Every 20 years or so, healthcare industry leaders, academics and policy wonks happen on a solution to escalating healthcare spending. Since prospective payments replaced fee-for-service markups in the 80s, the system has tried pay-for-performance, value-based purchasing, price transparency and accountable care…and none have systematically bent the cost curve downward. Defenders of the health economy rightly point to increased utilization and labor costs, but critics blame opaque business practices and organized cartels for unnecessary costs.
Per the National Health Expenditures Survey, since 1980:
Total U.S. per capita health spending has increased 6.5% per year since 1980 versus a 3.5% annual increase in wages, 2.5% annual increase in the GDP and 0.9% annual increase in the total population. Per the CMS Office of the Actuary, health spending will increase 5.4% annually thru 2034 outpacing the projected 4.1% GDP annual growth and hiking healthcare from 18% of the total GDP today to 20.6% then.
Thus, for almost 50 years, the health economy has grown faster than any other segment in the U.S. economy for reasons not explained by increased utilization alone. Studies show labor costs, hospital and drug prices, regulatory compliance and other factors account for its over-sized impact on the entire economy.
Policy makers, elected officials and economists recognize the conundrum: the U.S. healthcare industry stands out for job growth (three times faster than any other industry in the last 12 months), modern facilities and clinical innovations, but it’s costly. Per capita healthcare spending in the U.S. is 160% higher than the OECD average. ($15,843 vs. $6100) where outcomes are comparable. And in election season, healthcare affordability is a major concern to mid-term voters.
Politicians avoid going deep on solutions to the healthcare spending spiral. Their websites feature carefully crafted promises to rein in costs and make healthcare affordable by lowering prices for prescription drugs and breaking up hospital and insurer monopolies. Some propose universal coverage via a public option and a few see Medicare for All as the answer—none with price tag. Others claim de-regulation of the industry and price transparency will move the needle, also without cost estimates or timing. And all promise to ‘protect Medicare’ and eliminate waste, fraud and abuse in Medicaid in the process.
I have made my career studying the U.S. healthcare industry’s evolution and how it compares and contrasts with other developed systems in the world. The landmarks along the way that have produced our U.S. health system are two major legislative feats and one unforeseen Black Swan event:
- In 1965, the Johnson administration passed amendments to the Social Security Act adding Medicare (Title XVIII) that guaranteed coverage for Americans 65+ and, later, the disabled and Medicaid (Title XIX) that created a joint federal–state program for low‑income individuals.
- In 2010, the Obama administration passed the Patient Protection and Affordable Care Act that expanded Medicaid and private insurance coverage for lower income American’s and introduced alternative payment models into Medicare to transition its incentives from volume to value.
- In 2020-2021, in the Trump administration, the Covid pandemic hit the U.S. system killing 1.1 million and dividing the country over vaccine policies and trust in science. and temporarily suspending public concern about health system costs. Six major pieces of legislation including the Care Act (March 2020), Consolidated Appropriations Act (April 2020) and American Rescue Plan pumped more than a trillion into the health economy. At that point, pretense of “health cost containment” was suspended and private investment in healthcare doubled down on consolidation in capital starved sectors.
That’s where we are today.
The health economy is a juggernaut politicians fear and private investors protect, especially when suspicion of an economic slowdown is high. Healthcare is not understood by most elected officials and the vast majority of voters. It’s not affordable for low and middle income households and it’s prone to self-flattery.
The default responsibility for health system transformation will likely fall on states for two reasons:
- States must balance their books and rationalize funding between healthcare, education, social services, transformation and other priorities. Healthcare is a state’s biggest expense accounting for up to 35% of total spending.
- States benefit directly from a health system that’s effective and affordable: it supports population growth and economic development. Along with education and housing, healthcare is a major factor in community health and wellbeing.
Might a state develop a universal coverage for primary and preventive health that reduces demand for unnecessary specialty services? Might a state structure its public and private employer benefits around provider risk sharing arrangements? Might a state make hospital, insurer and drug price transparency compliance really matter? Might a state set specific parameters for charity care, executive compensation, community benefits and private equity ownership for hospitals? Might a state require more strict enforcement of program integrity laws in healthcare? Might a state suspend individual insurer prior authorizations and enact a unform state standard? Might a state break-up monopoly among hospitals, insurers and PBMs? Might a state enact health system transformation as the cornerstone of its future economic development and growth? These could happen.
In 22 days, the mid-term election ends and Campaign 2028 officially starts. Regardless of the composition of the 120th Congress in January, healthcare will be on its agenda. Substantive change in the direction of federal healthcare policies is unlikely but in states, it’s game on.
Will total healthcare spending change in the 120th Congress? Not much, but how and where its spent will, and states will likely lead the way.
Paul
Sections in today’s report:
- Quotables
- Economy
- Hospitals
- Insurers
- Population Health
- Prescription Drugs
Quotables
White House statement on $90 Part B payment to seniors: “Today, President Donald J. Trump announced that the federal government will be making one-time payments of $90 per person to help more than 20 million enrollees pay for their Medicare Part B premiums.
Payments will be made from the Medicare Improvement Fund, which has been given $2 billion by Congress for the purposes of making improvements to the Medicare fee-for-service program, but has never before been utilized…
Established in 2008, no Administration has ever utilized or made payments from the Medicare Improvement Fund.
Previous Congresses used the Medicare Improvement Fund in ways that increased healthcare costs for the American people, such as when Democrats raided $20.7 billion from the fund as part of the Unaffordable Care Act, also known as Obamacare.
President Trump believes that Medicare Improvement Funds should be used to directly help people on Medicare, not special interests, and is returning healthcare dollars back into the hands of the American people to benefit them and their individual healthcare needs. “
Fact Sheet: President Donald J. Trump Announces Medicare Improvement Fund Payments for Seniorhttps://www.whitehouse.gov/fact-sheets/2026/10/fact-sheet-president-donald-j-trump-announces-medicare-improvement-fund-payments-for-seniors/
Pitchbook on Investments in Healthcare: “Although exits have begun to recover modestly, the industry is now contending with a sizable backlog of aging assets—many held for five years or longer, and some well beyond their typical holding periods—with no clear path to an attractive exit. The scale of that backlog is significant, with GPs in the US alone sitting on more than $860 billion in net asset value (NAV) across buyout funds that are more than seven years old. This gradual zombification of a portion of the portfolio universe is emerging as a meaningful challenge for sponsors and their investors alike, weighing on liquidity, returns, and fundraising momentum.
Healthcare rounds out the picture with 311 companies in the six- to eight-year bucket and 95 in the nine- to 11-year range. This cohort faces reimbursement pressure, regulatory scrutiny, and elevated staffing costs that have compressed margins in ways that were difficult to anticipate at acquisition. For a sector that attracted significant PE capital from 2018 to 2022 on the strength of demographic tailwinds and perceived defensibility, the operational reality has proven more challenging than the underwriting assumed.”
Private Equity’s Zombie Problem https://pitchbook.brightspotcdn.com/80/26/0e9d81be448ca4ea974fd7de5b80/q3-2026-private-equitys-zombie-problem.pdf
NEJM on older adult screening inadequacy: “Integration of HRSN (health related social needs) screening into clinical care represents an important advance. But current one-size-fits-all approaches are unlikely to capture the diversity of needs among older adults, in particular. Without targeted, age-appropriate screening tools, needs will be misidentified, resources will be used inefficiently, and opportunities to improve people’s health and well-being will be missed. As the U.S. population ages, we believe HRSN measurement must evolve to reflect the substantial variation in older adults’ physical and mental health, cognitive functioning, and care and residential contexts to enable equitable, patient-centered care.”
U of M October Sentiment: “The University of Michigan’s consumer sentiment index fell to 46.3 in early October 2026, according to the preliminary estimate, its lowest level since May’s record low and well below market expectations of 47.6. The current economic conditions subindex plunged to an all-time low of 44.7, as buying conditions for durable goods deteriorated sharply amid persistently high prices and borrowing costs. Lower-income consumers and households with smaller stock portfolios recorded particularly steep declines, reflecting their limited capacity to absorb further price increases. Frustration over the cost of living continues to mount, with consumers across the political spectrum increasingly perceiving a deterioration in the economic outlook since the beginning of the year. Meanwhile, inflation expectations edged higher, with year-ahead expectations rising to 4.7% from 4.6% in September, while long-run inflation expectations increased to 3.5% from 3.4%.”
PK Note: September’s reading was down 15% from January, and just above a record low reached in May. High prices for food, fuel, housing and healthcare are to blame. January 2024 Index: 100.
United States Michigan Consumer Sentiment October 2026 https://tradingeconomics.com/united-states/consumer-confidence
MSN on economy: “This has been a history-packed year for Wall Street. The Dow Jones Industrial Average (DJINDICES:^DJI), S&P 500 (SNPINDEX:^GSPC), and Nasdaq Composite (NASDAQINDEX:^IXIC) have all catapulted to several new highs, and Fed Chair Kevin Warsh was sworn in as only the 17th head of the Fed on May 22.
But the most game-changing event of them all might be Warsh and the Federal Open Market Committee (FOMC) kicking off only the fourth interest rate-hiking cycle of the 21st century on Sept. 16. Fed Chair Warsh and 11 other FOMC colleagues voted unanimously (12-0) to raise the federal funds target rate by 25 basis points to 3.75%-4.00%.”
KFF on healthcare affordability in elections: “…voters’ concerns about health care costs are having a moment, and will continue to do so through 2028, because voters see them as a dimension of their worries about the cost of living, which is their dominant concern right now.
When we ask voters what their top financial worry is in our latest poll, health costs are tied with the cost of gas at the top of the list, and ahead of the cost of food, utilities, rent or mortgage. When you step back a bit from the rankings, you can see that all five of these worries are closely clumped together…
Note that the costs voters care about are their own health care bills, not national health spending, or employer premiums, or value, or federal or state health spending.”
A Guide to the Role of Health in the Midterms | KFF
HDM on interoperability: “For years, healthcare interoperability was largely measured by a straightforward question: Can the data move? Could one organization send a clinical document to another, could an electronic health record expose information through an application programming interface, and could a network locate a patient’s record outside its own walls? Those were necessary questions, and the progress that came from answering them created the foundation we have today.
But moving data was never the ultimate goal. The goal was to help someone make a better decision, reduce unnecessary work or help a patient receive care without avoidable delay…
What feels different now is that three conditions are converging. The technical foundation is more mature, government and private-sector participants are increasingly working through shared use cases, and the patient is becoming a more explicit organizing principle for exchange. That does not mean the difficult work is finished; it means healthcare has a better opportunity to move from data exchange to data utility.”
Why healthcare’s interoperability moment feels different Health Data Management October 8, 2026 hdmgroup-1.hubspotpagebuilder.com/hdm-onestory-why-healthcares-interoperability-moment-feels-different?ecid=ACsprvvxSrI3-
HIPAA importance in framing emergent issues: “HIPAA is landmark legislation on three counts: It opened the door to consistent rules, protections, and safeguards for private health insurance; armed prosecutors against health care fraud; and seeded the savings accounts millions of families now use to pay for care. But no law is the final chapter of any health care debate.
Today, AI is transforming how medical data are collected, shared, and used. Initiatives by policy makers to ensure such data are safely and appropriately used will no doubt be built on ground HIPAA staked out three decades ago. Notwithstanding, the law is showing its age in ways Congress must confront…if Congress is serious about securing health care affordability in the private sector, it will turn to this law again, as the newly announced antifraud legislation demonstrates. If a divided Washington can forge compromise in 1996 on comparably complex issues, it can find common ground again. It is time to give the three-decades-old law its due, for the foundation it laid, the precedent it set, and the tools it provides for the reforms still to come.
New Fraud Division Flexes Might in Latest Enforcement Policy – Law360
Key Exchange: Maine Collins-Jackson Senate Debate October 6: Jackson: “(Collins) has been a government employee her entire life, she’s always had healthcare, she’s always had a steady income coming in. That’s not the way it is for most of us; healthcare is a real challenge and she’s made it worse by advancing the ‘Big Beautiful Bill.’ That is what Senator Collins wants to keep going: big health insurance, Big Pharma. They can make all the money, it’s about greed.”
Collins: “First of all, I have not been insured my whole life. I spent a year, when I was running for governor in 1994, where I could not afford health insurance. So Troy, you’re just out-and-out wrong on that.”
PK Note: Public reaction toward Collins’ comment was negative as viewers dismissed her token uninsured experience.”
Must-Win Republican Senator Susan Collins Roasted for Bonkers Debate Answer
NYT October 9 on disenrollment, premium spikes in Medicare: “Millions of people with private Medicare coverage are being forced to change their insurance for 2027 and will pay higher prices for prescriptions and medical care, prompting some experts to warn that more older Americans will face greater financial hardship.
Major insurers, like UnitedHealth, Centene and state Blue Cross plans, have shuttered plans that they viewed as unprofitable in certain markets, leaving some people with fewer choices of policies, and even more limited choices of doctors in 2027…
Overall, as open enrollment begins this month, roughly five million people will be forced to switch plans because their current policy has been canceled or is no longer offered in the county where they live…”
Economy
US Health spending in context of comparative countries: “US health care spending growth has long outpaced economic growth. However, during the period 2014–19 (before the COVID-19 pandemic), growth in per capita health care spending relative to per capita gross domestic product growth fell by 21% compared with 2007–14. We examined spending growth domestically and internationally to determine the causes of this slowdown. We decomposed spending growth by source of funds, compared four drivers of growth over time within the US and relative to fifteen Organization for Economic Cooperation and Development countries, and conducted a US-specific breakdown of utilization. We found that declining growth in health care prices and utilization were major drivers of the slowdown of health care spending. Slower growth did not appear to have been driven by across-the-board reductions in disease burden and input costs, although certain metrics fell. Utilization reduction was a major driver through technology allowing the use of alternative sites of care; greater use of preventive care that reduces costs; ongoing expansion of Medicare Advantage, managed Medicaid, and high-deductible health plans; and increased utilization management. This slowdown suggests the need to monitor trends more closely for signs of additional major shifts in spending growth.”
PK Note: This study is particularly useful to advancing deeper analysis into drivers of health spending in a broader context of comparative westernized health systems (OECD). Social factors in other countries, incentives built into each system’s mechanisms for payments to providers, drug makers and facility operators, and the roles of private investments (vs. public funding) need consideration as well as condition-specific and demographically-discreet cohorts. It’s necessary to the public’s understanding of spending and policymakers’ assessment of future direction.
CBO FY26 Deficit Report: The Congressional Budget Office estimated the federal budget deficit at $1.993 trillion for fiscal year 2026, which ended September 30 — the widest gap since 2021 and $218 billion more than the fiscal 2025 deficit. Highlights:
- Federal spending totaled $7.4 trillion for the year, a 6% increase, while the government took in $5.4 trillion in revenue, a gain of 3%.
- The deficit also exceeded 6% of gross domestic product, up from 5.8% in fiscal 2025. Budget experts expect the publicly held debt, which surpassed $40 trillion in August.
- Net interest on the public debt rose $115 billion, or 11%, reaching $1.143 trillion.
- Spending on the three largest mandatory programs also rose sharply. Social Security outlays grew $86 billion, or 5%, to $1.654 trillion, driven by more beneficiaries and higher average benefits. Medicare spending increased $77 billion, or 8%, to $1.069 trillion, and Medicaid outlays rose $55 billion, or 8%, to $723 billion.
- Corporate income tax revenue fell $70 billion, or 16%, to $382 billion, as the 2025 reconciliation act allowed companies to take larger deductions for certain investments, including research and development costs and manufacturing facilities. Individual income and payroll taxes rose $255 billion, or 6%, partially offsetting those declines, as wages and salaries grew and non-withheld tax payments increased.
U.S. federal budget deficit hits $2 trillion in fiscal year 2026
RWJF Analysis: Household medical debt:
- 27% of US adults reported that they or their family members owed medical debt in 2025, including 26% of adults with health insurance.
- 54% reported their families owed at least $1,000, and 16% owed $5,000 or more.
- 35% said they or a family member had been contacted by a collection agency about unpaid medical bills in the past year.
- Adults with low incomes, those with a disability or in fair or poor health, and those ages 45 to 54 were more likely to have medical debt.
How Does Medical Debt Affect U.S. Families? RWJF October 6, 2026 https://www.rwjf.org/en/insights/our-research/2026/10/how-does-medical-debt-affect-us-families.html
The Federal Reserve Bank of New York: September 2026 Survey of Consumer Expectations: Highlights:
- Americans’ one-year inflation expectations climbed to 3.9%, a rise of 0.3 percentage point from August and the highest reading since May 2023. The three-year horizon ticked up by 0.1 percentage point to 3.3%, and the five-year figure remained flat at 3.0%.
- Median year-ahead expected price changes rose to 4.8% for gas, 5.5% for food, and 9.2% for medical care. Expected rent increases reached 6.8%, while anticipated college education costs jumped 1.4 percentage points to 7.5%.
- Household finances sent mixed signals. Perceptions of credit access deteriorated, with a larger net share of households saying it is harder to obtain credit than a year ago. Perceptions and expectations about households’ overall financial situations also worsened, with larger shares reporting and anticipating a worse financial position. By contrast, the average perceived probability of missing a minimum debt payment over the next three months fell 1.0 percentage point to 12.2%, dropping below its 12-month trailing average.
NY Fed: Americans’ 1-year inflation expectations hit 3-year high
NYT on consumer value purchasing: “More shoppers like Eleni now judge a garment by what it’s made of, and more of their clothing money goes to used clothes. U.S. secondhand clothing sales grew nearly four times as fast as new clothing sales last year, according to resale company ThredUp’s 2026 resale report. Shoppers now spend about a third of their clothing budget on used pieces, and for the most devoted of them, the fabric is the draw. In a March survey of nearly 200 heavy secondhand shoppers by resale newsletter pre-loved, more than half named the quality and craftsmanship of vintage pieces as their top reason for buying them.
New clothes are getting more expensive without getting any better. U.S. clothing prices rose 3.6% in the year through August, a bit faster than prices overall, according to the Bureau of Labor Statistics. Shoppers are paying those higher prices as the world’s fiber supply tilts toward synthetics, which lack breathability, trap smells, and often shed over time. Synthetic fibers, led by polyester, made up 69% of all the fiber produced worldwide in 2024, according to Textile Exchange, which publishes a yearly count of the world’s fiber production. Shoppers who read fiber labels and hold new pieces up against older versions from the same brands notice the difference in quality.”
Shoppers buy secondhand clothes as new ones switch to polyester
Hospitals
Study: Hospital-insurer “brinksmanship”: “Hospital prices for Americans with commercial health insurance are determined through thousands of negotiations between hospitals and insurers. Threats of network departicipation (brinkmanship) in these negotiations may help parties secure more favorable terms. We studied 14,918 relationships between 3,772 unique hospitals and 92 unique in-market insurers to better understand the relationships among organizational characteristics (including market conditions), public brinkmanship, and departicipation. We documented 1,249 episodes of public brinkmanship, corresponding to about 8% of hospital-insurer relationships, for contracts ending between August 2021 and July 2025. About 28% of these public threats culminated in withdrawal. Profitable hospitals, for-profit hospitals, and hospitals commanding relatively high prices were most likely to engage in public brinkmanship; national insurers were more likely to engage in brinkmanship than single-state or regional insurers. We observed brinkmanship in about 16% of relationships where the hospital system and insurer each controlled roughly 25–45% and 30–45% of local beds and commercial lives, respectively. Our findings emphasize the importance of local contexts in shaping hospital-insurer relationships. Policy makers should assess the effectiveness of aggressive negotiations as a means to control costs and the impact of brinkmanship and departicipation on consumers’ access and experiences.”
Real-World Brinkmanship In Hospital-Insurer Negotiations | Health Affairs
Lown on hospital system growth: “In the year 2000, fewer than half of hospitals belonged to systems. Today, it’s nearly 70%. That level of industry consolidation can raise red flags for patients and policymakers, because areas with more concentrated hospital systems are associated with higher prices but not with better quality of care. ..
The 10 largest hospital systems are massive, accounting for 19% of hospital beds and 25% of hospital profits in the U.S. But they’re not the fastest-growing systems; most of them have shed inpatient facilities over the past few years, leading the shift from inpatient to outpatient care. Key facts about the largest hospital systems:
- They are massive. These ten systems collectively own 695 hospitals and over 126,000 beds. That’s about 16% of general hospitals and nearly 20% of beds in the country.
- HCA stands out at the top. At 150 hospitals, over 38,000 beds and $16.5 billion in hospital net income, HCA is the runaway leader in size and hospital profits. HCA’s hospital net income exceeds that of the other nine largest systems combined.
- They are multi-state. All of these systems operate in five or more states, and six of these systems operate in more than ten states.
- They are financially profitable. Out of 357 systems, just the top ten took in $214 B in net patient revenue and made $29 B in profits in 2024 (about 16% of revenue and 25% of profits for all hospitals in the data set). Only Providence showed a net loss.
- Ownership type varies. Five of the ten largest systems are non-profits, and four are for-profits. “
Harvard Study: hospital closures: Researchers analyzed data from the American Hospital Association annual survey, characterizing hospital closures and openings occurring from 2010 to 2025. Findings:
- Hospital closures increased by 4% year over year, and openings decreased 3% year over year, with 432 hospitals closing and 216 opening. The result was a net loss of 216 hospitals and more than 24,000 beds.
- There was no significant difference between rural and urban hospital closure rates.
- The researchers also observed that the hospitals that more often closed were for-profit, small, and safety-net, and those in the most socially vulnerable counties—in both rural and urban areas. Safety-net hospitals and those serving a high number of Medicaid patients rarely opened.
Hospital closures on the rise in both rural and urban areas—particularly among safety-net hospitals October 8, 2026 https://hsph.harvard.edu/news/hospital-closures-on-the-rise-in-both-rural-and-urban-areas-particularly-among-safety-net-hospitals/
Study: rural hospital closures and mortality rates: “In the sample of 175 counties (71 treated and 104 control counties in the adjacent-county design and 53 treated and 122 control counties in the HSA treatment design), 14 rural hospitals (approximately 8% of rural hospitals in Texas) closed during the study period. Closures were associated with 12 additional annual time-sensitive deaths per 100 000 residents in an affected county (adjacent-county treatment: average treatment effect on the treated. This represented a 5.4% increase compared with the baseline mortality rate in affected counties. Estimates were robust to several sensitivity analyses. Supplementary analyses suggested that mortality associations were concentrated in acute emergencies, persisting under an alternate definition of time-sensitive conditions per 100 000 residents) but not under a broader definition per 100 000 residents).
In this cohort study, rural hospital closures in Texas were associated with increased population-level mortality from time-sensitive conditions. The findings suggest that there were adverse patient outcomes in the aftermath of rural hospital closures, emphasizing a need to manage the emergency response and the progressive deterioration of clinical infrastructure and patient health.”
Paragon analysis: Medicaid State-Directed Hospital Payments: “Our new Paragon PIC finds that rural providers accounted for a very small share of scheduled payments under two major hospital programs in Texas and Arizona in 2025.
Using a common federal definition of rural hospitals, our analysis finds that rural providers accounted for just 3.2% of the $6.05 billion in scheduled payments under Texas’s statewide hospital payment program and 8.3% of the $3.03 billion under Arizona’s major hospital payment initiative. In both programs, more than 90 percent of the scheduled dollars went to non-rural hospitals.”
In 2025, Over 90% of SDP Spending in TX and AZ Scheduled for Non-Rural Hospitals https://paragoninstitute.org/paragon-pic/in-2025-over-90-of-sdp-spending-in-tx-and-az-scheduled-for-non-rural-hospitals/
Study: Site neutral payment model comparisons: The purpose of the study was to quantify Medicare payments and savings under 2 approaches of setting site-neutral payment rates for HOPDs: (1) a fixed discount that pays 40% of the OPPS rate, or (2) applicable Physician Fee Schedule (PFS) rates for practice expenses inclusive of packaged services. Findings:
Savings were calculated for 57 APC groups in 23 categories. Across all 57 APCs, combined savings relative to current Medicare OPPS rates would total 58.7% at PFS rates vs 60.0% at the discounted OPPS rate. Across the 23 APC categories examined, 13 had PFS-equivalent payments below the discounted OPPS payments, whereas 10 categories had PFS payments above the discounted OPPS payments.
Insurers
Study: Provider sponsored health plan price negotiations: “Although hospitals and insurers have traditionally operated as separate organizations, an increasing number of health systems have begun offering vertically integrated insurance plans, known as provider-sponsored health plans. We examined differences in negotiated prices for forty-six mandatory reported health care services between provider-sponsored health plans and nonintegrated insurance plans, using hospital price transparency data. Of the 639 health systems in the United States in 2023, 179 (28.0%) offered an insurance plan, most often Medicare Advantage plans. Across health care services, forty-four of forty-six had negotiated prices that were significantly lower for provider-sponsored health plans compared with those for nonintegrated insurance plans. These findings offer evidence that provider-sponsored health plans negotiate health care prices with their health systems differently than nonintegrated insurers do, but greater transparency in pricing and ownership is essential to fully assess the risks and benefits that provider-sponsored health plans may have for health care prices.”
Farrah report on health insurer market trends: Per the Sept. 29 analysis by Mark Farrah Associates, which draws on statutory financial filings with the National Association of Insurance Commissioners, CMS and state agencies.
- Health insurers’ membership declined 2.8% year-over-year to about 312.5 million people in the first half of 2026, as losses in the individual market and Medicaid outpaced gains in Medicare Advantage and employer-based plans.
- Individual market enrollment fell 17.2% to 22 million from 26.5 million, the steepest decline of any segment. MFA attributed the drop primarily to the expiration of enhanced federal subsidies at the end of 2025.
- Medicaid enrollment across managed care and fee-for-service programs fell 5.3% to 73 million, a loss of about 4.1 million beneficiaries.
- Employer group risk enrollment, which includes the federal employee health plan, fell 4.3% to about 46.7 million.
- Medicare Advantage enrollment grew 2% to about 35.1 million, an increase of 700,000 members. About 52% of the 70.2 million people eligible for Medicare are now enrolled in a Medicare Advantage plan.
- Self-funded employer plans under ASO contracts added more than 1.1 million members, growing 0.8% to about 135.8 million and accounting for 43.5% of total national enrollment.
CMS Final rule on plan price transparency: “Based on internal assessment and external stakeholder feedback received since implementation began, the Departments have identified three main barriers to fully achieving the goals of the 2020 final rules: inaccessibility due to the large size of the machine-readable files, data ambiguity due to lack of contextual information alongside the raw data, and areas of misalignment with the Hospital Price Transparency rule that make comparing data across disclosures challenging. Highlights: requires plans to…
- report in-network rates by provider network, rather than duplicating the same information for each individual plan, and to exclude rates for services inconsistent with a provider’s specialty.
- provide more contextual information and use more standardized reporting.
- make pricing files easier to locate online.
- attest that their pricing data are true, accurate, and complete and identify a responsible senior official.
Transparency in Coverage Final Rules (CMS 9882-F)October 5, 2926 https://www.cms.gov/newsroom/fact-sheets/transparency-coverage-final-rules-cms-9882-f
Michigan AG sues Blue Cross Blue Shield of MI: Thursday, the Michigan attorney general filed an antitrust suit against Blue Cross Blue Shield of Michigan, alleging the insurer unlawfully overcharged the state employees’ medical benefit plan by conspiring with other Blue Cross Blue Shield carriers to divvy up markets. Blue Cross Blue Shield of Michigan, which also owns Blue Cross and Blue Shield of Vermont, is the largest insurer in the state.
The lawsuit, which alleges violations of federal and state antitrust statutes, strikes a similar tone to other cases against Blue Cross Blue Shield carriers dating back to 2012. A federal judge approved the Blue Cross Blue Shield Association’s $2.8 billion agreement with more than 3 million healthcare providers last year, but some providers opted out of the agreement.
Collectively, the Blue Cross Blue Shield Association consists of 33 regional member companies.
AG Nessel Sues Blue Cross Blue Shield for Illegal Health Insurance Monopoly in Michigan https://www.michigan.gov/ag/news/press-releases/2026/10/08/ag-nessel-sues-blue-cross-blue-shield-for-illegal-health-insurance-monopoly-in-michigan
Population Health
Commentary on exercise oncology: “Observational research has long suggested that exercise improves cancer survival, particularly for breast cancer patients. Last year, a landmark randomized controlled trial showed that colon cancer patients who participated in a structured exercise program with a trainer-coach over three years were less likely to see their cancers come back and had a better quality of life. Among those in the program, 90% were alive after eight years, compared with 83% in the control group.”
It Can Keep Cancer in Remission. Why Is No One Talking About It? – The New York Times
Annenberg on vaccine policy: “The number of measles cases in the United States is at the highest level in decades, attributed to a decrease in vaccination against measles. And while U.S. Health and Human Services Secretary Robert F. Kennedy Jr. told American parents on Aug. 2 that they should get their children vaccinated against measles, the public remains evenly divided on whether or not he recommends the MMR (measles, mumps, and rubella) vaccine.
According to the latest nationally representative survey from the Annenberg Public Policy Center (APPC) of the University of Pennsylvania, conducted Aug. 4-17, 2026, among more than 1,900 U.S. adults, the proportion of adults who say Kennedy recommends that children be vaccinated against measles is just under a third, at 31%. While this represents a significant increase since August 2025, when 23% of Americans thought he recommended measles vaccination for children, most people either still think that Kennedy does not recommend the vaccine (29%) or are unsure whether or not he recommends it (40%). The public is evenly divided between those who think Kennedy does (31%) or does not (29%) recommend the vaccine.”
About 1 in 3 Americans Say RFK Jr. Recommends Measles Vaccine Annenberg https://www.annenbergpublicpolicycenter.org/about-1-in-3-americans-say-rfk-jr-recommends-measles-vaccine/
Study: PBMs and Opioid Use: “This study of 23 pharmaceutical industry documents dated from 1997 to 2018 identified 3 major themes in the coordinated activities of opioid manufacturers and PBMs: (1) both manufacturers and PBMs encouraged health care professionals to increase opioid prescribing, (2) PBMs expanded the allowed doses and durations of opioid prescriptions, and (3) opioid manufacturers paid PBMs when dispensing of branded opioids increased.
These findings suggest that PBMs and opioid manufacturers had undisclosed financial relationships that may have exacerbated the opioid crisis. Regulatory restrictions on these relationships, including the elimination of rebates, could increase transparency and reduce the risks of public health harm due to misuse of addictive medications.”
Prescription Drugs
Pharmacist Survey on cash-pay for GLP-1s: Per the Buzz Health survey of 256 U.S. pharmacists conducted in July 2026. Highlights:
- 68% of pharmacists say cash-pay GLP-1 transactions have increased in the past 12 months.
- 61% of pharmacists see patients pay cash for a GLP-1 every week while still using insurance for their other prescriptions.
- 36% of pharmacists say oral GLP-1s are accelerating the move off insurance, while 43% credit direct-to-consumer manufacturer coupons and telehealth pricing for the shift.
- 30% of pharmacists believe cash-pay GLP-1 purchasing is here to stay.
The Cash-Pay Tipping Point: How GLP-1 Patients Are Bypassing Insurance
Study: Use of oral vs. injectable GLP-1s: “Compared with initiators of injectable semaglutide or tirzepatide, oral semaglutide initiators were generally older (mean [SD] age, 53.3 [14.4] years) and more likely to be female (108 162 patients [72.7%]), with lower baseline BMI (mean [SD], 36.6 [7.2]) and higher coverage by Medicare (19 972 individuals [13.4%].
In this national cohort of over 47 million adults eligible for OMMs, oral semaglutide was rapidly adopted following its Food and Drug Administration approval for obesity, with weekly initiation rates approaching those of injectable semaglutide within 3 months. More than half of oral semaglutide initiators had no prior GLP-1 RA use, suggesting that early uptake reflected both expansion to new users and switching from existing GLP-1 RA therapies. The availability of an oral GLP-1 RA, including oral semaglutide and the recent approval of orforglipron in April 2026,7 may reduce barriers associated with injectable therapies and expand access to pharmacologic obesity treatment.”
