Between the November 2026 mid-term election and November 2028 Presidential election, the U.S. healthcare industry will be fundamentally reset as result of economic pressures in the domestic economy and re-setting of politics in state and federal government.
This assessment is based on these assumptions:
Public sentiment (trust and confidence) in the healthcare industry will continue to decline. It is associated with “big business” and a major source of financial insecurity in U.S. households along with housing, food and energy. A widening majority of U.S. adults favor a complete overhaul of the entire U.S. health system, believe insiders pay lip-service to their concerns and see little evidence lawmakers are prepared to act.
Campaign 2026 will result in a change of control in the U.S. House of Representatives giving Democrats a platform to advance populist themes addressing healthcare affordability, Medicaid solvency and the corporatization of U.S. healthcare. Health costs and price transparency, hospital and insurer consolidation, executive compensation in healthcare, drug prices, fraud, waste and abuse, loss of insurance coverage and corruption will dominate spin in the Democrat- controlled House vis a vis Committee Hearings, legislative proposals and stump speeches by Democrats seeking the party’s 2028 Presidential nomination.
Executive branch changes in health policy-making will be limited to Executive Orders, personnel appointments and campaign rhetoric as the administration seeks influence in the 2028 election cycle. Federal healthcare lawmaking will be constrained by Congress and distracted by likely impeachment hearings in the House. Efforts by HHS to advance its MAHA agenda will be shortcut. Regulations that enjoy bipartisan support in Congress i.e. regulating AI, limiting private equity ownership, restrictions on 340B participation, implementation of site-neutral payments, increased price transparency, increased value-based payment model adoption, interoperability et al—will advance. Federal court challenges on key policy changes will dominate dockets i.e.
States will advance health policies and facilitate structural changes that exceed federal directives. Since SCOTUS 2022 Dobb v. Jackson decision that delegated abortion-access to states, states have implemented policy initiatives sometimes unwelcome to the status quo i.e. hospital and drug price controls, executive compensation caps, reductions in not-for-profit hospital tax exemptions, expanded scope of practice opportunities for mid-level professionals and pharmacists, health spending caps, restrictive drug formularies, integration of social services and community health, regulation of school & workplace clinics, constraints on vertical & horizontal consolidation, and more. The fiscal impact of HR1 (One Big Beautiful Bill) i.e. Medicaid funding cuts, work requirements and reduced insurance subsidization, will dominate administrative attention in states and partisan brinksmanship in Blue v. Red politics.
These assumptions are safe bets. They’re opportunistic to private investors and outside interests that take advantage of decreased public funding, shrinking operating margins in hospitals, nursing homes and home care, growing demand and public dissatisfaction.
In my view, some outsiders are better prepared than insiders to define healthcare’s future. They’re construct is not impeded by the sacred cows that reward our incrementalism.
As ZS’ Institute’s latest report notes: “Healthcare was built for a world that no longer exists.” future-of-health-2026-report.pdf
Paul
Sections in today’s report:
- Quotables
- Economy
- Hospitals
- Insurers
- Physicians
- Polling
- Population Health
Quotables
Fierce Healthcare on Hospital spending: “Hospital spending represents a substantial portion of overall healthcare spending, with its rising prices being targeted more and more often by critics as a driving force in healthcare unaffordability.
Price caps of various designs have been brought by multiple states, including Indiana, Vermont, Washington and Oregon, or proposed in others like Colorado and New York. Several states also have laws on the books requiring additional administrative review of healthcare mergers, or permit state offices to block a deal outright if it is found not to be in the public interest.”
Michigan hospitals denounce bills to cap prices, limit mergers
U.S. Congress Joint Economic Committee Chairman Schweikert on Fraud in healthcare: “We talk about waste, fraud, and abuse, but we should be talking just as much about misaligned incentives that invite it. The data is there. The patterns are obvious. But instead of fixing the architecture, my colleagues in Congress prefer soundbites to solutions. Real reform is complex and that’s exactly why it gets ignored. If we actually want to stop the leakage, and stop wasting taxpayer dollars, we need structural fixes that align incentives.”
U.S. Congress Joint Economic Committee, June 24, 2026 Hearing: “Protecting Patients and Taxpayers: Combating Healthcare Fraud and Leakage to Strengthen Program Integrity
HHS on Operation Trailblazer (June 22, 2026): “The Department of Health and Human Services operating divisions, including the Food and Drug Administration (FDA), the National Institutes of Health (NIH), the Advanced Research Projects Agency for Health (ARPA-H), the Office of the Inspector General (OIG), and other relevant HHS components, are committed to maintaining U.S. global leadership in biomedical research and pharmaceutical innovation. This requires coordinated action across a l of HHS to eliminate the unnecessary delays, redundant requirements, and regulatory ambiguity that currently slow and disincentivize U.S.-based development, while encouraging the broader biomedical research ecosystem to do the same.
HHS will advance this mission across several fronts:
- modernizing regulatory requirements and processes
- improving transparency for regulated entities
- encouraging the adoption of more efficient practices
- ensuring federal do lars are spent on adequately powered and designed trials
- better utilizing existing data sources and technologies for regulatory and data-generation purposes
- improving patient and participant access and engagement in clinical trials and removing disincentives preventing healthcare workers from being involved in the conduct of research
ZS Institute on AI in healthcare: “Healthcare was built for a world that no longer exists. Here’s how we can reshape it.
AI has empowered a new breed of healthcare consumers who are better informed, more empowered and increasingly willing to manage their health independently. If healthcare leaders fail to adapt to meet their needs, they risk losing control of when, how and whether people engage with the system at all.
Briefly, our 2026 research revealed: Patients now trust AI nearly as much as their doctors, fundamentally reshaping where health decisions begin and how they are made. 68% of healthcare providers (HCPs) report an increase in patients requesting specific therapies by name, signaling that patients are doing their own research and leading with their preferences. 45%-68% of patients delay care until symptoms become disruptive, reflecting a growing reluctance to engage with the system early or at all. Up to one-third of patients do not start their prescribed treatments, highlighting breakdowns between clinical assumptions and the real reasons why patients avoid care. These patterns persist across fundamentally different health systems, suggesting the root cause lies not in access or guidance alone, but in how patients experience the system itself, regardless of which country it’s in.”
future-of-health-2026-report.pdf
Bipartisan Senators (Hickenlooper, D-WA Bennet D-CO, Padilla D-CA, Collins R-ME) on rural health program June 18, 2026: “We are writing to express our bipartisan support for successful implementation of the Rural Health Transformation Program (RHTP) and to respectfully request your consideration of targeted adjustments..
We are concerned, however, that the current structure and guidance for implementing the RHTP may unintentionally disadvantage many of the rural hospitals and clinics the program was intended to support. Larger systems and organizations often have substantially greater administrative capacity and resources to compete for and manage grant funding, while smaller rural providers – providers that need this funding the most – may lack the staffing, infrastructure, or technical support necessary to fully participate…we ask for action to further strengthen the program to ensure it fully supports the needs of rural communities and providers by…
- Prioritizing direct support for rural hospitals, rural health clinics, and other essential rural providers that serve as primary access points for care in medically underserved communities.
- Allowing greater flexibility for states to use RHTP funds to enhance reimbursement for already billable services and help offset uncompensated care costs, recognizing that low reimbursement rates and low patient volumes continue to threaten the stability of rural providers.
- Revisiting the current limitations on electronic health record and health information technology investments, so rural hospitals can maintain and modernize the systems necessary to coordinate care, improve quality, and participate in value-based care arrangements
- Ensuring smaller and independent rural providers can meaningfully access funding opportunities and are not placed at a disadvantage
CMS-RHTP-Bennet-Collins-Padilla-Hickenlooper-06.18.26.pdf
MedPage on Medicaid work requirement:” …This all again raises the question of what problem work requirements are intended to solve. Research has consistently shown that most working-age Medicaid beneficiaries already work or are unable to work because of illness, disability, caregiving responsibilities, or school attendance. For those who face barriers to employment, interventions such as supported employment programs, transportation assistance, and job training have demonstrated success without putting healthcare coverage at risk.
Moreover, making Medicaid coverage contingent on work has not been shown to increase work participation, and it’s unlikely to create opportunities to obtain alternative forms of insurance coverage. Many beneficiaries work in part-time, seasonal, contract, or gig-economy jobs that do not offer health insurance. Individuals who will lose Medicaid coverage because of reporting requirements may remain technically eligible for the program while lacking access to affordable alternatives. For many, the result will be neither a path to prosperity, nor a transition to employer-sponsored insurance; instead, it will simply be a road to becoming uninsured.
At a time when millions of Americans already struggle with access to care, enormous amounts of energy are being devoted to implementing vague and non-evidence-based regulations. Primary care physicians, already undergoing a workforce crisis and burning out due to substantial administrative burden, should be spending time on activities that actually improve patient health — not serving as arbiters of the nation’s largest insurance program, one patient at a time.”
Yet Another Administrative Burden for Doctors: Medicaid Work Requirements | MedPage Today
WSJ on healthcare CEO Comp: “Marc Casper, CEO of Thermon Fisher Scientific, is the highest-paid healthcare CEO among S&P 500 companies, The Wall Street Journal reported June 22.
Median CEO pay at S&P 500 companies reached a new high in 2025 at nearly $18 million, according to the newspaper’s analysis of compensation data from MyLogIQ. Half of the executives received year-over-year raises of 9.8% or more. Most large companies pay their CEOs primarily in stock options or restricted stock, and take-home pay can vary significantly from the value companies initially report, the Journal reported.
The Journal ranked S&P 500 CEOs who had been in their roles for at least a year for fiscal years ending after June 30, 2025, and disclosing pay before May 30, 2026.”
Notes:
- Casper (Thermo Fisher Scientific) was 14th overall in the list of S&P 500 CEOs. Sam Hazen, CEO of HCA Healthcare was the highest paid non-life science CEO at #92 on the list, and David Cordani, Cigna, was the highest insurer at 133 overall.
- 46 healthcare CEOs made the list which included 5 from insurance and 2 from hospital management companies.
Top-Paid CEOs Smash the $200 Million Payday ‘Moonshot’ deals push pay for company bosses to new highs in WSJ’s annual ranking; $1.3 billion for four executives at one senior housing company https://www.wsj.com/articles/ceo-pay-2025-
Economy
Kitchen Table Project report: Household spending, Based on its model for how a family of four with a median income has been affected by a slew of economic shifts of recent years, including changes in food, gas and health care prices: They conclude that even as overall inflation has slowed in the last few years, many of the most salient goods and services people buy are more unaffordable than ever, and that rising wages and tax cuts haven’t been enough to offset it.
Why Americans hate the “good” economy
Pitchbook on revenue cycle management market: “RCM has been a favorite area for PE sponsors, with $42.9 billion in PE deals and $22.5 billion in exits since 2017, and a recently announced $12 billion transaction on the horizon. However, US public markets are revealing something about RCM disruption potential. Shares are down 43% YTD for Waystar, a high-quality near-AI-native vendor with organic revenue growth of 11% in Q1 2026.
AI Kills the RCM Star: PE Should Be Wary of RCM Deals as Agentic AI Guts Take Ratesq2-2026-ai-kills-the-rcm-star-pe-should-be-wary-of-rcm-deals-as-agentic-ai-guts-take-rates.pdf
Hospitals
Cassidy proposed legislation on 340B: Senate health committee chair Dr. Bill Cassidy (R-La.) released draft legislation last Thursday to restructure the 340B Drug Pricing Program. 340B Drug Pricing Integrity and Affordability for Patients Act of 2026 would clarify the definition of “patient” under 340B to ensure discounts are appropriately given and grants HRSA more authority to enforce 340B policies.
Pharmaceutical companies could issue upfront discounts, immediate discounts after providers submit claims data to a federally run clearinghouse or rebates within 10 days of receiving standardized claims data. Providers could choose their preferred method as long as they pass along all discounts or rebates to 340B patients.
Hospitals would be limited to a set number of contract pharmacies within each geographic region, although the bill would permit mail-order contract pharmacies for certain providers.
The legislation faces opposition from pharma and hospital trade groups and is unlikely to pass given Cassidy’s lame-duck status in the Senate.
340B Drug Pricing ProgramCongressHealth Resources and Services Adminstration
Study: Price transparency methodology: “The success of price transparency initiatives requires that prices be defined using a common payment methodology. In this article, we explore how coding schemas and pricing approaches varied in five major markets in the United States in 2024. We investigated how frequently inpatient and outpatient payment were based on the use of Medicare Severity Diagnosis Related Group (MS-DRG) or Healthcare Common Procedure Coding System (HCPCS) codes with fixed prices versus alternative methods, such as per diem revenue codes or a percentage of billed charges for all services. We estimated that fixed-price MS-DRG or HCPCS methods were used for a preponderance of services in only 48 percent of inpatient contracts and 53 percent of outpatient contracts in 2024. Within markets, carriers seldom used fixed-price contracts for all hospitals. Similarly, most hospitals were not paid using fixed-price methods by all carriers. These results suggest that price comparisons by consumers, employers, academics, and other stakeholders face significant barriers because of the heterogeneity of payment methodologies. Moreover, efforts to promote price transparency will also need to confront the heterogeneity in pricing approaches when trying to present prices across different hospitals.”
The Opacity Of Price Transparency | Health Affairs
Hospital system financial performance: “Perhaps embodying the longstanding warnings of an industry increasingly bifurcated between high- and low-performing organizations, the country’s 10 largest nonprofit health systems each reported a year-over-year improvement in their operating margins. Even among the three whose operations (after adjustments) remained in the red, their divestitures, reorganizations and organization-wide margin initiatives yielded substantial improvements that appear to be stemming multiple years of losses.
Across the top 10 systems, total operating revenues from fiscal 2024 to 2025 increased by a collective 7.7%, a bit of a pullback from the 10.6% increase from 2023 to 2024. The culprit—two systems, Providence and Ascension, whose tally shrank from year to year due to divestitures and key adjustments in operational strategy.”
Top 10 nonprofit health systems by 2025 operating revenue
Insurers
ACA Marketplace Insurer Participation: “For the first time since the enhanced premium tax credits launched in 2021, insurer participation in the ACA Marketplaces has moved in the wrong direction. KFF published a new analysis this month tracking the shift, and the numbers are worth paying attention to, especially given what’s likely coming in 2027.”
- Average insurer participation dropped from a record 9.6 per state in 2025 to 9.0 per state in 2026
- 18 states saw a net decrease in the number of carriers offering plans
- The number of counties with only a single insurer option nearly doubled — from 93 to 165
- The primary driver: Aetna CVS’s full exit from 17 states
How Has Insurer Participation in the ACA Marketplaces Changed in 2026? | KFF
The 2025 EBRI/Greenwald Research Consumer Engagement in Health Care Survey (CEHCS): The 2025 survey of 2,001 individuals was conducted using Dynata’s online research panel between Oct. 13 and Nov. 8, 2025. All respondents were between the ages of 21 and 64.
“Employment-based health coverage remained the dominant source of health insurance for privately insured adults, with six in 10 receiving coverage through their own job. Coverage patterns have been largely stable, with about one-third enrolled in individual-only coverage and most others covering a spouse or partner. Deductibles remained a common feature of health coverage. More than three-quarters of enrollees had a deductible for medical care, including 70 percent of traditional plan enrollees. The share of traditional plan enrollees with deductibles increased in 2025, reinforcing the idea that exposure to upfront costs is not limited to high-deductible plans. Enrollment in high-deductible health plans declined slightly in 2025, and enrollment in consumer-directed health plans and health savings accounts (HSAs) appeared to be relatively stable. Non–HSA eligible high-deductible plans continued to represent a small share of coverage. “
www.ebri.org
Insurers and Administration’s MAHA agenda: “Health insurers, long vilified by President Donald Trump for driving up health costs, have begun embracing key tenets of the MAHA movement, including its emphasis on wellness, prevention and addressing chronic disease…
Despite tensions between the MAHA movement’s food policy agenda and traditional Republican support for reducing industry regulation, the movement has struck a chord in Washington and beyond. Growing MAHA interest presents an opportunity for health insurers to work together with the Trump administration. Issue Analysis calling them and said he’d pressure them to cut Although Trump has repeatedly criticized health insurers, “money sucking Insurance Companies,” their rates, his “Great Healthcare Plan,” released in January, didn’t include such reforms. Instead the president’s interest in directly targeting the insurers’ pricing seems to have waned . Insurers have used that reprieve to highlight areas of cooperation with the administration. That includes entering into voluntary agreements with the Trump administration last year to overhaul prior authorization, the process through which physicians must obtain approval before providing certain services.”
How the Insurance Industry is Embracing MAHA
Physicians
Physicians are projected to meet 42% of demand in non-metropolitan areas by 2038, a percentage that is largely unchanged from today, according to data from the National Center for Health Workforce Analysis. Physician assistants are expected to pick up a growing portion of that slack. The center is part of the federal Health Resources and Services Administration.
Sullivan Cotter: Physician Comp in 2025: Median total cash compensation for physicians rose more sharply in 2025 than at any point in the past decade, according to a 2025 SullivanCotter’s survey, which analyzed approximately 231,000 physicians across 232 specialties. Highlights:
- The median physician paid compensation per full-time physician was $371,589 in the fourth quarter of 2025, up 8% year over year,
- The subsidy health systems pay to make employed physician compensation work financially, reached $315,358 in the same period, a 4% increase since 2023.
- The average incentive bonus for qualifying physicians in 2024 was $49,000 quantifiable metrics such as RVUs and patient visits do not affect their incentive bonus or base salary. Gastroenterology: Marit Health datafrom 198 salary reports puts average total compensation for gastroenterologists at $786,345 — base of $560,985, with 57% receiving bonuses averaging $35,856 and 23% receiving other income averaging $24,127. Average wRVUs run approximately 9,477 at $64 per wRVU.
Sullivan cotter www.sullivancotter.com
Polling
Century Foundation on affordability: “To understand how people are experiencing the healthcare system today, TCF commissioned Morning Consult to survey 2,002 registered voters nationwide May 21–24, 2026.1 The findings point to three conclusions.
- First, healthcare costs are imposing a heavy and broadly shared burden, forcing millions of families—including Americans with “good” job-based insurance—to ration care, take on debt, and switch to worse coverage.
- Second, voters think President Trump has made healthcare in America worse—and they want major reforms to the healthcare system going forward. Only 22 percent think Trump has improved healthcare, while two-thirds of voters want either new public coverage options or a complete overhaul of the healthcare system.
- Third, when voters were asked what leaders should do specifically, stopping hospitals from overcharging patients was at the top of the list, along with bans on surprise billing and caps on insurance company profits.
Taken together, our findings offer an important lesson for policymakers: defending Medicaid and the Affordable Care Act (ACA) against Trump’s cuts is necessary but not sufficient. Voters are demanding that their leaders make major changes to the current system…
More than half of voters (53%report cutting back on care or taking on debt to cope with healthcare costs—whether delaying care, switching to cheaper alternatives, dropping coverage, or taking on credit or medical debt. More than one in five (22%) delayed or avoided going to the doctor, while one in six (17 percent) took on credit card or medical debt to cover health costs.
But our survey reveals that rising cost burdens also extend to what has long been considered the safe harbor of American health coverage: employer-sponsored insurance, which covers roughly 165 million people, by far the largest source of health coverage for working-age adults.
Among voters with employer-based insurance, nearly three-quarters (74%) report at least one form of cost increase, coverage deterioration, or other difficulty with their insurance in the past two years. This includes 36 percent who said their premiums increased, 31% who saw co-pays for doctor’s visits or prescription drugs rise, and 27% who said their deductible or out-of-pocket maximum increased.”
As Healthcare Costs Spiral, a Supermajority of Americans Want Major Reform
Pew on AI Use by U.S. teens: “A majority of U.S. teens say they use AI chatbots, including about three-in-ten who do so daily. But what are they using them for? And how do they think artificial intelligence (AI) will impact their lives?
Teens turn to chatbots like ChatGPT, Copilot and Character.ai for a variety of things – but information seeking and schoolwork help top the list, while “for fun” is not far behind:
- More than half of teens say they have used chatbots to search for information (57%) or get help with schoolwork (54%). And 47% say they’ve done so for fun or entertainment.
- About four-in-ten each report using chatbots to summarize articles, books or videos or create or edit images or videos. And about one-in-five say they use chatbots to get news, according to Pew Research Center’s survey of U.S. teens ages 13 to 17 conducted Sept. 25-Oct. 9, 2025.”
How Teens Use and View AI https://www.pewresearch.org/internet/2026/02/24/how-teens-use-and-view-ai/
Harvard Chan poll on trust in institutions: “A year into the second Trump administration, trust in federal health institutions, and the Centers for Disease Control and Prevention in particular, has declined considerably while also becoming deeply partisan, according to a new poll.
The poll, conducted by the Harvard T.H. Chan School of Public Health and the de Beaumont Foundation’s Public Health Listening Lab, found only 50% of the public says they trust health recommendations from the CDC, down from 77% in spring 2025.
At the same time, state and local health departments are now substantially more trusted than federal agencies, even as the public trust in those institutions also declined. Between 2025 and 2026, trust in state public health agencies dropped from 80% to 66%, while trust in local public health agencies dropped from 82% to 70%.
The decline in trust is being driven by partisanship, the poll found. Only 34 percent of Democrats said they trust CDC recommendations, a massive drop from 92 percent in 2025.
Among Independents, trust in the CDC dropped from 77% to 47%. Among Republicans, trust in the CDC increased very slightly from 63% to 67%.”
One Year In: Public Views of a Changing Public Health Landscapehttps://hsph.harvard.edu/wp-content/uploads/2026/06/dBF-Harvard_OneYearInPollReport_June-2026.pdf
Population Health
Study: Absenteeism as a health threat:” Chronic absence, defined as missing more than 10% of time in school, has risen sharply in the United States following the COVID-19 pandemic and now affects more than one in four students. It reflects unmet health and social needs and is patterned by deep structural inequalities. Both short- and long-term consequences include adverse impacts on educational attainment, health, and social outcomes. Despite this, chronic absence remains largely framed and addressed as an education-sector problem, limiting the scope and effectiveness of current responses.”
Job mobility and retirement: The new research paper, “Retirement Plan Eligibility Over Time: Comparing Findings from the National Longitudinal Survey of Youth 1997 Panel and the National Longitudinal Survey of Youth 1979 Panel.” Key findings in the report include:
• Job change frequency differed significantly by income for both groups studied. Among workers born between 1957 and 1964, lower-income participants changed jobs 26.2 percentage points more, on average, than higher-income participants. Among workers born between 1980 and 1984, the gap was 18.4 percentage points.
• When both participants born between 1980 and 1984 and participants born between 1957 and 1964 were in their early 20s, they had held an average of approximately 3.5 jobs. By age 43, both groups had held more than 10 jobs, on average.
• Changing jobs often led to changes in employer-sponsored retirement plan eligibility, with more than 30% of participants in both groups gaining or losing plan eligibility when switching jobs.
• Most participants born between 1980 and 1984 had been eligible for a retirement plan at some point by 2023. By ages 39 and 40, more than 85% of participants in this younger group and more than 75% of participants in the earlier group had been eligible for a plan at least once.
New EBRI Research Finds Younger Workers Are More Likely to Be Eligible for a Retirement Plan After Changing Jobs
