are cooking, helping to offset the cooling-off in several of the tech heavyweights that had large1ly led the S&P’s three-year, 80% advance.
(The president’s order last week to have the government-sponsored housing-finance companies buy $200 billion in mortgages to help lower home-borrowing rates is not, strictly speaking, quantitative easing. But it’s a leveraged source of price-insensitive demand for loans in a non-stressed market as well as a signal that the administration is intent on stoking demand however possible.)
This crowd-pleasing pro-cyclical broadening pattern has been underway in some form since around Halloween, when the Magnificent 7 and a motley assortment of lower-quality speculative stocks peaked on a relative basis, giving way to a sideways phase for the headline indexes but a catch-up trade in non-tech cyclical and value plays.”
Wall Street’s start to 2026 is going exactly according to plan. Are investors too confident? CNBC January 10, 2026 https://www.cnbc.com/2026/01/10/wall-streets-start-to-2026-is-going-exactly-according-to-plan-are-investors-too-confident.html
Study: Health spending 2009-2019: “National health expenditure growth between 2009 and 2019 slowed to less than half the historical rate of growth seen between 1970 and 2008. To identify why, we gathered actuarial projections of the fiscal effects of policies implemented between 2009 and 2019, netted these out from the 2009 Centers for Medicare and Medicaid Services baseline projections of national health expenditures, and decomposed the residual differences by payer and service to shed light on the spending slowdown. We identified four trends that contributed to spending growth below the baseline projections: declining utilization and substitution of lower-cost alternatives across hospitals, physicians, and pharmaceuticals; slow private hospital and physician price growth and the expanding scope of practice of nonphysicians in office-based settings; declining home health use among the oldest Medicaid beneficiaries; and slow growth in private insurers’ administrative spending. Our results raise questions about several of the assumptions that underlay previous forecasts of future health care spending.”
Anatomy Of A Slowdown: Decomposing The Moderation In Health Spending Growth, 2009–19 Health Affairs January 6, 2026 https://www.healthaffairs.org/journal/hlthaff
Bain on HIT investments: Healthcare IT buyout deal count has steadily increased the last few years as the sector remains attractive to private equity investors. Private equity-backed healthcare IT buyout transactions saw an increase while overall deal value for the sector doubled in 2025. This increase contrasts with other parts of healthcare that saw declines in private equity deal activity.
There were 76 healthcare IT buyout deals in 2025, which accounted for nearly 20% of all transactions in the industry. Four years ago, healthcare IT deals accounted for 15% of all private equity deals in healthcare. There were 71 deals in 2024 and 42 in 2023.
Bain Capital www.baincapital.com January 8, 2026
Walmart launches digital health network: “Walmart launched Better Care Services, a digital network of healthcare providers, and will trim prices on some wellness-related products. The platform offers same-day consultation with third-party providers for urgent care and behavioral health, the company said Thursday. It also has access to LillyDirect, Eli Lilly & Co. digital platform for managing diabetes, obesity, and migraines.
Better Care Services also includes a nutrition hub, which includes personalized food and recipe recommendations powered by artificial intelligence, Walmart said. The Bentonville, Ark., company added that it also is reducing prices on more than 1,000 health-focused goods. The reductions include food, supplements, over-the-counter products and fitness-related items.”
Walmart Launches Digital Healthcare Platform, to Cut Prices on Some Health Items https://www.wsj.com/health/healthcare/walmart-launches-digital-healthcare-platform-to-cut-prices-on-some-health-items
Consumer confidence: “Consumers’ mood improved slightly in January, yet Americans remain mired in anxiety about affordability and sluggish hiring, the University of Michigan’s latest survey indicated.
UMich’s consumer-confidence index landed at 54 in its preliminary January reading, versus 52.9 last month. Economists surveyed by The Wall Street Journal were expecting the index to inch up to 53.4.”
January U of Michigan Consumer Confidence Index https://www.wsj.com/economy/consumers/consumer-sentiment-edges-higher-michigan-survey-finds
Hospitals
Study: NFP hospital compliance with community needs assessment requirement: “In exchange for tax exemptions valued at $37.4 billion, the Patient Protection and Affordable Care Act (ACA) requires all nonprofit hospitals to conduct a triennial community health needs assessment (CHNA) and develop an implementation strategy (IS). As part of these community benefit (CB) activities, hospitals must solicit and account for input from the community in the form of written comments, which may improve hospital investments in population health.
In this nationally representative cross-sectional study of 543 hospitals, 57 (10.5%) were compliant with the Internal Revenue Service requirement to solicit and account for written comments from the community. No significant differences in hospital characteristics were found between compliant and noncompliant hospitals.
Poor hospital compliance with the community input requirement raises questions about whether community benefit activities reflect community perspectives and priorities, indicating a need for improved transparency and accountability in community benefit policies.”
National Compliance With Community Input on Nonprofit Hospital Community Benefit Activities JAMA Network Open January 7, 2026 2026;9;(1):e2551513. doi:10.1001/jamanetworkopen.2025.51513
Progressive Policy Institute Report on Independent Physician Practice (IPP) Acquisition by Hospitals: “A review of 70 economic studies shows that hospital acquisitions of IPPs have myriad adverse effects. This includes higher prices and health care spending and the loss of decision-making autonomy for physicians because of changed corporate financial objectives. The elimination of the IPP as a vital health care delivery model has also reduced access to health care by eliminating an important source of choice for consumers.” Major takeaways:
- There is mounting economic evidence that vertical integration of hospitals and IPPs increases prices and spending.
- The U.S. health care system has sustained a significant decline in IPPs as a result of being acquired by hospitals. These decreases range from 4% to 42% across nine medical specialties. • Hospital acquisitions of physician practices have an outsized impact on rural areas of the U.S. IPPs in rural areas declined by 34%, versus only 22% in urban areas and were the highest in the western Midwest and New England.
- Hospitals focus on acquisitions of larger physician practices in establishing or scaling up their market position in a medical specialty area. Large IPPs decreased by 45% and medium size IPPs declined by 36%.
- Some of the largest health systems in the U.S. are the most active acquirers of physician practices, exacerbating already high levels of concentration in hospital and medical specialty markets
PPI-Hospital-Acquisitions-Dec2025.pdf
Study: Hospital price increases for commercial vs. Medicare payments: “Between the second quarters of 2022 and 2025, prices paid by commercial payers to California hospitals rose in 9 of 12 quarters, with four quarters showing increases exceeding $1,300 per discharge relative to the preceding quarter. Over the full period, the cumulative increase in commercial prices totaled $6,934 per discharge, compared with a substantially smaller cumulative increase of $2,042 per discharge for Medicare. Although the data do not permit adjustment for potential differences in case-mix trends between commercial and Medicare patients, average length of stay changed very little for either group over this period (Medicare: 6.1 versus 5.9 days; Commercial: 4.9 versus. 5.0), suggesting that differential shifts in inpatient acuity are unlikely to fully explain the observed divergence in prices.
The post-COVID surge in California commercial hospital prices also outpaced general inflation. Between the second quarters of 2022 and 2025, the Consumer Price Index rose by 9.9%, while our calculations show that commercial hospital prices per discharge increased 18% and Medicare payments per discharge grew 9.6%…
Taken together, the emerging post-COVID pattern of rapid commercial price growth, lags in data availability, and rising public affordability concerns highlight the urgency of modernizing health care data infrastructure so that policymakers can respond to and effectively manage health care affordability.”
Hospital Prices Post-COVID-19: Troubling Trends from California Health Affairs January 8, 2026 https://www.healthaffairs.org/content/forefront/hospital-prices-post-covid-19-troubling-trends-california
Insurers
Arnold Ventures Report on Medicare Advantage in 2026: The brief from the Actuarial Research Corporation examined the Medicare Advantage (MA) landscape in 2026 in the context of longer-term trends. Highlights:
- “The Medicare Advantage (MA) market remains healthy in 2026, with a range of competitive plan offerings available to over 99% of Medicare-eligible individuals across most geographies. The average beneficiary has access to 31 zero-premium MA plans in 2026, up 37% from 2022 and 176% from 2019, though down 9% from 2025.
- The availability of special needs plans (SNPs) continues to grow. The average beneficiary has access to 15 Dual Eligible SNPs (D-SNPs) and 7 Chronic Condition SNPs (C-SNPs) in 2026, representing cumulative growth of 153% and 259%, respectively, since 2019.
- After several years of rapid supplemental benefit expansion, benefit changes among MA non-SNPs from 2025 to 2026 are mixed. Specialty care copays are increasing by an average of 10%, while primary care copays and deductibles remain flat.
- We estimate that per-beneficiary federal funding for MA will increase by 8.5% in 2026, following a 2.4% increase in 2025 and a 4.5% increase in 2024…
- In rural areas, the availability of MA plans has generally grown more rapidly than non-rural areas over several years…reductions in MA plan options in 2026 are meaningful, with approximately 165,000 beneficiaries losing access to any MA plan
Medicare Advantage in 2026: Putting Changes in… | Arnold Ventures
Population Health
CMS Rural health awards for 2026: “State awards for 2026, the first of five years, average $200 million, ranging from $147 million in New Jersey to $281 million in Texas. Differences in total awards across states in the first year (and most likely in future years) are modest relative to large differences in rural populations and rural health needs more generally…
Texas, Alaska and California are receiving the largest total awards in the first year. While Texas and California have the largest and fourth-largest rural populations in the country, respectively, Alaska has the fifth smallest rural population. Alaska likely received a relatively large award at least in part because a portion of the fund was distributed to the five largest states based on land area. New Jersey, Connecticut, and Rhode Island are receiving the smallest awards in the first year. These are all states with relatively small rural populations.”
STAT study re: childhood vaccination comparison: “The U.S. childhood vaccination schedule has been dramatically reduced, purportedly because, as federal health officials argued, the now-discarded schedule recommended children get far more vaccines than kids in “peer countries.”
But did it really? And has reducing the number of diseases all children are advised to be vaccinated against to 11 from 18 brought the United States in line with most other affluent countries?
A STAT analysis of vaccine recommendations in the United States and 37 other countries suggests that while the former U.S. schedule did aim to avert more diseases than the schedules of many other countries, it did so by only a few more diseases than in multiple other nations in Europe, the Middle East, Asia, and Australasia. (The analysis drew the information from a World Health Organization database, which is based on information the WHO receives from its member countries; in the case of Taiwan, information was drawn from its department of health website.)
When it comes to vaccine schedules, the U.S. is now the outlier STAT News January 9, 2026 https://www.statnews.com/2026/01/09/childhood-vaccination-fact-check-denmark-not-america-is-the-outlier
Metanalysis: Weight again after cessation of medications: Researchers analyzed the rate of weight regain after cessation of weight management medications (WMMs) in adults with overweight or obesity using metanalysis. Results:
Of the 9288 titles screened, 37 studies (63 intervention arms, 9341 participants) were included. Average treatment duration was 39 (range 11-176) weeks, with average follow-up of 32 (4-104) weeks. The average monthly rate of weight regain was 0.4 kg (95% confidence interval (CI) 0.3 to 0.5) (mixed model 0.3 kg (0.2 to 0.4) monthly v control in RCTs). All cardiometabolic markers were projected to return to baseline within 1.4 years after the cessation of WMM. Weight regain was faster after WMM than after BWMP (by 0.3 kg (0.22 to 0.34) monthly), independent of initial weight loss. Estimates and precision were robust in sensitivity analyses.
This review found that cessation of WMM is followed by rapid weight regain and reversal of beneficial effects on cardiometabolic markers. Regain after WMM was faster than after BWMP. These findings suggest caution in short term use of these drugs without a more comprehensive approach to weight management
Weight regain after cessation of medication for weight management: systematic review and meta-analysis BMJ 2026; 392 doi: https://doi.org/10.1136/bmj-2025-085304 (Published 07 January 2026)Cite this as: BMJ 2026;392:e085304
Study: Out of pocket costs in chronic care: Researchers analyzed the relative incidence, magnitude, and determinants of cost-sharing for preventive care among individuals with chronic conditions compared with individuals without such conditions. Findings:
“These findings suggest that patients with chronic conditions were more likely to experience cost-sharing for preventive care and had greater expected spending overall. Standardizing insurer practices regarding cost-sharing exemptions can improve equitable access to high-value preventive care.”
Role of Chronic Conditions in Out-of-Pocket Costs for Preventive Care in the US JAMA Network Open January 8, 2026 2026;9;(1):e2553157. doi:10.1001/jamanetworkopen.2025.53157
Prescription Drugs
Amazon dispensing weight loss drugs: “Amazon Pharmacy has started offering Novo Nordisk’s Wegovy weight-loss pill, joining other pharmacies in selling the recently approved tablet poised to shake up the GLP-1 market.
Customers with commercial insurance will pay a minimum of $25 for a one-month supply, while the cost for those without insurance starts at $149 a month, Amazon said.
As part of deals struck with the Trump administration late last year, Novo Nordisk and Eli Lilly agreed to make their weight-loss pills available for direct-to-consumer purchase at starting doses of $149 a month. The Food and Drug Administration has granted special new vouchers to Lilly and Novo Nordisk intended to speed up the agency’s review of the weight-loss pills
Amazon Pharmacy Begins Offering Wegovy Pill WSJ January 8, 2026 https://www.wsj.com/health/pharma/amazon-pharmacy-begins-offering-wegovy-pill-
