Hospitals represent 31% of total health spending in the U.S. They directly employ 52% of the nation’s 1.1 million physicians and 44% of the 18 million in the healthcare workforce. Many operate ‘related’ businesses including insurance companies, nursing home and long-term care services, fitness facilities and some are investors in private equity funds and joint ventures pursuing innovations in care delivery and more,
“Hospital administration” was once a pursuit of civic-minded youth armed with MHA degrees and internship experiences. Today, it’s much more. It’s bigger, more complicated and more stressful. And,it finds itself in the spotlight while facing formidable headwinds as never before:
- Medicaid cuts in One Beautiful Bill impacting finances in every hospital, especially in rural settings.
- Higher operating costs for labor and prescription drugs (with Most Favored Nation pricing yielding little to date).
- Growing disputes with corporate insurers over reimbursement rates, network adequacy and prior-authorization stipulations.
- Increased demand and use of outpatient services as chronic conditions supplant acute episodes as drivers of utilization.
- Increased attention to affordability (with healthcare a top concern along with housing, gas and groceries and hospital prices the biggest component).
- Increased anxiety among physicians (many facing maturity-cliff pressures from their private equity owners).
- Higher costs for capital (debt) to fund technology, facility and programmatic initiatives.
- And growing public dissatisfaction with the U.S. health system and its most prominent players—hospitals, insurers, and drug companies.
Three March events have compounded the environment for hospitals:
- The War in Iran precipitated higher gas prices and intensified political brinksmanship about ‘costs of living’ in which hospital costs are a frequent referent.
- A cautionary set of 1Q 2026 economic reports (Jobs, CPI, U of M Index of Confidence) produced a sobering assessment by the Federal Reserve that the U.S. economy is unhealthy due to uncertainties at home and abroad. Note: the Jan-Feb BLS jobs reports showed a dramatic slowdown in employment and unprecedented lower hiring in healthcare.
- And, with bipartisan support, the FTC and Congress launched hearings about hospital consolidation signaling regulatory/legislative changes afoot. Notably: in March, FTC and Congressional Committee hearings featured staff reports blaming hospital consolidation for higher costs that increased hospital leverage over insurers and suppliers as the primary impetus and higher costs for communities.
For hospitals, this is March Madness! Strategies to manage demand, reduce costs and leverage favorable operating margins (enjoyed by some) need refreshing because the environment has fundamentally changed. Governing boards and C suites in hospitals face some tough questions about how, and how fast their environment will change. The Big C’s (Costs, Corporatization, Competition, Compliance, Capital, Coverage) are a useful place to start:
Costs: Likely Direction: to control and lower total costs of care while supporting overall economic growth.
- How might costs associated with related administration/ownership of unrelated businesses be accounted? Are GAAP directives adequate to accurate understanding of a hospital’s finances?
- How might the administration’s effort to lower drug costs impact the hospital drug supply chain? How might 340B discounts be modified to enable the administration to more directly target manufacturers and PBMs with lower-your-price-or else’’ price initiatives? How will the Most Favored Nation pricing initiative be expanded? (only 54 drugs covered today with nominal impact on their prices)? How could Trump Rx be factored in the hospital drug procurement (Trump Rx has only 8 manufacturer participation agreements to date but sees integration is hospital procurement a major opportunity).
- How will AI-enabled point and platform solutions be integrated for maximum cost-reduction benefit? Might the federal government break the interoperability log-jam and mandate standardized solutions for hospital HIT?
- How might hospital price controls for IP/OP services impact the organization? Will they be state-imposed or federal?
- How does the hospital define affordability to optimize consumer decision-making? Are underlying assumptions about costs, prices, cost-shifting, bad debt, capital obligations et al readily accessible in communities served? Should hospitals be penalized for lack of affordability?
- How should employed physicians, mid-levels and clinical staff be compensated to maximize effectiveness? How should senior management be compensated? What factors beyond financial performance are necessary to accurately assess their performance?
Corporatization: Likely Direction: to enable coordination of cost-effective care via private sector systemization and technology.
- How do community leaders, business leaders and influencers (non-members of governing boards) view the hospital’s mission, vision, values and use of funds? How does the Board and management assess the unique advantages and disadvantages of its ownership status (system/non-system, for-profit/NFP, et al)?
- Will Congress do away with employer contributions and source Medicare funding from individual taxpayers instead? Will means-testing be the basis for Medicare premiums and funding?
- How does the Governing Board evaluate the performance of the CEO? Are non-financial factors incorporated? Is compensation of the CEO consistent with Board expectations for short and long-term sustainability, growth, cultural health and financial performance?
- Where should hospitals growth strategies focus if increased concentration of core businesses (IP and OP care) is constrained by FTC and DOJ rulings?
- How would a system of health be structured and operate if improvement in population health was the sole objective? Would capital be appropriated toward a balance of primary and preventive health and services for the sick or ill? Is corporatization by hospitals inconsistent with mission-driven purpose?
Competition: Likely Direction: to increase competition by expanding choices for consumers.
- Is competition across each line of business monitored objectively? Is diversification beyond core patient care activity necessary and appropriate for the hospital?
- How will physician/alternative care provider competition impact the hospital? How might changes to anti-kickback (Stark et al) regulations impact physician participation in hospital shared savings programs?
- How will elimination/modification of state CON requirements modify the competitive climate?
- Will community benefits and charity care be re-defined? How might investor-owned hospitals and not-for-profit hospital compete under new metrics?
- How will hospitals compete against physician-owned hospitals is current prohibitions are lifted?
- How might competition between publicly-traded investor-owned and not-for-profit health systems evolve is SEC financial reporting requirements are reduced to twice yearly? How will state and federal legislators and regulators effectively monitor performance if shielded from performance transparency?
- How might 990 reporting requirements change to enable state/federal regulators and communities to more objectively assess hospital performance, executive compensation and community benefits?
- Might charity care for all hospitals be re-defined and specified targets re-visited to verify performance and facilitate alignment with public interests?
Compliance: Likely Direction: increased enforcement to reduce high levels of waste and fraud.
- How will increased federal regulation around fraud, waste and abuse impact each business relationship and transaction of the hospital?
- How are indirect administrative costs associated with independent physicians, and ancillary providers captured and accounted? Do they adhere to current anti-kickback laws?
- How might HHS changes to vaccine policies impact standards of care approved by the hospital medical executive committee? How might credentialling of providers be impacted? Might the hospital sued by community members/clinicians who disagree with new vaccine policies?
- How will new CMS anti-fraud efforts in 10 states (8 Blue, 2 Red) impact services and payments for enrollees using hospital services? Will these provisions expand to other states? Widen to hospital-employed physicians?
- How will hospital tax exemptions be modified to align with direct community health benefits? Are tax exemptions likely to be cut for not-for-profit hospitals/health systems?
- Is overbilling in autism services provided by hospital-affiliated clinicians a likely target of potential fraud investigation by state authorities?
- How will federal requirements for increased price transparency be expanded or modified to facilitate competition? Will states expect more?
- What is the hospital’s evidence for promotion of its quality of care? Is evidence-based science the primary basis for dispute resolution? Credentialling? Clinical process improvements? Are outcomes, clinical process improvements, root-cause analyses, disciplinary actions and clinical innovations adequately discussed by the hospital governing Board?
- How might the FTC’s new Task Force on Consolidation impact pending consolidation plans (i.e. Sutter-Allina announced this week and others)? Might the FTC force local systems to divest/restructure where monopolistic behavior by hospitals has been harmful to public interests?
Capital: Likely Direction: expansion of opportunities for private investors in healthcare.
- How might/will cutbacks in federal funding for Medicaid and Medicare impact the hospitals solvency and liquidity?
- How will interest rates on debt change as a result of current uncertainty about global security (Iran, Ukraine, Venezuela, et al)? How will bond ratings be impacted?
- How will increased state/federal policies limiting PE ownership or operation of hospitals impact access to capital for the hospital? Its related businesses?
- How will the approaching private equity maturity cliff impact hospitals, physicians and other healthcare entities in the market?
Coverage: Likely Direction: to transition insurance coverage to individual policies that require informed consumer engagement.
- How will mandatory participation in alternative payment models (ACOs, bundled payments) impact the hospital?
- How should the hospital reimbursement policies be modified if Medicare & Medicare under-payments are disallowed as a community benefit?
- What is the likelihood voters will pass ‘’Medicare for All’ in 2028?
- How should insurance regulation stimulate demand for individual high-deductible plans?
- How are local public health programs integrated into the hospitals primary and preventive health community benefits? Is the hospital pursuing a “Health and Human Services” strategy or reinforcing the “Health or Human Services” status quo?
- How will states enact/respond to OB3 elimination of marketplace subsidies? Will employers drop/significantly alter employee benefits to lower their costs? Might the employer tax exemption be eliminated by Congress as a means of lowering the federal deficit and shifting healthcare spending to a consumer (B2C) market?
- How should hospitals enable effective consumer shopping for appropriately priced necessary hospital services? Is it a hospital’s obligation?
These are not comprehensive but they’re directionally accurate: the future for hospitals is not a repeat of the past. The market has fundamentally changed.
The blame and shame game played by the industry’s major sectors—hospitals, insurers, drug companies—has not made life better for the citizens it serves. The public’s asking for something better, and elected officials are on their side.
March Madness is reality for hospitals. It requires fresh thinking and uncomfortable adjustments. It’s not optional.
Paul
References in addition to the citations below:
- US consumer spending trends: Embracing AI shopping | McKinsey March 2, 2026
- Healthcare M&A, regulatory scrutiny to rise: law firms – Modern Healthcare
- Watch: Affordability Plagues Health Care in Its Shift from Nonprofit to Profit Machine – KFF Health News March 19, 2026
- Fierce Healthcare: To Tackle Costs, Lawmakers Weigh Curbs on Provider Consolidation
- Geisinger seeks capital requirement relief after Risant merger – Modern Healthcare
- Drugmakers consider licensing deal tweaks to soften MFN impact
- How Weight-Loss Drugs Are Changing People’s Relationship to Exercise – The New York Times
- Stat: Senate Democrats Lay Out Plans to Overhaul Health Insurance
- How Scott and Alla LaRoque got rich from disputed medical bills | STAT
- Playing Favorites — State Protection of Academic Medical Centers from Antitrust Oversight | New England Journal of Medicine March 21, 2026
- Investing in healthcare innovation
- CMS innovation center to expand team focused on drug prices
- Why many Tennesseans are struggling to get healthy: Report bcbst.com.
Sections in today’s report
- Quotables
- Capital
- Governance
- Health Economy
- Hospitals
- Insurers
- Physicians
- Polling
- Population Health
- Prescription Drugs
Quotables
Majority Memorandum House Subcommittee on Health Hearing on Healthcare Affordability March 18: “This hearing is the third in the Committee’s health affordability series and will examine the provider landscape. Hospitals, physicians, and other health professionals play an important role in the delivery of health care services to patients. The goal of this hearing is to explore how provider incentives and trends in the health care system shape patient affordability.
According to the most recent national health expenditures (NHE) data, as tracked by the Centers for Medicare & Medicaid Services (CMS), U.S. health care spending increased by 7.2% to $5.3 trillion in 2024, accounting for 18% of America’s gross domestic product in 2024. Hospital spending represented 31% of total NHE in 2024, growing 8.9% to $1.6 trillion. Physician and clinical spending grew 8.1% to $1.1 trillion in 2024, representing 21% of the total NHE. Overall, hospital and provider expenditures represented more than half of all U.S. health spending in 2024….
Consolidation in the provider sector has also become increasingly prevalent. Horizontal consolidation among hospitals and hospital systems has accelerated recently, after a brief lull during the COVID-19 public health emergency. Recent coverage has highlighted the trend of health systems “expanding across state lines, absorbing independent hospitals and reshaping regional care markets.” A 2024 analysis by KFF found that in over 80% of all metropolitan areas, one or two health systems controlled more than 75% of the market, and 97% of metropolitan statistical areas had markets considered highly concentrated for inpatient hospital care when applying Herfindahl-Hirschman Index (HHI) antitrust guidelines. Researchers have found strong evidence that horizontal consolidation among hospitals is associated with higher prices with no discernable change in quality of care delivered. Moreover, according to the Government Accountability Office, in 2024, at least 47% of U.S. physicians were employed by, or affiliated with, hospital systems—up from less than 30%in 2012.”
03_18_2026_HE_Hearing_Memorandum_0a8170f092.pdf
Federal Reserve FOMC on Interest Rates March 18L: “Available indicators suggest that economic activity has been expanding at a solid pace. Job gains have remained low, and the unemployment rate has been little changed in recent months. Inflation remains somewhat elevated.
The Committee seeks to achieve maximum employment and inflation at the rate of 2% over the longer run. Uncertainty about the economic outlook remains elevated. The implications of developments in the Middle East for the U.S. economy are uncertain. The Committee is attentive to the risks to both sides of its dual mandate.
In support of its goals, the Committee decided to maintain the target range for the federal funds rate at 3‑1/2 to 3‑3/4%. In considering the extent and timing of additional adjustments to the target range for the federal funds rate, the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks. The Committee is strongly committed to supporting maximum employment and returning inflation to its 2 percent objective.”
Federal Reserve Board – Federal Reserve issues FOMC statement
The Atlantic on CDC Vaccine Oversight: “On Monday (March 16), a federal judge issued a preliminary ruling with a harsh reprimand for the Trump administration: You’ve done this vaccine stuff all wrong.
The Trump administration likely broke the law, the judge’s 45-page decision argued, when it dismissed and abruptly reconstituted the CDC’s expert vaccine-advisory panel last June, stacking the committee with members who have aggressively questioned the safety of vaccines. Top health officials also probably acted illegally, the ruling said, when they made sweeping alterations to the nation’s childhood-immunization schedule in January, without the input of their own, remade panel.
If the decision becomes final, it stands to all but wipe away a year’s worth of vaccine-policy change at the CDC. The judge’s ruling calls for staying “all votes taken” by the panel since Health and Human Services Secretary Robert F. Kennedy Jr. remade it—essentially resetting the United States’ vaccine-policy clock to early 2025. But the ruling remains preliminary, and the Trump administration has already hinted at its intent to appeal…
But if the ruling actually stays “all votes” taken by Kennedy’s ACIP, it could also undo moves the panel has made that are very much in line with what other versions of ACIP have or would have done…”
Who’s In Charge of Vaccines Now? – The Atlantic
FTC Chairman Andrew Ferguson launches Task Force on consolidation, competition in healthcare March 20, 2026: “Healthcare is a priority for the FTC’s enforcement and advocacy work in large part because of the President’s executive order to create a “more competitive, innovative, affordable, and higher quality healthcare system.”
Making America’s healthcare system work better—for patients, workers, and taxpayers—is a no brainer. The industry constitutes an extraordinary 18% of our country’s GDP, yet too many Americans struggle to get the care they need at prices they can afford. Consolidation and anticompetitive conduct have distorted the economic landscape in many healthcare markets. The results are disturbing: higher prices, decreased quality, less access and transparency, and stifled innovation. Vulnerable populations including rural communities, seniors, and veterans lack access to affordable and convenient care. Anticompetitive regulations further undermine incentives to lower costs and improve the quality of care
To harness that vast knowledge and take full advantage of the agency’s unique dual mandate, I am directing the FTC’s Bureau of Competition, Bureau of Consumer Protection, Bureau of Economics, Office of Policy Planning, and Office of Technology to take a coordinated, integrated approach to healthcare enforcement and advocacy. As a first step, the Bureaus of Competition, Consumer Protection, and Economics, Office of Policy Planning and Office of Technology will form a Healthcare Task Force. Through the Task Force, the agency’s teams will share knowledge, resources, third-party sources, market intelligence, case leads, and relationships with other agencies and stakeholders.”
Memo from Chairman Andrew N. Ferguson regarding Healthcare Task Force
Capital
Goldman CEO on management focus: “In this rapidly evolving environment, we remain focused on disciplined execution, investing for growth, and prudent risk management. In this last respect, we know from history that nothing is linear over time. While we remain optimistic about the operating environment, it is not hard to come up with scenarios where risks become a lot more pronounced.”
Goldman Sachs Annual Report 2025
Pitchbook on Venture Capital trending: “Venture investment into B2C AI-enabled startups surged to $89 billion in 2025 across 668 deals, marking a 72.5% YoY increase in deal value even as transaction volume slipped modestly. The headline growth was overwhelmingly driven by megadeals in leading platforms such as OpenAI, xAI, Anthropic, and Waymo, with 10 raises over $1 billion accounting for $71.5 billion, reinforcing a “winner-take-most” funding environment. Excluding these outliers, consumer AI fundraising totaled a more measured $17.5 billion, underscoring stable deal flow but heightened capital concentration. Investors increasingly favored later-stage and venture-growth rounds in 2025, which captured nearly 95% of deployed capital, while pre-seed/seed activity contracted amid rising valuation thresholds and monetization scrutiny. Despite renewed enthusiasm following ChatGPT’s breakout and improving exit conditions, consumer AI remains a small share of overall venture activity, suggesting that 2026 outcomes will hinge less on novelty and more on platforms’ ability to demonstrate durable retention, pricing power, and scalable distribution.”
Q1 2026 PitchBook Analyst Note: VC Investment in Consumer AI – PitchBook
Bloomberg on small business funding:: “For at least a decade, private equity has been encroaching on America’s mom and pop businesses, the backbone of the US economy, scooping up independent roofing contractors, veterinary practices, health clinics and other operators at a rapid clip. Now a PE pushback is brewing among small-business owners such as Cunningham, who are increasingly refusing to take part—and making sure everybody knows it, loudly touting their antibuyout stances and locally owned credentials…the spread of software that digitizes scheduling, billing and customer service for even the most niche sectors has opened the door for PE firms to enter markets beyond health care and housing, where they already hold large positions…
Will Dunham, president of the American Investment Council, an advocacy group for the private equity industry, says buyout firms are a key driver of growth for small and midsize businesses in the US. “Research shows that PE-backed businesses consistently boast higher wages and benefits, more job creation and stronger revenue than their non-PE-backed peers,” he says…
But critics point to the darker side: higher prices for customers, a singular focus on the bottom line, potential layoffs, less benefit to the community….”
Private Equity Firms Want to Acquire Small Businesses but Owners Say No – Bloomberg
Governance
National Association of Corporate Directors (NACD) on Board Effectiveness: 8 areas of accountability deemed necessary to board oversight:
- Board Leadership
- Board Culture
- Board Process and Operations
- Board Composition and Succession
- Board Management Relations
- Human Capital Oversight and CEO Succession
- Strategy Oversight
- Risk Oversight
Board Assessment Services | NACD
PK note: In my experience with hospital boards through the years, most hospital boards struggle to stay abreast of issues and trends impacting the hospital they serve. Most are dependent on the CEO to set direction and execute strategic plans. Most do not adequately understand market dynamics—technology, capital markets, macro- and micro-economic trends, politics, regulation, consumerism, et al– that impact the future perhaps more directly and disruptively than traditional measures of utilization and finance. Hospital Board education from a broader perspective is an acute need in hospitals.
Health Economy
Mental health spending: “Understanding what the US spends to treat mental health and substance use disorders (SUD) is important for understanding spending patterns and informing health policy. In this study, we determined that from 2000 through 2021, mental health and SUD nominal spending grew from $40.9 billion to $139.6 billion. Mental health and SUD accounted for 4.5% of all medical services spending in 2000 and 5.5% in 2021. Real per capita mental health and SUD spending grew at an average annual rate of 3.27%, which was faster than the growth rate for overall medical services (2.21%). Our decomposition analysis showed that mental health and SUD spending growth was driven primarily by increases in the number of people receiving treatment (representing 87.3% of the growth) and to a much lesser extent by increases in the cost per case (12.7% of the growth). However, because disease severity was unobserved, these patterns may partly reflect increased treatment of less severe cases rather than unchanged severity-adjusted treatment costs. During this period, the number of mental health and SUD cases treated grew by 253%. In contrast, for spending increases on all diseases, 66.3% of the total spending growth resulted from increases in cost per case, and 33.7 percent resulted from more people receiving treatment.”
KFF analysis: outpatient Medicaid drug spending growth factors: A March 12 report from KFF outlines the key drivers of the increase
- Net spending on Medicaid prescription drugs after rebates is estimated to have grown substantially in recent years, increasing from $31 billion in FY 2019 to $46 billion in FY 2024 (or 46%). Both net spending per prescription and net spending per enrollee also grew over the period, increasing by 42% (from $43 in FY 2019 to $61 in FY 2024) and 25% (from $481 in FY 2019 to $603 in FY 2024), respectively.
- Rebates reduce Medicaid spending on prescription drugs by over half, with state supplemental rebates making up an increasing share of all rebates.
- While net spending increased substantially, the number of prescriptions paid for by Medicaid only grew slightly in recent years, increasing from 734 million in FY 2019 to 751 million in FY 2024 (or 2%). At the same time, the number of Medicaid prescriptions per enrollee declined by 12% (from 11.2 in FY 2019 to 9.9 in FY 2024).
- Looking ahead, more recent quarterly data show the number of Medicaid prescriptions and Medicaid enrollment declining while gross Medicaid spending remains elevated.
Recent Trends in Medicaid Outpatient Prescription Drugs and Spending | KFF March 12, 2026
Pew: Public worker health benefits funding: “Health care and other non-pension benefits for retired public workers, collectively called “other post-employment benefits” (OPEB), remained severely underfunded in 2022, according to the latest data collected by The Pew Charitable Trusts.
The overall OPEB funding gap—the disparity between promised benefits and available assets—was $552 billion in 2022. And the share of plan liabilities that can be paid with available assets, known as the funded ratio, was just 14.6%. These figures amounted to improvements of $130 billion and 5.3%, respectively, compared with 2019.
The funding gap narrowed thanks to increased plan assets from positive investment returns and higher contributions; a decline in total liabilities because of shifts in workforce trends, demographics, and lowered projections for medical cost growth; and a range of state policy efforts to ensure sustainable benefits and long-term fiscal health.”
States Make Progress Toward Closing Retiree Health Care Funding Gap | The Pew Charitable Trusts March 12, 2026
Study: Executive Pay in public companies: Public companies are required to disclose their highest-paid officers — that almost always means the chief executive and usually the chief financial and chief operating officers. Outside of those roles, the mix in the C-suite can change.
Chief technology officers, chief legal officers and chief human resources officers appeared more frequently as named officers last year. The number of CTOs named in public filings increased 61% in 2025 from 2021 among Russell 3000 firms. Chief human resources officers increased 55%. Median pay for these jobs is up, too. CHROs at Russell 3000 companies earned a median $2.1 million in 2025, up from $1.7 million in 2022.
Axios Markets March 17, 2026
| Best States for
Doctors 2026 |
Best States for
Nurses 2026 |
Best States for
Health Care Systems 2025 |
|
| Criteria | 19 measures:
70% opportunity & competition, 30% medical environment |
20 measures:
70% opportunity & competition, 30% medical environment |
44 measures:
Cost (33%) Access (33%) Outcomes (33%)
|
| Top 5 | Montana
Indiana Louisiana South Dakota Minnesota
|
Washington
New Hampshire Oregon Arizona Maine |
New Hampshire
Rhode Island Minnesota Iowa Massachusetts
|
| Botton 5 | New York
New Jersey Rhode Island Hawaii DC* Illinois |
Oklahoma
Alabama North Dakota Hawaii Louisiana
|
Mississippi
Alaska Alabama Georgia Texas
|
Best & Worst States for Doctors in 2026
Best & Worst States for Nurses in 2026
Best & Worst States for Health Care
PK Note: There’s no shortage of “Top 100” and “Best Hospitals” rankings—they’re a staple of the industry just like rankings of states above. Caution should be taken in promoting recognition on any list: methodologies and data sources vary and sometimes recognition is based on “pay to play” agreements with sponsors. Wallet Hub’s rankings rely on public data, sometimes 1-2 years old, to which a weighting scheme is applied. It is systematic, verifiable and helpful as a reference. By comparison, recent challenges to Leapfrog’s methodology ended in a court decision for Tenet against Leapfrog due to its methodology. It’s important that rankings be understood in the context of their methodologies and evaluated longitudinally across multiple survey years.
Hospitals
Kaufman Hall Hospital Flash Report for January 2026: Key Takeaways
- Patient volume in January declined across inpatient and outpatient services. This decline could be due to postponing of elective procedures around the holidays, as well as a change in payer mix.
- Bad debt continues to increase. Carrying over from 2025, bad debt and charity care continue to go up.
- Expenses continue to put pressure on hospitals. In addition to the persistent increases in drugs and supplies, there was a big increase in labor expenses in January.
National Hospital Flash Report: January 2026 Data | Kaufman Hall March 19, 2026
PK Note: KH’s analyses are useful to tracking trends over time. Hospital operating margins including allocations were 2.1% in January but have fluctuated widely in the last 6 months from 1.4% in August to 4.9% in December. But operating margins as reported by KH do not tell the complete story for many hospitals that operate related businesses and have substantial holdings in the stock market. Congress and HHS are monitoring indirect and related business activities in hospital organizations whose financial results extend well-beyond traditional reporting of patient care activity.
Modern Healthcare on Leapfrog pullback: “The Leapfrog Group is withdrawing safety grades for nearly 500 hospitals dating back to fall 2024.
A federal judge this month ordered Leapfrog to unpublish the grades for five Tenet hospitals that alleged in a 2025 lawsuit they received worse grades from the watchdog group after they stopped participating in its surveys as of the fall 2024 report.
Although the judge’s order only applied to the five hospitals, Leapfrog is applying it to all hospitals that did not participate in the surveys during the same period.
When a hospital does not participate in the survey, Leapfrog calculates that hospital’s performance using data from the Centers for Medicare and Medicaid Services as well as assigning some scores itself using a methodology the judge ruled was “excessively punitive.”
The court also ordered Leapfrog to stop assigning safety grades to the five hospitals under the current scoring framework if they choose not to submit their data or otherwise participate in the program in the future.
Leapfrog will not assign grades in its spring 2026 report to any hospital that has not participated in the survey in the past two years, Binder said. The next report is expected to be released by early May.”
The Leapfrog Group to remove safety grades for nearly 500 hospitals – Modern Healthcare
U of MI Study: Hospital Utilization: “Hospital bypass, where patients receive care at a more distant hospital rather than their local hospital, has been described in the literature, but little is known about its association with surgical quality. Using data from the Medicare Provider Analysis and Review file and the American Hospital Association Annual Survey, we designed a retrospective cohort study of rural Medicare beneficiaries who underwent appendectomy, cholecystectomy, colectomy, or hernia repair during the period 2016–20, and we compared outcomes between those who bypassed their nearest surgery-capable hospital and those who did not, accounting for patient characteristics, hospital characteristics, and year of surgery. We found that 49% of rural beneficiaries bypassed their nearest surgery-capable hospital to receive surgical care elsewhere. Beneficiaries who bypassed had higher rates of in-hospital mortality, serious complications, and thirty-day readmissions, despite going to larger hospitals with more resources. Notably, these findings were preserved when we specifically analyzed both unplanned and elective admissions. These findings have important implications for surgical quality among rural patients and struggling rural hospitals, which may be able to alleviate some of their financial vulnerability by retaining larger proportions of these patients locally.”
Study: Pharmacist-led peridischarge transitions of care (TOC): “Pharmacist-led peridischarge transitions of care (TOC) interventions have been shown to reduce adverse drug events after hospital discharge, but whether they reduce readmissions and other health care utilization is unknown.
This randomized clinical trial included 6478 patient hospitalizations among adults aged 55 years or older with polypharmacy or taking high-risk medications, randomized to either usual care (admission medication reconciliation) or pharmacist-led medication review, discharge medication reconciliation, and addressing of medication adherence and safety. No significant between-group difference was detected in all-hospital unplanned 30-day post discharge health care utilization.
Conclusions and Relevance Among older adults with polypharmacy, no reduction overall in 30-day unplanned hospital and ED utilization from a pharmacist-led TOC intervention was detected, but a reduction was found among patients with low medication adherence and literacy, suggesting benefit for this subgroup.”
Hospital Exec Comp: “Nashville, Tenn.-based HCA Healthcare’s executive compensation structure underscores a clear industry reality: financial performance — particularly EBITDA — remains the dominant driver of leadership pay.
According to HCA’s 2025 proxy report, published March 13, 80% of executive incentive compensation is tied to EBITDA performance, with the remaining 20% linked to quality and patient care metrics such as infection rates, mortality and patient experience scores. This weighting reflects a strong emphasis on financial outcomes, even as health systems face increasing pressure to prioritize quality, access and workforce stability.
The structure also reinforces how the for-profit hospital operator defines success… The emphasis on financial performance aligns with broader critiques of how hospital economics — and executive incentives — are structured.
Speaking on “The Healthcare Bridge” podcast, Mark Cuban — entrepreneur and co-founder of Cost Plus Drugs Co. — argued that hospital performance is often driven less by operational efficiency and more by market leverage…For hospital and health system leaders, this model — and Mr. Cuban’s critique — highlight a key tension: whether compensation structures are truly aligned with long-term value, or primarily with financial growth and market position..”
A problem with hospital executive pay
Insurers
Modern Healthcare: insurer closures: “States shut down more troubled health insurance companies in 2025 than during the prior year, but the total remained below historical trends.
Georgia and Minnesota each declared Sonder Health Plans and UCare insolvent last year, according to a preliminary analysis of financial filings the credit ratings agency AM Best performed for Modern Healthcare. In 2024, Opticare Vision Services was the sole health-related insurance company subject to these measures when Utah placed it in rehabilitation, AM Best reported last week.
Over the past quarter-century, states seized control of 109 health insurers, or an average of five companies a year.”
Health insurance bankruptcies ticked up in 2025 March 18, 2026 https://www.modernhealthcare.com/insurance/mh-health-insurance-bankruptcies-2025/
Axios: enrollment fallout from OB3: “Uninsured Americans adults were likelier to conclude they didn’t need health insurance or want to go through the hassle of applying than to opt out because of cost concerns, the CDC found in surveys from 2019 to 2024. The findings offer a counternarrative to the current election-year cost concerns and messaging around rising health care premiums. But the CDC surveys also covered a period during which enhanced Affordable Care Act subsidies lowered health insurance costs for many enrollees.” Those subsidies expired in January (One Big Beautiful Bill).
What they found: About 21% of uninsured adults in 2024 cited affordability concerns alone when asked why they didn’t have coverage, compared with 28% in 2019. Asked about reasons other than cost, 44% said they didn’t want or need coverage, compared with about 41% in 2019. The share citing an overly complicated sign-up process grew to 21% from 17%.”
The CDC analyzed data from the National Health Interview Survey of adults ages 18 to 64.
“Red tape, lack of need drove insurance opt-outs “Maya Goldman Axios
Physicians
Match Day results: “The National Resident Matching Program® (NRMP®) announced the results of the 2026 Main Residency Match last week. “Highlights
- “Of the 53,373 applicants registered, 48,050 certified a rank order list (“active applicants”), representing an increase of 842 applicants (1.8%) over last year//.
- S. MD seniors continue to represent the largest applicant group in 2026 with 20,934 active applicants, an increase of 566 from last year. U.S. MD seniors achieved a PGY-1 match rate of 93.5%, a rate that has held constant since the 2024 Match.
- S. DO seniors achieved their highest PGY-1 match rate on record. There were 8,503 active applicants, an increase of 111 over last year, with a PGY-1 match rate of 93.2 percent, an increase of 0.6 percent from 2025.
- S. citizen international medical graduates (IMGs) accounted for 4,210 active applicants in 2026, a decrease of 377 from 2025, while the PGY-1 match rate rose to 70% the highest on record. The PGY-1 match rate for U.S. IMGs has trended upward since 2022, even as the number of active U.S. IMG applicants has declined over the same period.
- Non-U.S. citizen IMGs accounted for 11,944 active applicants, an increase of 479 from 2025, while the PGY-1 match rate declined to 56.4%, the lowest level observed in five years.”
NRMP Releases Results of the 2026 Main Residency Match for More Than 38,000 Future Residents | NRMP
Study: Female physician wellbeing in academic medicine: “This survey study was conducted at 15 US academic medical institutions who participate in the Healthcare Professional Well-Being Academic Consortium…from October 2019 to July 2021 to assess occupational well-being. Findings:
“Compared with male physicians, female physicians experienced more burnout (3338 of 8052 participants [42%] vs 2769 of 8404 participants [33%] and less professional fulfillment (2786 of 8133 participants [34%] vs 3852 of 8463 participants [46%]. In mediation models including 5 factors associated with occupational well-being, the direct association between burnout and gender was no longer significant while the gender difference in professional fulfillment remained significant. The indirect association of gender with burnout through self-valuation accounted for the majority (63%) of the total difference in burnout between female and male physicians…
In this survey study of attending physicians, the gender difference in burnout was fully mediated by 5 factors associated with occupational well-being, with self-valuation being the largest mediator. These same factors did not fully explain the difference in professional fulfillment, suggesting that further research is needed.”
Polling
Axios-Ipsos poll: March 17, 2026: Highlights: “A strong majority worry about rising health costs and want the federal government to spend more to lower costs. Beyond this, other opinions on government’s role in American health are mixed. A majority of Americans express concern over rising healthcare costs, with bipartisan support for spending more federal tax dollars to address these challenges, according to the latest wave of the Axios/Ipsos American Health Index.
On other public health policy initiatives, Americans remain divided, both along party lines and along alignment with the “Make America Healthy Again” movement. Notably, trust in the federal government’s guidance on childhood vaccination schedules – which changed earlier this year – has significantly declined from last June, primarily among Democrats… Other highlights:
- 69% are very or somewhat concerned about the potential for their health insurance costs to rise in 2026, and 68% report that a 10% increase in insurance rates would have a negative impact on their household finances.
- Majorities of Democrats (92%), Republicans (57%), and independents (69%) agree that the federal government should spend more of its tax dollars to decrease health costs.
- When it comes to public health policies, Americans have mixed views on the role the federal government should play. A plurality (44%) believe U.S. health policies should primarily focus on healthy foods, healthy lifestyles, and disease prevention. Conversely, a third feel that these policies should primarily focus on developing medication and treatments for disease (32%), while 22% say they don’t know.
- From June 2025 to March 2026, public trust in federal childhood vaccine recommendations dropped from 71% to 60%. The most notable decline is among Democrats (from 81% to 66%), though trust has also slightly eroded among Republicans (from 69% to 63%), and independents (from 65% to 58%).
7 in 10 Americans want the government to spend more to lower healthcare costs | Ipsos
KFF March 2026 tracking poll: Key Takeaways “The cost of health care, including paying for health insurance and out-of-pocket expenses, tops the list of the public’s economic anxieties, rising well above other necessities. Two-thirds of the public (66%) say they worry about being able to afford health care for them and their family, ranking higher than utilities, food and groceries, housing, and gas. In addition, most adults (55%) say their health care costs have gone up in the past year, including at least one in five who say they have increased at a faster rate than food or utilities. A majority (56%) of the public say they expect health care costs for them and their families to become even less affordable in the coming year…
More than three-quarters of Democratic voters and independent voters say health care costs will impact both their decision to vote and which party’s candidate they will vote for in the election, compared to about half of Republican voters… two-thirds of Democratic voters and more than four in ten independent voters say health care costs will have a “major impact” on their 2026 voting decisions.
The public’s anxiety around health care costs comes at a time when the Senate and President Trump seem unlikely to revive the ACA enhanced premium tax credits, which expired on January 1st. Most (67%) of the public say Congress did the “wrong thing” by not extending the credits, including large majorities of Democrats (89%) and independents (72%). But majorities of Republicans (63%) including MAGA supporters (64%) say Congress did the “right thing” by not extending the ACA enhanced premium tax credits. While overall popularity of the ACA and the Marketplaces is still high, given the recent debate around the ACA enhanced tax credit debates, favorability has declined among Republicans.”
KFF https://files.kff.org/attachment/topline-kff-health-tracking-poll-march-2026.pdf
Population Health
AP: Revised Covid death toll: “The Covid 19 pandemic’s early death toll was much higher than the official U.S. count, according to a new study that spotlights dramatic disparities in the uncounted deaths. About 840,000 COVID-19 deaths were reported on death certificates in 2020 and 2021. But a group of researchers — using a form of artificial intelligence — estimate that as many as 155,000 unrecognized additional deaths likely occurred in that time outside of hospitals. That would mean about 16% of COVID-19 deaths went uncounted in those years.”
AP: Study Estimates More Than 150,000 Uncounted COVID-19 Pandemic Deaths
Rock Health on Fertility Market growth: “The fertility market is booming and set to surpass $85.5B by 2034. But of the one in eight reproductive age women who have needed fertility care services, a meaningful share never receive them, with cost as the leading barrier. Several recent moves are circling this access opportunity….Fertility startups have historically focused on care navigation and built businesses around employer-sponsored benefits. These latest plays are building new entry points and engagement models beyond that initial foundation.”
Fertile new ground Rock Health March 16, 2026
Axios: Autism problematic to Medicaid programs: “States and insurers that administer Medicaid are scrutinizing autism therapy after spending quadrupled over five years amid a proliferation of fraudulent billings. The scrutiny is also driven by private equity expansion and reports of subpar care. Moves to cap payments and drop some providers from Medicaid mark a pivotal moment for the program, but they could leave some patients and their families in the lurch.
State of play: The focus is a form of intensive, personalized therapy called applied behavioral analysis that’s mostly aimed at young children to help them learn social skills and reinforce positive behavior. Demand for the services has surged, along with Medicaid reimbursement rates, which are higher than other behavioral health services, the Wall Street Journal recently reported. It’s causing a fiscal crunch in states like Nebraska, where spending on the therapy grew 2,000% in five years. Private equity firms have acquired more than 500 autism therapy centers over the past decade, mostly in states with higher rates of autism diagnoses that have fewer limits on insurance coverage.
Providers say the lack of widely accepted guidelines for autism care and the fee-for-service reimbursement system is creating openings for overbilling.”
Medicaid autism therapy boom triggers crackdown
FDA report: foodborne industry investigation results: “The US Food and Drug Administration (FDA) Office of Coordinated Outbreak Response, Evaluation, & Emergency Preparedness (CORE+EP) has released its annual report on 2024 foodborne illness investigations, showing that vegetables and fruits were responsible for 60% of illnesses, trailed by multi-ingredient foods (20%), dairy products (10%), and nuts and seeds and eggs (5% each). The multi-ingredient foods were frozen shakes, shrimp salad, bagged salad mix, chocolates, gummies, and cones, while the nuts were walnuts, and the cheese consisted of raw cheddar, queso fresco, and cotija. The produce included mangoes, romaine lettuce, spinach, cucumbers, jalapeno peppers, carrots, onions, sprouts, alfalfa sprouts, basil, and parsley.”
Urban Institute: Household finances: “Roughly half of Americans fall short of the annual income needed to cover their basic needs, according to new research. A U.S. family with children needs about $145,000 in income to be considered economically secure, according to a March 16 report from the Urban Institute. About 49% of Americans live below that financial threshold, the nonpartisan think tank found. In 2024 (the latest available data), the median household income for married couples in the U.S. was $128,700, U.S. Census data shows.”
Prescription drugs
Stat: National Survey Of NIH-Funded Researchers: “A nationwide STAT survey of federally funded researchers reveals that, a year after Donald Trump’s return to the White House, many academic scientists are reeling. Rather than waning, the impacts of the administration’s seismic changes to science funding are intensifying, causing researchers to drastically scale back the ambition of their work and driving some to shut down their labs entirely.
The survey of nearly 1,000 researchers supported by the National Institutes of Health, the nation’s leading funder of biomedical research, paints a concerning portrait of the state of American science. More than a quarter of respondents have laid off lab members, and more than 2 out of every 5 have canceled planned research. Two-thirds have counseled students to consider careers outside the ivory tower.
Strikingly, despite courts reversing some grant terminations and Congress thwarting plans to slash the NIH budget, just 35% of respondents whose grants were cut or delayed said their government funding had been fully restored by the end of 2025.”
Survey: NIH cuts push labs to brink, hit early-career scientists hard | STAT
Reuters: The TrumpRx.gov drug cost savings questioned: “The Trump Rx website is not delivering across the board lower prices than those paid in the United Kingdom… The prices offered for around a third of the 54 drugs available on the TrumpRx website were lower in the U.K. Those include Pfizer’s arthritis pill Xeljanz, AstraZeneca’s diabetes drug Farxiga, and GSK’s inhalers for lung diseases, which were between 67% and 82% cheaper. Reuters evaluated what pharmacies are paid for each prescription medicine by the U.K. government against prices listed on TrumpRx from eight companies participating. The payouts are updated monthly by Britain’s state-funded National Health Service, which sets prices it pays for medicines through a mix of cost-control agreements and other assessments. In England, patients pay a standard prescription charge of 9.90 pounds, or $13.19, for each medicine, unless exempt.
…The site remains small, offering discounts on just 54 prescription drugs. Many of those drugs already have cheaper generic versions or savings programs available elsewhere, and the discounts cannot be used with insurance or count toward a deductible. And awareness remains limited. A KFF poll released last week found just 7% of those surveyed had visited the site to compare prices, rising to about 16% among people who take GLP-1 medications. “
Reuters
