Summer is here and its first week is in the books. Like politics, the economy and life in general, it brought the good, bad and ugly attention to healthcare in the U.S.
The good:
- At the American Society of Clinical Oncology (ASCO) meeting in Chicago, attendees heard about a breakthrough medication that dramatically improved results in pancreatic cancer patients (Revolution Medicine) and a gene editing tool capable of permanently lowering cholesterol (Lilly) with Chinese ascendence in the biotech science race a clear takeaway.
- The American Hospital Association issued a statement accepting responsibility—in part—for healthcare affordability concerns mounting nationwide, calling for collaboration with insurers, drug companies and others to pursue solutions. In tandem, AHA released “Making Health Care More Affordable: A Blueprint to Lower Costs, Improve Access and Enhance Quality.” which recommends 5 core strategies and 24 actions to address affordability in a broader context of its systemic reform.
- And the Bureau of Labor’s May jobs report brought a surprise: the labor market rebounded in May adding 179,000 jobs prompting speculation new Fed Chair Kevin Warsh might consider interest rate hikes to slow inflation (a policy that would encounter disfavor in the White House as Campaign 2026 looms).
The bad:
- The House Appropriations Committee mark-up of its FY27 budget Friday included a 4% cut to FY27 HHS’ funding—less than the 12.5% President Trump proposed in his proposed budget but no less sobering.
- The S&P 500 (-2.64%) and Nasdaq (-4.18%) each had their worst single-day drops of the year yesterday after the stronger-than-expected jobs report (BLS May) triggered a market selloff. Stocks fell across a broad range of sectors. The Dow Jones Industrial Average fell more than 1%, and the S&P 500 fell more than 2%. The tech-heavy Nasdaq composite sank more than 4%.
And the ugly:
Last Monday, CMS issued its work requirement directive to the 40 Medicaid expansion states detailing two new requirements they must meet to verify enrollment that begins in January: 1-
- States must use unspecified data that’s not more than a year old to make the eligibility determinations as much as possible.
- Starting Jan. 1, 2028, states must provide documentation proving medical frailty i.e. proof people have conditions that impair their ability to meet the requirements.
And these new stipulations come on top of administrative filing requirements that start at the end of this month and mandated twice/year eligibility verification oversight starting next year.
Per the CBO, the intensified policing of the Marketplaces (a legacy of the Affordable Care Act) is likely to shrink enrollment by 25% or more—that’s the point. The administration holds a view that states are ineffective in managing health programs like Medicaid, CHIP, the Marketplaces et al. contributing to un-attended fraud, waste and abuse.
Neither of the new stipulations from CMS is clear nor was either anticipated. They were an ugly surprise and none of 40 states is prepared.
My take
The promising breakthroughs in diagnostics and therapeutics like last week’s are the reasons most individuals in the U.S.—legal residents or not—believe our health system seeks to do no harm and provides dependable high-quality care, state of the art care (especially if you have insurance). They acknowledge it’s complex and expensive, but they accept it’s what we have for now.
But the bad and ugly news about healthcare seems to dominate media coverage, especially in social media where fact-checking is often shortcut.
For me, the highlight of the week was AHA’s statement committing itself to the pursuit affordability across the system by marshalling its peers to create meaningful solutions. Sign me up. Collaboration is the starting point. Transparency in its deliberations will be necessary to building trust in this process. Inclusion of all proposed solutions subjected to objective review will be its necessary start. And timing is key: election season tends to distort messaging and draw critics. The urgency of direction is no less key: ideally, meaningful direction and substantive recommendations should follow soon after but be independent of Campaign 2026 results in state and federal elections.
Paul
PS I am in DC this weekend celebrating HFMA’s 80th Anniversary at National Harbor. Now living away after 15 years in the nation’s capital, visits like this are bittersweet. There’s no doubt healthcare’s impacted by the laws, rules, administrative actions, executive orders, SCOTUS decisions and appropriations that originate here, but I’ve come to appreciate three realities since leaving here years ago:
1-U.S. healthcare is decreasingly controlled by DC-originated actions and activities. The corrosive impact of partisan brinksmanship in our elective politics has eroded faith and confidence in its purpose and intent, especially in federal government.
2 Changes to the system are increasingly the result of states forced to cope with health & social services programs and private capital seeking shareholder gain. How these align (or not) will be keys to U.S. healthcare’s future. Today, there’s more dissonance than consonance in their directions.
3-Only a few are planning for healthcare’s long-term future. The agenda for most in this industry-including the majority attending HFMA this week- is short-term survival and sustainability. Long-range strategic planning and meaningful assessment of future state scenarios are luxuries for most. Clearly, issues like affordability did not surface overnight.
Sections in today’s report
- Quotables
- Economy
- Hospitals
- Insurers
- Physicians
- Polling
- Public Health
Quotables
Axios on Rattled Generation: “By most objective measures, it’s an extraordinary time to be alive. Americans are wealthier, safer and longer-lived than at any earlier point in history. U.S. total wealth has soared. Violent crime sank to a 20-year low and is still falling. Life expectancy just hit 79 years — the highest in American history. The country produces more energy than ever after four straight record years.
And yet: University of Michigan consumer sentiment just hit its lowest reading in a half-century. Gallup finds most people think things will only get worse. Trust in every major institution — government, media, organized religion, higher education, science — is at or near record lows, both Gallup and the Edelman Trust Barometer find.
The gap between reality and feeling is the story of our era. A three-part shock helps tell it:
- Social media’s rise.
- The chaos of COVID.
- The rise of AI, political extremism and information bubbles in the aftermath of both.
This produced a perpetually Rattled Generation, one too unsteady and uncertain to believe things are truly good or getting better. That’s new for a typically optimistic, can-do society.”
KFF on system blame game: “The industry’s key players blame one another for a broken system. Providers say insurers’ high-deductible plans saddle patients with massive bills even when they have coverage. Insurers say hospitals raise prices at rates that outpace inflation.
Meanwhile, patients are stuck with the fallout. In 2022, about 4 in 10 adults in the U.S. reported carrying medical or dental debt.”
Baffling. Frustrating. Frightening. What It’s Like to Be Sued Over Medical Debt. – KFF Health News
WSJ on Labor Department May Jobs Report: “The U.S. labor market has climbed out of a rut. The country added more jobs than expected in May, posting strong payroll gains for the third month in a row. Despite uncertainties around the Iran war, inflation, trade and artificial intelligence, the report suggests the U.S. labor market is steadily recovering from its weak patch last fall and winter.
The U.S. added a seasonally adjusted 172,000 jobs in May, the Labor Department said Friday, beating expectations. That was far better than the 80,000 jobs that analysts polled by The Wall Street Journal had expected to see.
The unemployment rate stayed unchanged at 4.3% in May, in line with economists’ expectations
With inflation rising and hiring healthy, the question for the Federal Reserve is no longer when to cut rates but whether to raise them. Treasury yields climbed, and traders increased their bets that the central bank would raise interest rates by the end of the year.”
May Jobs Growth Puts U.S. on a Strong Hiring Streak – WSJ
Pope Leo on AI: “Indeed, entrusting an algorithm in practice with the power to select who is worthy or not, without anyone bearing responsibility for that judgment, is to hand over the task of redefining the boundaries of human possibilities. In this process, political responsibility is also lost, not just empathy toward those excluded, which can, after all, be simulated. The exclusion of the vulnerable becomes cloaked in a veneer of neutrality and objectivity, against which it becomes difficult to raise objections. In this way, injustice goes unnoticed, and compassion, mercy and forgiveness — understood not as mere appearances but as real political actions — gradually disappear from view.”
What the pope’s encyclical on AI means for Catholic hospitals, health care | STAT
Health Affairs on obesity drug coverage: “Obesity accounts for 20 percent of all U.S. health care costs. The question is not whether taxpayers will pay for obesity care—we are. The question is whether we will pay for preventive medicine that works, for a lower cost and healthier future, or continue paying for the consequences of inaction. If Medicare beneficiaries with obesity lost just 5 percent of their bodyweight, Medicare would save $22 billion annually.
There are options that don’t engage Congress if changing the law is not feasible now. CMS could finalize its proposed rule permitting coverage of obesity treatments as chronic disease care—no legislation required. Or Congress could pass the bipartisan TROA, removing the statutory exclusion on weight-loss treatments. But voluntary pilots, even with reduced price drugs, are not enough to make significant headway in addressing the systemic obesity crisis. It is time to take other action.”
After BALANCE: Why Voluntary Coverage for Obesity Drugs Failed and What Comes Next | Health Affairs
Zeke Emanuel on prevention: “What does it say about the kinds of processes we have to pursue. One is, you’ve got to have a long-term perspective on investing in science. Number two is, you want a longer health span? You’ve got to invest in prevention, and we don’t do that at all.”
Axios Future of Health Care Medical Innovation’s Big Moment June 5, 2026
Economy
BLS May Jobs Report released Friday: Highlights
- Friday’s report showed job growth in April and March was significantly stronger than earlier estimated. March’s job gains were revised up by 29,000 to 214,000—the largest monthly gain since December 2024. April’s payroll gain was revised up by 64,000 to 179,000.
- “In May, employment in local government rose by 55,000, largely reflecting a gain in local government, excluding education (+44,000). Health care added 35,000 jobs in May, in line with the average monthly gain of 38,000 over the prior 12 months. Over the month, ambulatory health care services added 26,000 jobs, including a gain of 11,000 in home health care services. Employment continued to trend up in hospitals (+6,000).
- Social assistance employment continued to trend up in May (+12,000), mostly in individual and family services (+10,000). Over the prior 12 months, social assistance had added an average of 17,000 jobs per month.”
- In May, year-over-year average hourly earnings rose 3.4%, cooling from a 3.6% gain in April.
Employment Situation Summary – 2026 M05 Results
WSJ Fraud investigation: “The autism-therapy industry, once a tiny corner of pediatric care, has exploded into a multibillion-dollar business, fueled by rising diagnoses, new providers entering the market and laws requiring insurers to cover more services. It has also attracted predatory providers who bill for phantom services, pad hours and charge steep fees for care delivered by low-wage workers with minimal training. The billing abuses run wide. Aetna said the number of investigations that found likely fraud or abusive billing by autism-therapy providers in its private-plan business shot up by 300% between 2024 and 2025—and is on track to rise by another 50% this year.
The issues detected by the insurer’s probes include poor documentation, billing for multiple services for the same hour and claiming to provide care at home addresses that don’t really exist, said Katerina Guerraz, Aetna’s chief operating officer.
In bills reviewed by The Wall Street Journal, a daily charge for one child reached more than $30,000.
When insurers refuse to pay what they consider outlandish or unjustified claims, some providers pursue people directly, dragging families into financial and legal turmoil and disrupting care for disabled children.”
The autism-therapy business is booming—and so is the billing abuse
Hospitals
Public Citizen report: hospital closures: Findings:
- 446 hospitals are at heightened risk of closing or reducing services due to Medicaid cuts. These hospitals collectively have approximately 69,000 beds and served approximately 6.6 million patients in 2024. They employ approximately 275,000 direct patient care workers.
- The communities served by these hospitals have a larger share of Black and Hispanic residents, as well as people living below the poverty line, compared to other hospitals. Nearly 20% of the at-risk hospitals (85) serve high-poverty areas.
- 267 (60%) of the at-risk hospitals serve urban areas, and 176 (39%) are rural hospitals.
- Five states now have over a quarter of all their hospitals at risk: Connecticut, California, New York, Massachusetts, and Washington.
- Almost half of the at-risk hospitals have special Medicare payment designations that are typically associated with hospitals that are rural or financially vulnerable and play a critical role in the communities they serve, including Critical Access Hospital (19%), Rural Referral Center (16%), Sole Community Hospital (9%), and Medicare Dependent Hospital (4%).
The Big Ugly Threat to Safety Net Hospitals – Public Citizen
Hospital 340 B Lobbying: “We examined federal lobbying disclosures to identify the organizations directly shaping 340B reform debates, compare their lobbying expenditures (in 2025), and characterize policy priorities…
Total lobbying expenditures exceeded $2.5 million in 2024 340B Health, representing hospitals and health systems, accounted for 61.3% of lobbying expenditures from 2020 to 2024 and 51.5% in 2024. In 2024, Ryan White Clinics for 340B Access, 340B Working Table, and ASAP 340B (Alliance to Save America’s 340B Program) each accounted for more than 10% of total expenditure, with newer organizations exhibiting the greatest year-on-year expenditure growth.”
Insurers
Study: Marketplace metals profitability: “If we break the profitability down by deciles (grouping members into 10 roughly equal buckets ordered by margin, weighted by enrollment duration), we find an interesting pattern:4
The most profitable 10% of platinum members are roughly twice as profitable as any other metal level’s top decile, but the least profitable 10% generate double the losses of the least profitable gold members and more than 4× the losses of the least profitable bronze. In other words, platinum is high risk, high reward.”
The Profitability Paradox: Why Platinum Plans Are Both the Best and Worst Bet in the ACA
Previous OIG audits of specific MA organizations have identified acute stroke diagnosis codes submitted on physician data records without an acute stroke diagnosis on an inpatient or outpatient hospital data record during the same service year as a high-risk area for overpayment. This audit focused on this high-risk area across multiple MA organizations to examine whether MA organizations’ submissions of these diagnosis codes to CMS complied with Federal requirements. We reviewed MA organizations’ submissions for 97 individuals enrolled in a coordinated care or private fee-for-service MA plan (sampled enrollees). What OIG Found
- For all 97 sampled enrollees, the high-risk acute stroke diagnosis codes that MA organizations submitted to CMS were not supported by the medical records associated with the physician data records containing the diagnoses. •
- On the basis of our sample results, we estimated that CMS made $462 million in potential net overpayments to MA organizations for 2021.
Paragon Institute Report: Exchange Enrollment: “We estimate that approximately 6.2 million sign-ups in 2026 were improper, representing 27% of all 2026 open enrollment sign-ups. These improper enrollments could lead to as much as $25 billion in improper subsidy expenditures in 2026, nearly one-quarter of projected federal exchange subsidy spending.
Improper enrollment remains overwhelmingly concentrated in HealthCare.gov states. 56% of 2026 HealthCare.gov sign-ups claimed incomes between 100 and 150 % of the federal poverty level—the category that qualifies for the largest subsidies.
Plan selection patterns increasingly suggest unauthorized and phantom enrollment activity. Millions of low-income enrollees selected bronze plans with deductibles exceeding $7,000 despite silver plans offering dramatically better coverage for little or no additional premium—a pattern strongly indicative of unauthorized enrollments or intermediary-driven enrollment meant to maintain commissions through enrollment in a zero-premium plan rather than the plan with the best value.”
The Persistent Obamacare Enrollment Fraud
Physicians
Beckers: Stark Law Update: “The Stark law has been on the books for more than three decades, but enforcement has never been more aggressive.
In 2024, seven major Stark law indictments contributed to a record-breaking 979 qui tam lawsuits, with False Claims Act settlements and judgments totaling $2.92 billion by the federal government’s fiscal year-end. Whistleblowers are more sophisticated, DOJ is more willing to litigate, and the cases coming through the courts are rewriting the compliance playbook for physician compensation, referral arrangements, and practice ownership.”
The Stark law cases threatening physician compensation structures – Becker’s ASC
Study: ED Physician attrition: This national qualitative study took place from August 8, 2024, to April 11, 2025, and involved semi-structured video interviews with 46 board-certified or board-eligible emergency physicians who had either left clinical emergency medicine or seriously contemplated leaving. Results:
“In this qualitative study, emergency physicians felt driven out by structural health system failures, including misaligned incentives and inadequate resources. Institutional accountability for adequate staffing, metrics prioritizing safety over throughput and satisfaction, and career adaptability across life stages may promote retention and access to high-quality emergency care.”
Study: Immigration restrictions and clinical workforce: “As part of an escalating set of immigration restrictions, the US federal government enacted a complete ban on immigration from 19 countries on December 2, 2025. Analysis: We evaluated trends in physician and registered nurse immigration from the 19 banned countries over the past decade and characterized US communities most affected by the immigration ban. Annual physician inflow from banned countries increased from 350 in 2010 to 459 in 2023, accounting for approximately 2.5% of total physician inflow in 2023 Annual nurse inflow from banned countries increased from 189 in 2010 to 368 in 2022, representing approximately 1% of total nurse inflow in 2022. The banned countries with the largest number of emigrating physicians over the study period were Iran (1772), Venezuela (918), and Cuba (807); the largest number of nurses originated from Cuba (1312), Haiti (665), and Iran (486). In 2023, 2.15% of all US physicians (23 745 of 1 104 420) and 1.41% of all US nurses (56 332 of 3 995 216) were from banned countries.:
Immigration Ban and the US Health Care Workforce | Health Policy | JAMA Network Open | JAMA Network
Athenahealth’s 5th annual Physician Sentiment Survey:” Access to affordable health care has officially displaced administrative burden as the single biggest policy concern among U.S. physicians. Expiration of enhanced ACA subsidies precipitated a rapid affordability shock, with 52% of physicians prioritizing access, and many enrollees reporting substantially higher costs and downgraded coverage tiers.
Rural clinicians report higher affordability concern and burnout, while practices face constrained pricing power, reimbursement anxiety, labor cost escalation, and small-practice independence risk.”
Why doctors are worried about the patient affordability crisis | Medical Economics
Polling
HMA poll of Medicaid enrollees: The Health Management Academy surveyed 1,974 adults currently enrolled in Medicaid in April 2026 to assess awareness of the coming eligibility changes, anticipated behavioral responses to potential coverage loss, and current access to care. Highlights:
- About 55% of Medicaid enrollees are completely unaware that work requirements will become a condition of eligibility starting January 2027. An additional 27% say they have heard something but are unsure of the details.
- Roughly 85% of enrollees do not know that eligibility redeterminations will shift from annually to every six months.
- Among enrollees with chronic conditions, about 62% say they would ration their medication and 58% say they would stop filling at least one prescription, with significant overlap between the two groups.
- Mental health medications are the most commonly identified category that enrollees say they would stop taking first (25%), followed by blood pressure and cholesterol medications (22%) and diabetes medications (17%).
- About 37% of all respondents say they would wait until a health issue became urgent and then go to the emergency room. An additional 28% say they would use the emergency room for routine care.
- Among enrollees with chronic conditions, nearly two-thirds say they would turn to the emergency room if they lost coverage.
- Roughly 62% of enrollees do not drive themselves to medical appointments, and 42% say they could not travel farther than they currently do if their nearest hospital closed.
What 70 Million Medicaid Recipients Don’t Know About Their Coverage | The Health Management Academy
Commonwealth Polling: Insurance Coverage: June 4, the Commonwealth Fund released results from 6,353 adults ages 19 to 64 surveyed from July 22 to October 27, 2025 including focused on 4,589 respondents with private insurance. Findings:
- Experience with denials: 21% U.S. working-age adults with private insurance reported that they or a family member had experienced an insurance company denial of coverage for medical care recommended by a doctor in the past year, either before or after the care was provided.
- Treatment delays: 41% of people who experienced a prior authorization denial said it led to a delay in medical care, and 28%) said a health problem got worse because of it. More than 60% said the denial caused worry and anxiety.
- Out-of-pocket costs and medical debt: Among people who experienced a claim denial, nearly 70% said it cost them or their household more money; 43% adults who experienced a claim denial reported that the denial led to medical debt that they are still paying off.
- Appeals: Only about half of those who experienced a denial appealed the decision, citing uncertainty over their right to do so and whether it would make a difference if they did, as well as confusion about who to contact
How Health Insurance Coverage Denials Affect Americans June 4, 2026https://www.commonwealthfund.org/publications/surveys/2026/jun/how-health-insurance-coverage-denials-affect-americans-2025-affordability-survey
Population Health
Study: Efficacy of digital self-monitoring: “In this randomized clinical trial of 1214 patients, a digital symptom-monitoring system better maintained health-related quality of life compared with usual care, with smaller declines in EuroQol 5-dimension 5-level utility and EuroQol visual analogue scale scores. Self-efficacy was more stable and unplanned hospitalizations and inpatient days were reduced, whereas performance status and emergency department visits did not differ significantly. Digital symptom monitoring with timely support can enhance community-based palliative care and health-related quality of life.”
Study: End of life costs: “In this cohort study of 313,649 decedents, EOL costs in the year before death for patients aged younger than 65 years were at least 50% higher than for those aged 65 years or older, even after standardizing to Medicare pricing and using covariate adjustment….
After standardizing costs to Medicare pricing, adjusted median EOL costs were $49 259 (IQR, $20 889-$103 317) overall and were highest in the youngest age group (≤18 years; $104 386 [95% CI, $100 144-$108 628]) followed by the group aged 50 to 64 years ($99 182 [95% CI, $98 454-$99 909]), with the lowest median costs observed in the oldest age group (≥75 years, $48 308 [95% CI, $47 945-$48 671]).
The findings suggest attention to EOL care should be expanded beyond Medicare beneficiaries to patients who die young.”
Study: program effectiveness in GA Medicaid mental health program: On July 1, 2023, Georgia implemented Pathways to Coverage, a limited Medicaid expansion program that conditions eligibility on meeting monthly work or community engagement requirements. This study is an evaluation of the program’s effectiveness:
“Among income-eligible adults, implementation of Pathways to Coverage was associated with an increase of 4.0 days per month when mental health was not good and an increase of 7.2 percentage points in the probability of ever being told they had a depressive disorder, compared with adults in neighboring non–Medicaid expansion states.
In this difference-in-differences analysis of national surveillance data, Georgia’s Pathways to Coverage program was associated with worsening mental health among low-income adults. These findings suggest that conditioning Medicaid eligibility on work or community engagement requirements may create additional barriers to coverage and mental health care access, with potential implications for population health and equity.”
Study: Use of Chatbot mental health support by adolescents: “Among a US population-weighted 42 825 655 youth (unweighted, 1009 youth; median [IQR] age, 17 [15-18] years, 19.2% of adolescents and young adults (population-weighted n = 8 207 180) in 2025 reported having used AI chatbots for mental health advice. Among those who sought advice from AI chatbots, 42.8% did so at least monthly, and 91.7% rated the advice as somewhat or very helpful. Most adolescents reported they had not disclosed AI chatbot use for mental health advice to anyone (63.3%). Use of an AI chatbot for mental health advice was more common among females compared with males, respondents aged 18 to 21 years compared with respondents aged 12 to 14 years and those who had spoken with a physician about their mental health in the prior 6 months compared with those who had not.”
