This will be a quiet week for healthcare in DC with major hearings, confirmations and legislative votes not scheduled.
Last week was relatively calm as well. The House Ways and Means Committee heard testimony from hospital CEOs of HCA, ECU Health, Common Spirit and NY Presbyterian featuring accusations of price gauging and unnecessary costs. And a study that found an OpenAI model outperformed doctors in diagnostic reasoning stirred attention in the physician and healthcare tech worlds where AI’s a dirty word to some and salvation to others.
But, for healthcare, it was an uncharacteristic quiet week. No shutdown announcements akin to Spirit’s 2 a.m. Saturday advisory “winding down all operations.” No strikes by nurses or new megadeal announcements. No public announcements from CMS on new alternative payment models or final rules on reimbursement. But It’s a temporary calm before the tsunami building offshore. It’s the cumulative result of four convergent forces each capable of destabilizing the health economy on its own:
- The One Big Beautiful Bill (HR1) Medicaid cuts and work requirements start January 1, 2027: states are scrambling to be ready.
- Economists expect prices for gas, food and energy to be high into next year as a result of the war in Iran. Consumer confidence is at a modern-era low.
- The labor market is shifting toward the AI economy where server farms and worker displacement are immediate foci.
- And polling shows public erosion of trust and confidence in America’s major institutions at a 40-year low including its health system, Congress and even organized religion.
U.S. healthcare has much to be proud of: we justifiably tout our breakthrough meds and devices, Star Ratings, Top 100 lists and modern buildings. We remind legislators we’re the biggest private sector employer in the U.S. economy and, at every opportunity, our economic impact on communities. And, in every sector of our $5.6 trillion industry, we’re now talking about affordability (without defining it).
In April, I met with several health system Boards, limited partners in 2 healthcare investment funds and health officials in 3 states. The sentiments are the same: they’re concerned about the future and preparing for the worst. They’re asking their leaders and corporate strategists to do the impossible—avert the storm, at least for a little while. They’re confident public funds for healthcare are already stretched with no relief in sight. And they’re attempting contingency planning knowing their efforts might be moot given political volatility in DC and states.
Understandably, the appetite for risk taking in organizations and government agencies like these is relatively low. It’s safer to consolidate horizontally than vertically, cut costs, change incentives, modify reg’s slightly than attempt “newer, better, cheaper” solutions to well-known problems. Old playbooks are dependable. And, for healthcare’s operators, radical incrementalism disguised as transformation has served its interests well for 50 years as spending grew from 9% of the GDP in 1980 to 18% today. Bigger players in each sector have done well and pay their executives to keep it that way while the smaller players are collapsing.
Transformation of the system, and a clear destiny for its future are secondary to self-preservation in US healthcare today. Our investors and lenders expect it, Board compensation committees reward it, and our workforce depends on it.
Thus, until and unless elected officials, large (non-healthcare) employers and concerned community leaders act, it will not happen. And if neglected, the entire system will collapse in the next 10 years.
It’s a possibility few Boards of healthcare organizations seriously consider but growing numbers of concerned citizens fear. Like Spirit Airlines passengers and its 17,000 employees are experiencing, they’re SOL.
Paul
PS: I am in Alaska this week with the Southcentral Foundation, the Alaska Native-owned 501(c)(3) nonprofit that provides comprehensive outpatient and inpatient services to more than 70,000 Alaska Native and American Indian peoples living in the Indian Health Service’s Anchorage Service Unit. Two features of how SCF operates impress me: its purposeful blending of physical, mental, emotional and spiritual wellness in care management, and its Nuka System of Care ownership model in which individuals are customer owners, not patients. There are lessons to be learned from both.
Resources
Health system CEOs face affordability questions from Congress| STAT
Congress grills HCA, Common Spirit, other hospital CEOs over costs – Modern Healthcare
OpenAI model outperforms doctors in diagnostic reasoning study | STAT
America’s birth rate decline concerns echo a eugenicist past | STAT
U.S. Debt Tops 100% of GDP – WSJ
Spirit Airlines Shuts Down After Years of Struggle – The New York Times
Quotables
Vyas (Columbia U) on academic medicine: “The covenant between AMCs and society was based on the premise that these programs were in the best interest of a society committed to advancing medical science and improving individual and public health. AMCs offer two interconnected promises of public goods: one for today (advanced patient care and safety-net care) and one for tomorrow (research and medical education). In return, society provides substantial tax incentives for these hospitals. A total of 2927 U.S. nonprofit hospitals received a $37.4 billion total tax benefit in 2021,1 as well as substantial financial support for GME…
A century ago, the Flexner Report highlighted profit orientation as one of many maladies of U.S. medical schools, triggering structural reform. Today, the profit motive and business priorities again overshadow the patient primacy for which medicine strove for millennia. Corporatization has polluted the training environment. These three reordering remedies could help launch a renaissance of academic medicine’s time-honored troika of patient care, education, and research
Springsteen on White House Correspondents Dinner shooting: “We also send out a prayer of thanks that our president, nor anyone in the administration, nor anyone attending, was injured at last night’s incident. We can be critical of those in power, and we can peacefully fight for our beliefs, but there is no place in any way, shape or form for political violence of any kind in our beloved United States.”
Hassan on Medical Education: “Medical education is the profession’s most powerful instrument for determining its own future. It is currently pointed in the wrong direction. The physicians best positioned to remain indispensable in an era of clinical automation are those who practice comprehensive, integrative, inquisitive medicine. They are the physicians who own their patients across time and context, generate novel hypotheses under uncertainty, and bring genuine moral engagement to the relational dimensions of care. These capabilities have been crowded out, gradually and consequentially, by training cultures and incentive structures that reward volume, procedural throughput, and protocol adherence.
Reforming those structures is a policy problem with identifiable levers: accreditation standards, reimbursement design, and the integration of automation literacy into the curriculum. None of these reforms is technically mysterious. But they will flounder until we recognize that the stakes go deeper than even educational quality or professional satisfaction. They go directly to the most fundamental question facing the next generation’s physician workforce: Will it be trained for the tasks that automation cannot perform or for the tasks that automation is already performing more cheaply? The economic framework is clear about what happens to labor that does not move up the value chain as automation expands. The profession still has time to choose a different path. That time is finite, and the choice grows more consequential with each year that training and incentive structures remain unreformed.”
Matt Hasan is founder and CEO of AI Results and founder of the AI Humanist Movement.
A Profession at The AI Frontier: Medicine Must Reinvent Itself or Cede Ground | Health Affairs
Lee on physician health: “Yes, healthcare workers should be held to higher standards of academic excellence, ethics, and professionalism than the average person. Yes, we need better distress tolerance than most. But this doesn’t mean we owe medicine our entire lives…
Compassion for patients does not necessitate absorbing cruelty in silent compliance. Nor does it require unconditional surrender of our entire selves. Boundaries are healthy. Fulfilled, content physicians who can hold identities outside medicine — as parents, writers, foodies, artists, athletes, and more — are optimal physicians to vulnerable patients.
I would hope that our patients can have the compassion for us that we hold daily for our communities. And more importantly, I hope you, dear physician reader, can hold that compassion for yourself.”
We’re Doctors, Not Martyrs | MedPage Today
Potter on HSAs: “What the insurance industry’s message left out back then is the same thing the HSA industry is leaving out now as it launches a political push to leverage the Trump administration’s renewed love for HSAs: They don’t fix the affordability problem. They shift money upward to the people who already have it.
The evidence has been available for two decades, and it is unambiguous…
It’s not just the tax math. High-income households are more likely to make HSA contributions, more likely to receive employer contributions, and tend to contribute more money than lower-income account holders…
Higher-income households are nearly twice as likely to have a tax-advantaged account linked to their health plan as the lowest-income households
The federal tax exclusion for HSAs is projected to cost the government nearly $180 billion over the next 10 years. That’s money that could go to Medicaid or Affordable Care Act (ACA) premium tax credits to help working families afford coverage. Instead, under the Big Beautiful Bill Act, hundreds of billions of dollars will be cut from the Medicaid program in coming years and millions of low-income Americans will lose their coverage. Millions more will return to the ranks of the uninsured because Republicans refused to extend ACA premium tax credits that expired at the end of 2025. Every dollar the federal government uses to subsidize a wealthy person’s HSA investment portfolio is a dollar not available to help a low-income family afford a doctor.”
I Helped Sell Health Savings Accounts. They’re a Bad Deal. | MedPage Today
Axios: AI in C Suite: The next 18 months will sort companies into two camps — those with leaders committed to running a genuinely AI-integrated organization, and those that bought a bunch of AI tools and called it transformation.
The bottom line: The leaders you trust won’t be defined by vision alone. They’ll be the ones who treated AI like a discipline — not a distraction — and stayed honest with you all the way through.
Axios AM 1 big thing: Your future-proof leader
Beacon Health on Strategic Planning: “Our strategic planning process follows a disciplined annual timeline that moves from analysis to decision‑making to execution, with deliberate engagement of the Board, physicians, and management at each stage. The process begins with comprehensive data collection, including internal performance metrics, market and competitive analysis, external benchmarks, and targeted surveys of board, physicians, and leaders. These inputs inform in‑person scenario planning and strategy sessions designed to surface risk, challenge assumptions, and frame clear strategic choices. Management leads analysis and option development, physicians contribute clinical and market perspective, and the Board focuses on direction, trade‑offs, and long‑term sustainability. The process emphasizes the importance of presence—recognizing that in‑person engagement is critical for alignment, trust, and productive dialogue—particularly during scenario planning and Board and physician strategy sessions. The outcome is a focused set of priorities aligned to mission, supported by capital planning, workforce, and automation/digital plans, and monitored through disciplined performance review and course correction.”
PK Note: I saw this process firsthand last week: one of the best I’ve witnessed in my career. Beacon’s market is changing and its Board and Managers are aware and engaged.
Diane Maas, Chief Strategy & Digital Transformation Officer, Beacon Health, Granger IN
Yet governance capability has not kept pace with the stakes. In other highly regulated, capital-intensive sectors, board development is treated as a core governance responsibility. In healthcare, it is still too often episodic.
Clinical Thought Leaders on AI in Medicine: “The US is nearing a critical juncture in the delivery of clinical care. Physician supply is tightening while demographic trends increase demand. Simultaneously, artificial intelligence (AI) systems, particularly large language models, are beginning to demonstrate competencies that overlap meaningfully with the cognitive tasks integral to clinical care.
The clinician shortage and rapid advances in AI are usually treated as separate policy issues. Both must be considered together. The workforce shortfall creates urgent demand for autonomous clinical AI—agents that make care determinations independently, without per-case clinician review—whereas the adaptive nature of that technology and the risks associated with many clinical decisions demand a fundamentally different regulatory framework. Existing regulatory frameworks for clinical AI are ill suited to adaptive, general-purpose systems. Instead, a licensure-based approach, grounded in ongoing clinical evaluation, offers a safer path forward.”
A Licensure Framework for Autonomous Clinical AI Alon Bergman, PhD1; Robert M. Wachter, MD2; Ezekiel J. Emanuel, MD, PhD1
AI’ religious orientation: “Over a formal lunch in Washington last year, Anthropic CEO Dario Amodei sat down with two dozen conservative thought leaders to pitch Claude, his company’s chatbot, as the most ethical option on the market.
The pitch went sideways almost immediately. When attendees asked which ethical code Claude actually followed, whether Christian, Aristotelian, or Nietzschean, Amodei said he wasn’t sure.
The anecdote has been making the rounds in recent weeks, and it captures a question now bedeviling the AI industry. As chatbots move deeper into education, health care, customer service, and even pastoral care, the companies building them are being forced to answer something philosophers have argued about for millennia. What does good actually mean, and whose version gets coded into the model?”
The Economist on Therapeutic Benefits of Exercise: “For those in the doldrums, few things are more tiresome than being told to exercise. But unwelcome advice is not necessarily wrong. Study after study has found that exercise boosts mood and reduces anxiety. Two large analyses published earlier this year go further, suggesting it works about as well as therapy or antidepressants…
Exercise seems to reduce inflammation and improve brain plasticity, as well as increasing the transmission of dopamine in the brain. Dopamine is involved in the process of weighing effort against reward and so increasing transmission may help reverse the loss of motivation associated with depression.
There are purely psychological benefits, too: exercise can provide people with a sense of achievement, agency and eventually mastery, all of which are known to lift mood. Plenty of reasons, then, to work up a sweat.
Is exercise as effective as treatments for depression and anxiety? The Economist
GLP-1’s and Retail Health: “GLP-1s have become a highly competitive market in recent years after the medications were approved for weight loss. Telehealth companies such as Noom and Teladoc seized on the trend and began competing with traditional providers and pharmaceutical companies to disperse the medications. Retailers entering the space ratchets up the battle for patients and profits.
The program announcements come just a year or two after ventures to provide healthcare services came to a sputtering halt for some retailers.
Walmart, for example, abruptly shut down virtual care services and 51 clinics across five states in 2024, citing a challenging reimbursement environment and unsustainable operating costs. The company still operates almost 4,600 pharmacies and 3,000 vision centers.
Earlier this month, Walmart announced a Better Care Services platform expansion that connects customers to third-party resources such as fitness app Aaptiv, nutrition therapy startup Berry Street and virtual care company Curai Health. Walmart Pharmacy provides access to GLP-1 prescriptions.”
Amazon, Walmart, CVS make push into the GLP-1 market – Modern Healthcare
Archelle Georgiou Substack on prior authorization: “We have been focusing on the wrong metric. Denial rates tell you how often a plan said no — and sometimes that’s legitimate. Overturn rates tell you how often the plan was wrong when they said no. Patients, employers, and policymakers should hold plans accountable to an overturn rate below 5%. That’s the same bar we set for clinical processes to prevent patient harm.
Pharmacy PA operates largely without the transparency requirements that apply to medical services. The proposed 2026 rule would fix that. The comment period closes June 15. Patients deserve the complete picture. So do the clinicians, advocates employers and policymakers making decisions on their behalf.”
(15) Medical Prior Authorization Got Your Attention. Pharmacy Data Is Worse — And Mostly Hidden.
Economy
Medical prices drive cost increase: “The NHE estimates attribute 2.5 percentage points of the 6.1 percent per-capita spending increase in 2024 to medical prices, with notable price increases in sectors such as hospital care. Even if there was slower price growth in 2024, when applied to an already elevated price level, prices remain a substantial policy concern, particularly for affordability, public budgets, and household financial burden.
Health care spending reflects the interaction of prices and volume. In practice, when researchers decompose spending growth, volume typically encompasses both the use and the intensity of care delivered, with intensity referring to changes in the mix or complexity of services per episode. Empirically, disentangling the contribution of prices and volume is often performed by measuring one component directly and inferring the other based on total expenditures. Reframing spending growth away from prices may be appealing, but it does little to change the underlying economics of U.S. health care. While utilization is undeniably part of the equation, prices—whether labeled explicitly or embedded in measures of intensity—remain central to understanding why US health spending levels are high and why spending continues to grow…”
The US Health Spending Problem Is Still About Prices | Health Affairs
Fed holds interest rates: “The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. Developments in the Middle East are contributing to a high level of uncertainty about the economic outlook. 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 April 29, 2026
PCE Report: “Compensation costs for civilian workers increased 0.9%, seasonally adjusted, for the 3-month period ending in March 2026, the U.S. Bureau of Labor Statistics reported today. Wages and salaries increased 0.8% and benefit costs increased 1.2% from December 2025.
Compensation costs for civilian workers increased 3.4%, not seasonally adjusted, for the 12-month period ending in March 2026. Wages and salaries increased 3.4% and benefit costs increased 3.6% over the year.
“Compensation costs for private industry workers increased 0.9%, seasonally adjusted, for the 3-month period ending in March 2026. Wages and salaries increased 0.7%and benefit costs increased 1.3 % from December 2025.
Compensation costs for state and local government workers increased 1.0%, seasonally adjusted, for the 3-month period ending in March 2026. Wages and salaries increased 1.0 % and benefit costs increased 1.2% from December 2025.”
Employment Cost Index Summary – 2026 Q01 Results
Market Watch on Department of Commerce PCE report: According to newly released U.S. Department of Commerce data, the personal consumption expenditures (PCE) price index rose 0.7% in March — the biggest increase since the middle of 2022. Higher gas prices tied to the Iran war were the leading cause of the increase. In the 12 months through March, PCE inflation advanced to 3.5 % from 2.8$ a month earlier–the highest level since spring 2023.
Inflation rate leaps to nearly 3-year high after Iran war. The Fed’s hands are now tiedhttps://www.marketwatch.com/story/inflation-rate-leaps-to-nearly-3-year-high-due-to-iran-war-now-the-feds-hands-are-tied-2b78b103
Gas prices: “Gasoline prices in the United States rose on Tuesday to their highest level in four years as peace talks between the United States and Iran appeared at an impasse.
The average cost for a gallon of regular gasoline is $4.18, according to the AAA motor club. The price at the pump has not been that high since April 2022, shortly after Russia invaded Ukraine. Tuesday’s jump of 1.6% was the highest percentage increase in more than a month.
U.S. Gas Prices Hit Highest Level Since Beginning of War in Iran – The New York Times
WSJ: Big Tech investments in AI: “The biggest tech companies are spending a fortune on AI now. They, and their shareholders, will be paying for it for years to come.
Earnings reports from Microsoft, Amazon.com, Meta Platforms META -8.55%decrease; red down pointing triangle and Google parent Alphabet on Wednesday all showed the companies continuing on a path of blowout capital expenditures. A collective $133 billion went out the door during the first quarter, up about 70% from a year earlier. The four are now on track to spend a combined $725 billion this year, according to updated capital-spending projections issued with Wednesday’s reports.
The sharp spending growth is driving another important number higher as well. Depreciation charges surged at all four companies, totaling $41.6 billion for the most recent quarter.
Most tech executives have approached the AI boom with calculated irresponsibility. They know the current returns can’t justify their spending, but their faith in a future in which AI drives the global economy means they won’t rein it in.
The executives are, in a way, the corporate equivalents of graduate students running up credit-card debt, certain their lucrative careers will pay it off. They just better not drop out—or else end up working at Starbucks.”
The Clock Is Ticking for Big Tech to Make AI Pay – WSJ
1Q 2026 Economic Indicators: “…consumer sentiment near historical lows and weak hiring appetite among employers, data on consumption, which constitutes roughly 70% of gross domestic product, has held up, especially among households in the top third of income. Personal consumption grew 1.6% in the first quarter, slightly better than expected.
One particularly positive note was a measure that captures the sum of consumer spending and gross private investment. It rose 2.5% in the first quarter, compared with an increase of 1.8 %at the end of last year. Growth continues to be buoyed by capital expenditures related to the build-out of artificial intelligence infrastructure…
But the “core” measure of consumer prices, which excludes the volatile energy and food categories, rose 0.3 percent in March, a slight slowdown from February. Still, core prices were up 3.2% from a year earlier, well above the central bank’s long-run target of 2%. Inflation was proving stubborn even before the war.
The Fed held interest rates steady on Wednesday, in a bid to contain any further rise in inflation from the oil price shock and the lingering effects of tariffs that the Trump administration imposed last year on foreign goods…
Ultimately, the stability of markets and the broader economy may hinge on whether commercial activity can withstand the mounting pressure of costlier energy and the threat of its filtering through to households and businesses.
The University of Michigan’s U.S. consumer sentiment index slumped to a record low in April, even below recession-era levels. Yet most economists still expect expansion this year, not a downturn.
Hospitals
The Governance Institute survey on health system Governance: Highlights: “Only 32% of boards require continuing education for board service. 31% still lack formal job descriptions for board members, board chairs, or committee chairs. Nearly one-third have not used a board assessment tool in the prior three years, and individual board member evaluations remain rare…”
Falling Behind: Health system operations are advancing faster than govern – The Governance Institute
Hospital at home expanding: “Health systems aiming to scale hospital-at-home programs are using health equity as a rallying point in their efforts to convince more state Medicaid programs to pay for the care…
About a dozen states including Massachusetts, New Jersey, Florida, North Carolina, Oklahoma, Arizona, Arkansas, New York, Ohio and Delaware cover hospital-at-home, either under Medicaid or through managed Medicaid plans.
Providers been racing to expand in-home acute care under the Centers for Medicare and Medicaid Services Acute Hospital Care at Home (ACHH) waiver, which the federal government extended through September 2030. The wavier reimburses for home-based acute care at the same rate as an in-facility stay. The waiver only covers patients with traditional Medicare, although state and private insurers can opt to pay for the service.
Medicaid has been the primary or secondary payer for nearly half of the 4,500 patients enrolled in the program. Clinicians delivering acute-level care to patients often identify food, medication, transportation and other needs that can affect patient health…”
PK Note: The ACHH program is a tough sell in states facing Medicaid cuts so engaging philanthropy to develop this program is an important consideration.
How providers are pushing Medicaid to cover hospital-at-home – Modern Healthcare
Study: Hospital drug pricing spread “This paper uses 2020-2024 Blue Cross Blue Shield insurer data on expenditures, pricing, and utilization to estimate the impact of manufacturer price decreases for 20 major biologics.
Hospital margins for these 20 products increased from $2.37 billion in 2020 (55% of insurer expenditures) to $2.97 billion in 2024 (59%). A 20% manufacturer price reduction would increase hospital buy-and-bill margins to $4.84 billion, 52% of insurer expenditures, while a 40% reduction would increase hospital margins to $5.97 billion, 64% of insurer expenditures. The shift in insurer expenditures from drug manufacturers to hospitals is estimated to reduce research and development (R&D) investments between $282 and $564 million in 2028.
A large share of insurer expenditures for physician-administered drugs and biologics is retained by hospital intermediaries rather than accruing to pharmaceutical manufacturers.”
Study: Coordination between hospitals and SNFs: “Question Is skilled nursing facility (SNF) capacity within hospital-SNF markets associated with hospital length of stay?
Findings This cross-sectional study of 3.34 million Medicare fee-for-service hospitalizations in 2018 and 2019 identified 421 hospital-SNF markets using community detection. Within markets, lower nurse staffing levels were associated with longer hospital stays, particularly among beneficiaries dually eligible for Medicare and Medicaid.
Meaning These findings suggest that network-defined hospital-SNF markets provide a reproducible framework for measuring postacute care capacity and may inform strategies to address hospital discharge delays.”
Insurers
Study: MA Star Rating Changes: “… little is known about which measures have driven observed performance improvement over time. During the period 2015–25, most of the improvement in star ratings was concentrated in a small subset of clinically focused and medication-related measures, with nine measures accounting for more than one-third of observed gains. Medication reconciliation and medication therapy management showed the greatest improvement, while many access, preventive care, and patient experience measures showed little or no improvement. Patterns were consistent across both Part C and Part D, suggesting that gains were driven largely by medication management and other provider-led activities, rather than plan-specific responses to quality bonus incentives. Lower-performing contracts improved the most, whereas high-performing plans exhibited smaller measurable gains as a result of there being limited room for further improvement and longer measurement histories for some measures. Aligning incentives with measures that are both clinically meaningful and responsive to health plans’ actions may promote more balanced quality improvement.”
KFF: State Actions on Medicaid work requirement verification: “While 28 states and Washington, D.C., will offer hardship exemptions, three of those states won’t adopt all four exemptions allowed by the law and two — Iowa and Indiana — don’t plan to adopt any.
People can also be exempted from the work requirements if they are “medically frail.” But the federal government has not told states how to define that term or how to determine whether an enrollee falls into the category.
The survey showed that 21 states, as of March, had not defined medical frailty. Nebraska, which is implementing its work requirement May 1, recently issued a list of thousands of health conditions that could qualify enrollees as “frail” and exempt them from working.
Some states plan to allow patients to self-attest to medical frailty, while others will require confirmation by a medical professional. The most common way of verifying medical frailty, which will be used in just over 30 states, is by examining Medicaid claims data…
Six states plan to use AI to assist with the work requirement implementation in some way, such as for document processing or comparing beneficiary data from different sources, KFF found. Two states, Maryland and New Mexico, plan to use AI to analyze claims data.
Three states — Arkansas, Missouri, and Oklahoma — plan to use AI to interact directly with people on Medicaid and assist them with identifying and uploading verification documents and data.”
States Rush to Figure Out How to Enforce Trump’s Medicaid Work Requirements – KFF Health News
Trilliant study: Divergence of hospital and insurer reported rates: “This study quantifies the divergence between hospital-reported and health plan-reported negotiated rates for a defined set of billing codes across a sample of hospitals and payers, and examines the distribution, magnitude and direction of those discrepancies. Key Takeaways:
- Fewer than half of hospital-reported and health plan-reported negotiated rates were within 10% of each other across inpatient, outpatient GI and outpatient orthopedic procedure codes.
- Roughly one in seven rate pairs differed by more than 50%, with individual cases exceeding a 17x gap between the two sources for the same hospital, payer and procedure.
- Exact matches between the two data sources were rare – 9.0% for inpatient MS-DRGs, 10.8% for outpatient GI surgeries and 11.7% for outpatient orthopedic surgeries.
- For Aetna, HPPT rates exceeded hospital-reported rates on average across all procedure categories, with average hospital-to-HPPT ratios ranging from 0.6 to 0.9. For UHC, the direction was more mixed, with average ratios closer to or above 1.0.
The Majority of Hospital and Health Plan Reported Rates Diverge by More Than 10%
Physicians
Study: Clinical AI accuracy: “More than 65 years ago, complex clinical diagnostic reasoning cases were introduced as the gold standard for the evaluation of expert medical computing systems, a standard that has held ever since. In this study, we report the results of a physician evaluation of a large language model (LLM) on challenging clinical cases across five experiments with a baseline of hundreds of physicians. We then report a real-world study comparing human expert and artificial intelligence (AI) second opinions in randomly selected patients in the emergency room of a major tertiary academic medical center. In all experiments, the LLM outperformed physician baselines and displayed continued improvement from prior generations of AI clinical decision support. Our study suggests that LLMs have eclipsed most benchmarks of clinical reasoning, motivating the urgent need for prospective trials.”
Performance of a large language model on the reasoning tasks of a physician https://www.science.org/doi/10.1126/science.adz4433
STAT: Medical practice employment contracts: “As I read over an employment contract for a job as a psychiatric nurse practitioner, one clause stopped me cold. If I left the practice, I’d owe $7,500 for every patient who chose to continue treatment with me.
When I questioned the clause, the response came quickly, with irritation: “The practice owns the patients. You do not.…
Patients are not inventory. Clinicians are not property. And a business model that requires secrecy and ownership claims over human relationships to remain viable is not merely unattractive or impersonal; it is ethically indefensible.”
Employment contracts harm patients with mental illness | STAT
MedPage Commentary on AI study: “…, they tested o1-preview’s diagnostic probabilistic reasoning using five cases on primary care topics. The LLM modestly outperformed GPT-4 overall and clinicians had substantially wider variability in estimates than either AI.
The authors noted that this research only reflects the preview version of OpenAI o1 and that newer models already exist; more research is still needed comparing these newer models. Also, their study focused on emergency medicine and internal medicine, so the findings are not applicable to all specialties. Plus, the experiments were purely text-based with no auditory or visual information that clinicians would normally use to inform their response.”
New AI Model Beats Doctors at Clinical Reasoning, Diagnosis | MedPage Today
Polling
KFF Polling: Per the KFF Health Tracking Poll (April 14-19, 2026):
- “Nearly two-thirds (64%) of adults are worried about being able to afford health care costs, on par with the share who now worry about gas and transportation costs (64%) and outranking other economic concerns…
- When given a list of possible changes that could be made to their health insurance, half (46%) of insured adults choose lowering their out-of-pocket costs as most important, more than twice the share who cite eliminating prior authorization (22%) …
- Health costs also loom large in the upcoming midterm elections. About nine in ten voters say the issue will influence their decision to vote and who to vote for in the 2026 midterm elections, with majorities saying it will have a “major impact” on both areas (55% and 61%)…”
KFF Health Tracking Poll: Health Care Costs and the Midterms | KFF
Employer Benefits Manager Survey: The Pharmaceutical Strategies Group (PSG) on Monday released its annual Trends in Specialty Drug Benefits report based on responses from 228 benefits leaders representing employers, health plans and unions. Results:
- 43% ranked managing specialty drug costs as their top goal
- 37% said their No. 1 goal is to manage total cost of care
- 68% of those surveyed said that optimizing specialty formularies across pharmacy and medical plans is either a moderate or great focus.
- 72%) of the payers surveyed said they have a medical benefit formulary in addition to a more traditional pharmacy formulary.
- 50% of employers and 72% of insurers have plans in motion for cross-benefit formulary management.
- 93%) of the payers surveyed receive rebates under their pharmacy benefit; 51% receive rebates for drugs covered under the medical benefit.
Fierce Healthcare: A look at payers’ attitudes toward specialty drug management
Population Health
Covid: “In April 2020, people around the globe were struggling to come to grips with the strictures of unprecedented societal shutdowns aimed at slowing the spread of Covid-19. Flattening the curve, in 2020-speak.
Six years later, school and business closures, mask wearing, and social distancing are dim, unpleasant memories. And Covid, though it still animates political animus plenty, feels like a threat from yesteryear.
In 2021, Covid was the third most common cause of death in people ages 18 and older in the United States, according to the Centers for Disease Control and Prevention. By 2023, it had dropped to the 10th spot. In 2024, the most recent year for which these data are available, Covid ranked as the 15th most common cause of death among American adults. (Influenza was the 11th that year.) For kids and teens, Covid fell out of the top 10 causes of death in 2023.
Is Covid still a thing? The risk has waned, but hasn’t vanished | STAT
AEI: SNAP Benefit Utilization trends: “Using data from the SNAP Quality Control dataset, I analyzed changes in SNAP households and participants from fiscal year (FY) 2000 through FY2023. The overall growth in participation has dramatically changed the types of households receiving SNAP, with a shift in participation toward households with older adults and with one person and away from households with children. These dynamics reflect not only demographic changes, such as population aging, but also differences in SNAP policies for households with elderly and disabled members compared with other households.
…Federal data show that over the past 25 years, the number of SNAP participants has more than doubled—from about 17 million to over 42 million—while inflation-adjusted total benefit costs have tripled (FNS 2026a). Even after considering population growth, SNAP participation has doubled, rising from roughly 6% of the population in 2000 to about 12% in 2025 (ERS 2025)….By fiscal year (FY) 2023 (the most recent year with available data), 36% of SNAP households contained an elderly person (up from 16% in FY2010) and only 34%contained children (down from 49% in FY2010) (Monkovic and Ward 2025, 81, table A.27). This report examines those and other changes, explains policy rules contributing to these shifts, and considers future policy reforms to slow SNAP’s growth, including ways to build on recent changes enacted through the One Big Beautiful Bill Act (OBBBA).”
Opinion: Smartphone use of teen fertility relationship: “Teen fertility collapsed globally starting around 2007. This affected countries across the income and policy spectrum. This paper argues that smartphones changed how teens spend time with each other, and that this change in turn drove the collapse in teen fertility. Once enough teens are on the phone, being on the phone is where the peer network is; in-person time falls sharply, and with it the unstructured contact in which most unintended teen conceptions occur. A coordination model formalizes this tipping: as the smartphone price falls, the in-person equilibrium ceases to exist and the economy moves to a phone-mediated one. Within the United States, terrain ruggedness variation in broadband and 4G coverage identifies a causal effect on teen fertility, and time-use diaries show in-person socializing among teens roughly halving while digital leisure roughly tripled. A parallel design for England and Wales recovers the same acceleration and the same effect of mobile coverage on teen conceptions, ruling out country-specific contraceptive-access and welfare-reform stories. The model predicts that the shift towards the phone-mediated equilibrium affects multiple aspects of teen behavior. The same instrument that produces a collapse in teen fertility produces a surge in teen suicides.”
The Collapse of Teen Fertility in the Digital Era
Prescription Drugs
Purdue update: OxyContin maker Purdue Pharma LP has to pay a $3.5 billion fine and forfeit an additional $2 billion, more than five years after it pled guilty to criminal charges related to its role in the opioid crisis, a New Jersey federal judge said Tuesday.
Purdue Pharma’s $5.5B Plea Deal Clinched As Survivors Protest – Law360 UK
Study: Most favored nation pricing: Researchers from the University of Washington, Camber Collective, and the University of California, San Diego analyzed the maximum fair prices (MFPs) from Medicare drug price negotiations. They found that US MFPs were lower than estimated US prices, but higher than prices in other countries:
“MFPs were 15% to 60% (median: 38%) lower than estimated US net prices… However, MFPs remained 17% to 755% (median: 108%) higher than the average… list price in MFN [most-favored nation] reference countries.”
Assessment of IPAY 2027 Medicare drug price negotiation maximum fair prices with prices in most-favored nation reference countries Journal of Managed Care & Specialty Pharmacy
Study: NIH study design flaw: “A new study from Northwestern University, published on Monday in Nature Communications Medicine, looked at a sample of 574 NIH-funded papers published between 2017 and 2024, and found that although a majority — 61% — included both sexes as subjects, only 44% of them reported their results by sex. The lack of sex in results could make research harder to replicate, and make it hard to know whether the results apply equally to men and women, the authors said.
“We see 13% of publications don’t even tell you the sex of their subjects,” said Nicole Woitowich, the executive director of the Northwestern University Clinical and Translational Sciences Institute and the paper’s lead author. Even when the research mentioned including both sexes, she said, information about the specific breakdown can be missing. “They don’t actually say we used 10 female mice and 10 male mice; they’ll say we used mice of both sexes,” she said. “
Biosimilars growth: “Sensing an opportunity, CVS Health spun up Ireland-based Cordavis to co-produce biosimilars in 2023. UnitedHealth Group launched its own Irish operation, Nuvaila, in 2024. Cigna created Cayman Islands-based Quallent Pharmaceuticals in 2021 to focus on generic drug relabeling; the unit pivoted to biosimilars three years later.
PBMs simultaneously began shifting away from Janssen Biotech’s Stelara and AbbVie’s Humira, two high-priced biologic drugs to treat autoimmune disorders. Taking their places on formularies are private label biosimilars and biosimilars from other manufacturers. The Food and Drug Administration has approved 82 biosimilar drugs since its first clearance in 2015, including 18 last year, according to the agency.”
PBMs lean on private label biosimilars to cut drug costs – Modern Healthcare
