Last week was a bad week for physicians: CMS proposed decreased Medicare reimbursement for physicians (CMS’s CY 2026 Medicare Physician Fee Schedule Proposed Rule), nurses took dead aim at the American Medical Association’s new billing codes based on autonomous AI (clinically meaningful algorithmic analyses, or CMAA) that discount their contribution to care and mounting legal challenges to AMA’s alleged copyright misuse of the CPT code set (AMA received $301.4 million in licensing fees in 2024).
It’s not surprising: physicians and the American Medical Association have enjoyed deferential influence in the U.S. health system dating back to the 5 physician signers of the Declaration of Independence in 1776. As the health system evolved, physicians effectively protected the profession against trends and regulations that threatened its power: physicians (M.D.s/D.O. s) control standards of quality applied across the system and enjoy the public’s trust as advocates who seek to do no harm. The profession controls its pipeline of peers (competition) thru medical education, credentialling, residency and licensing and imposes its will in scope of practice disputes with nurses, pharmacists, alternative health providers and virtually every other clinical guild. And it pushes back aggressively when payment policies threaten the income enjoyed by its members.
Two trends pose immediate challenges to these notable successes:
Access to capital: Today, 80% of physicians are employed by health systems or private-equity organizations. The “Independent practice of medicine” is no longer associated with practice ownership having been replaced by clinical autonomy and income considerations. Thus, access to capital to fund technology, acquire patients and manage practice overhead is top of mind to the profession today. While its seasoned veterans reminisce about the good ole days, the new breed anticipates work-life balance, demanding patients, high income and increasingly contentious negotiations with their employers and investors. Nothing less.
Consumer expectations: Patients trust physicians until and unless (1) they see evidence of clinical incompetence, (2) they encounter consistently poor service in scheduling and follow-up, or (3) they recognize a discernible benefit resulting from their encounters with “their doctor”. Consumers understand physicians are paid well and harbor no resentment until and unless it’s flaunted by the clinician’s lifestyle, obvious in his/her mannerisms or observable in practice operations. Consumer demands are changing: ease of access, price transparency, shorter wait time, technology-enabled coordination and verifiable outcomes are table stakes. And consumer expectations are increasingly influenced by social media and misinformation. In most practices, consumer expectations are subordinated to practice efficiency and income maximization. Most physicians treat ‘patients’ as uninformed, passive participants in their custodial care, not as active users and purchasers. It’s easier for physicians to discount consumerism than embrace it, and it’s more profitable for private equity and hospitals to go along. That’s a recipe for failure in the future.
Looking ahead:
It is impossible to construct future-state scenarios for U.S. healthcare in which physicians don’t play a critical role, but the profession’s significance is at risk. It’s obsession with clinical autonomy belies mounting evidence much of what’s done is unnecessary and often income-driven. Agentic AI and sophisticated clinical analytics will re-define how clinical performance in medical care is assessed. Insurer reforms and large self-insured employers will force consumers to be accountable for the value (costs, outcomes, prices) they negotiate with their physicians. And the regulatory framework through which physicians enjoy a level of protection from market forces will loosen.
In tandem, relationships between hospital-employed physicians and their bosses will be more dicey. Hospitals face mounting pressure to justify their costs, account for tax exemptions, disclose business relationships with physicians and provide pricing information for consumers and employers. Medicaid Cuts in HR1 (Big Beautiful Bill) and declining insurance coverage increase bad debt for hospitals and physicians eroding margins for both. And regulators in DC and most states are keen to enact limits on 340B funds, site neutral payment policies, investment gains, executive compensation and hospital prices drawing on NHES data that confirm hospital finances have fully recovered from the pandemic and, for major multi-hospital operators become profitable.
For the American Medical Association, it’s an opportunity to refresh a playbook that has served the profession well for decades. Like hospitals, the profession’s future is not a repeat of its past. That makes the profession’s future cloudy.
Paul
PS: Of particular note in the citations below are studies noting the “financialization” of nonprofit hospitals as a result of their investing activity and the influence of private equity ownership on hospital profitability. The American Hospital Association’s “Making Health Care More Affordable” campaign to address affordability suggests 5 strategies:
- Increase access to primary care and prevention.
- Improve transparency of pricing information.
- Revise the tax code to protect patients from catastrophic costs.
- Modify requirements for high-deductible health plans.
- Engage individuals in their health and health care. Support the use of “wearables,” EHR-integrated
Notably, the 5 items are important but a sixth is missing: hospital consolidation which has been shown to reduce affordability. The issue of healthcare affordability is not going away.
Sections in today’s report:
- Quotations
- Economy
- Hospitals
- Insurers
- Physicians
- Polling
- Population Health
- Prescription Drugs
Quotables
Blasé on health spending growth: “Federal health care programs exploded in size during the Biden administration. The growth in federal health programs harms freedom in many ways. First, all government spending must be financed. Given persistently high deficits, this means more federal debt—which raises borrowing costs and ultimately requires higher taxes or reduced economic growth.
Second, the more power Washington has over our health care, the more decisions favor groups with the best lobbyists, rather than those that can most effectively meet patient needs. Third, the growth of government programs directly leads to more fraud and abuse—which damages the American experiment by causing resentment as hard-working families who play by the rules see fraudsters and crooks enrich themselves at the public’s expense….
No major program has grown more over the past 13 years than Medicaid. Between fiscal years 2012 and 2024, federal Medicaid spending increased 149%—from $248 billion to $618 billion. The growth rate in federal Medicaid spending during this period was almost double the growth rate for federal Medicare spending.
Much of this recent Medicaid spending growth reflects a surge in corporate welfare flowing to large hospital systems through managed care organizations, as well as the Affordable Care Act (ACA) expansion of Medicaid to able-bodied, working-age adults. Under the Biden administration, this type of corporate welfare exploded as Medicaid started paying hospital systems much higher rates than Medicare pays, in some cases two to three times as much for the same services. States financed these corporate welfare payments almost entirely with federal dollars—using financing gimmicks such as provider taxes…”
As America Turns 250, It’s Worth Celebrating Last Year’s One Big Beautiful Bill https://paragoninstitute.org/newsletter/as-america-turns-250-its-worth-celebrating-last-years-one-big-beautiful-bill/?utm_source=substack&utm_medium=email
JAMA on Medicaid cuts and children’s health: “Individuals, families, and governments often balance costs in the present against future benefits. This is the basis on which rational investment decisions are made. One is often willing to forgo current consumption to obtain a future return. However, how should one consider a decision that forgoes consumption (cutting Medicaid) that will incur current costs (unhealthier children) to avoid future benefits (higher tax collections and a healthier population)? This is the equivalent of taking money that might be used to fix a leaky roof today and giving it to a bank that will charge you to hold it, thereby reducing, not increasing, the amount you have available at a later date: a negative interest rate. This is the opposite of investing in the future.
A policy that undermines the financial integrity of millions of US households while simultaneously threatening the viability of health care delivery for children by way of costing US residents tax dollars over the long term is a bet against the future: a true lose-lose proposition.”
Cutting Medicaid for Children—A Bet Against the Future | Health Care Economics, Insurance, Payment | JAMA | JAMA Network July 13, 2026
Lubarsky on MA prior authorization: “John C. Goodman’s July 10 op-ed gets a lot right (“Why Do Democrats Hate Medicare Advantage?”). Medicare Advantage rewards plan for identifying patients’ true health needs; doctors get paid according to a higher level of care being provided; and, most important, plans make money by keeping people healthy.
Unfortunately, Medicare Advantage plans also benefit by holding doctors’ and hospitals’ money hostage for months, sometimes not paying at all, for care already provided…
Our Medicare Advantage denials have grown 132% over the past year, despite promises from insurers to do better. Prior-authorization delays don’t only strain our balance sheet; they delay or deny necessary care. Patients are caught in the middle when they should only be worrying about getting better. These tactics prevent health systems from investing in patient care improvements, such as a new cancer center, facility repairs and more modern equipment.
Medicare Advantage holds great promise, but until plans are held to Prompt Pay standards like Medicare, and pre-authorizations have time limits, hospitals, doctors and patients will never love it.”
Why Doctors Don’t Like Medicare Advantage – WSJ
NEJM on physicians in politics: “Five of the 56 signatories of the American Declaration of Independence were doctors, a high-water mark in the history of medical representation in American political leadership…The current American landscape contrasts starkly with that of 1776, when doctors led in society and politics, serving as accoucheurs to both their patients and their new country. Writing in 1787, Rush noted that the nation remained a work in progress: “The American war is over: but this is far from being the case with the American revolution. On the contrary, nothing but the first act of the great drama is closed. It remains yet to establish and perfect our new forms of government; and to prepare the principles, morals, and manners of our citizens, for these forms of government.” This call for engagement still resonates. As our nation continues to grapple with issues for which medical expertise is sorely needed, physicians may wish to reconsider their independence from national politics.
Declarations of Independence — Physicians and the U.S. Body Politic, 1776–2026 | New England Journal of Medicine June 27, 2026
CVS CEO on future of CVS: “When you look at the drivers of cost, a lot of its still hospitalization utilization, and it’s also the drug manufacturer pricing. Because we haven’t given patients the tools to engage in their health care, they’re not making the right and most informed decision.
We can blame the drug companies. We can blame the hospitals. But ultimately, we have to get the patients engaged more in their health care…
We’re building technology for the benefit of the hospital, for the benefit of the pharmacy, for the benefit of the health plan. All this stuff should be flipped and inverted to be building it for the benefit of the consumer.”
CVS Health floats cost solutions – POLITICO
AHA’s Molly Smith on affordability: “When it comes to affordability, patients must come first. Our recommendations recognize that affordability cannot be about cutting benefits or simply sifting costs from premiums into cost-sharing. The best approach to affordability is helping people stay healthy, eliminating unnecessary costs, simplifying the billing experience and preserving access to essential services. These recommendations, as well as the dozens of others included in our blueprint, offer practical steps toward a healthcare system that delivers better value and a better experience for everyone.”
- Increase access to primary care and prevention.
- Improve transparency of pricing information
- Revise the tax code to protect patients from catastrophic costs.
- Modify requirements for high-deductible health plans.
- Engage individuals in their health and health care.”
Community benefits, consolidation, tax exemptions, rural health
Molly Smith, AHA group vice president of public policy, AHA Today
Nonprofit hospitals as financial institutions: “Our findings reveal that nonprofit hospitals substantially expanded their investment portfolios from 2010 through 2023, holding nearly $300 billion in securities by 2023. This growth reflected the increasing role of financial markets, financial actors, and financial motives in hospital operations, which is part of a broader trend of financialization in the health care industry. Although considerable research has examined how hospitals are affected when they become investment targets of private equity firms and other financial actors, little attention has been paid to hospitals’ engagement in financial markets as investors. Our analysis suggests that nonprofit hospitals are not merely passive participants in this transformation but are themselves becoming financial actors, allocating substantial resources to complex investment instruments and increasingly resembling institutional investors.
Nonprofit hospitals’ investment in other securities grew from 6.3% to 9.3% of total assets, while publicly traded securities remained stable at approximately 16%. Such a shift toward alternative investments, which include private equity, hedge funds, and venture capital, suggests that hospitals might be making deliberate strategic choices to pursue higher-risk, higher-return investment opportunities. For example, Kaiser Permanente, one of the largest nonprofit hospital systems, reportedly held $57 billion in private equity commitments by 2022. These alternative investments often have limited liquidity, less regulatory oversight, and less transparency than publicly traded securities.
Investment portfolios serve legitimate purposes for nonprofit hospitals. Reserves provide financial stability during economic downturns, fund capital improvements and strategic initiatives, and help buffer against revenue volatility from patient care. Many hospitals maintain these reserves to ensure long-term sustainability. However, nonprofit hospitals receive substantial tax exemptions, estimated at billions of dollars annually, in exchange for providing community benefits such as charity care, community health programs, and services for vulnerable populations. Yet there are no requirements that hospitals reinvest financial gains from their investment portfolios directly into patient care, nor are there mechanisms to protect patients from bearing the costs when hospitals experience investment losses. This raises difficult policy questions: Should tax-exempt hospitals be permitted to invest so aggressively in high-risk alternative assets? Should there be limits on the proportion of assets allocated to alternative investments? Should investment income be taxed? And should hospitals be called upon to prove that the income from their investments supports their charitable mission?
These questions seem more pressing as hospitals appear increasingly dependent on investment returns to offset stagnant patient revenue growth. When investment income can fluctuate by more than 100 percent year-over-year while patient revenue barely grows, hospitals may face pressure to adjust operations through pricing, service offerings, or staffing in response to market conditions, rather than community health needs. These dynamic risks transforming hospitals from community anchors focused on health outcomes into financial institutions with health care operations.”
PESP on PE ownership in healthcare: “More than 500 healthcare facilities have joint ventures with private-equity-linked companies, according to a July report from nonprofit research group Private Equity Stakeholder Project. More of those partnerships are on the way, advisers said.
Putting profits before patients is not unique to private equity–owned healthcare companies. But because there’s less transparency around private equity deals and the companies they own, and because private equity firms tend to use more debt than other types of investors to fund their business strategies, the private equity business model can amplify the profit-seeking behaviors that put patients and healthcare workers at risk.”
Private Equity Stakeholder Project https://pestakeholder.org/issues/healthcare/
Vanguard on boomer finances: “Baby boomers are in their post-work era — an estimated 10,000 of them retire every day. As a whole, they’re a very wealthy generation, but they’re not all cruising toward their golden years financially sound. According to a Vanguard estimate, just 40% of boomers between 61 and 65 are on track to afford their lifestyles in retirement. Americans believe they need $1.6 million to comfortably retire, according to a survey from Charles Schwab. Boomers, on average, have a fraction of that saved up.”
Millennials Are Financially Supporting Retired Baby Boomer Parents – Business Insider
Economy
National Health Spending: “By 2034, national health spending is projected to total nearly $9.0 trillion and to represent 20.6% of the economy, compared with $5.3 trillion and 18.0% in 2024. The rate of national health spending growth during this period is influenced by continued elevated use of medical services and goods through 2026; major legislative changes that affect insurance coverage and spending through 2028; and continued demographic shifts toward public programs, mainly Medicare. The insured share of the population is expected to be 90.5% in 2034, compared with 91.8% in 2024.”
Deficit attributable to Medicare: “Payroll taxes don’t come close to covering its costs. And soon Medicare debt will dominate the deficit
Total federal deficits are expected to be $1.85 trillion in 2026 and $2.96 trillion in 2035, an increase of 60 percent. Medicare’s effect on the deficit is projected to be $651 billion in 2026 and $1.73 trillion in 2035.
That’s why Medicare’s share of the federal deficit rises from 35 percent to 58 percent in just ten years. It passes half of the entire federal deficit in 2031.”
How Much of the Deficit Is Driven by Medicare? (9) Introducing the Substack app
WSJ on job market: “By most key metrics, the U.S. labor market is in fine shape: the economy has added jobs for four straight months, much improved from late last year, and the unemployment rate has drifted down to 4.2%.
Yet nearly two million Americans have been locked out of the job market for at least half a year.
The long-term unemployed—people without work for 27 weeks or more, the longest period the Labor Department reports in each monthly jobs report—accounted for 27.3% of all unemployed people in June, up 4 percentage points from a year earlier.”
The Job Market Is Improving. Two Million Workers Face Long-Term Unemployment. – WSJ
Study: CMS Program Integrity savings: “CMS has spent 2026 building a public case that its Medicaid program integrity crackdown is paying off, including a $1.3 billion funding deferral to Minnesota, provider revalidation orders sent to all 50 state governors, and a jump in Medicare program integrity savings to $41.9 billion in fiscal year 2025 from $26.3 billion the year before, according to a study published July 14 in the American Journal of Managed Care.
But an analysis from Georgetown University’s Center for Children and Families, cited by AJMC, complicates the fraud narrative CMS has built around those numbers.
Of the 21 Medicaid provisions included in the federal budget reconciliation law, the analysis found only 4 actually target fraud, waste or abuse. The Congressional Budget Office estimates those 4 provisions will reduce federal payments to states by $25 billion over 10 years — about 2.5% of the law’s roughly $990 billion in total Medicaid cuts. Work-reporting requirements and six-month redetermination cycles for Medicaid expansion adults, by contrast, account for nearly 40% of the law’s cuts, largely by disenrolling people who fail to complete paperwork or verify income and work status on shortened timelines — not by identifying fraudulent claims.
The distinction matters most for the population who remain eligible for Medicaid but lose coverage anyway because they missed a redetermination deadline or couldn’t document work-reporting compliance.”.
Fraud and Abuse Against Medicaid: The Truth About the Budget Reconciliation Law https://ccf.georgetown.edu/2025/07/25/fraud-and-abuse-against-medicaid-the-truth-about-the-budget-reconciliation-law/
MSN on Fed policy change, inflation: “Although earnings season typically garners all the glory on Wall Street, monthly inflation reports have been outshining corporate earnings in recent months. In May, U.S. trailing 12-month (TTM) inflation jumped to a three-year high of 4.2%.
Despite this rapid jump in inflation, the ageless Dow Jones Industrial Average (DJINDICES: ^DJI), benchmark S&P 500 (SNPINDEX: ^GSPC), and technology-inspired Nasdaq Composite (NASDAQINDEX: ^IXIC) have all recently catapulted to all-time highs. But sweeping inflationary concerns under the rug can be a potentially dangerous maneuver for Wall Street and investors.”
Hospitals
Health Affairs Study: Investment activity in NFP hospitals: “Between 2010 and 2023, nonprofit hospitals substantially increased their investment portfolios. Total holdings in publicly traded securities grew from $145 billion in 2010 to $265 billion in 2021, before declining to $197 billion in 2023 Nonprofit hospitals’ investment in private equity, hedge funds, venture capital, and other securities increased from $43 billion in 2010 to $108 billion in 2021, declining modestly to $99 billion in 2023. Combined, these investment portfolios totaled $296 billion by 2023, representing a 56.6 percent increase from $189 billion in 2010 after inflation adjustment. Total securities holdings peaked at $374 billion in 2021, reflecting the surge in financial markets during the COVID-19 pandemic, and then declined during the 2022 market downturn…
Investment management fees grew steadily throughout the period, rising from an average of approximately $300,000 per hospital in 2010 to $597,000 in 2022, before declining slightly to $559,000 in 2023. This represents an 86.3% increase in fees during the study period, after adjustment for inflation. The consistent rise in fees occurred despite the volatility in portfolio values and appears largely proportional to growth in portfolio size (appendix exhibit A5).
Investment income showed dramatic year-over-year fluctuations, while net patient revenue growth remained relatively flat Investment income growth rates ranged from –16% in 2010 to +113% in 2023, with particularly large swings occurring in 2013 (+56%), 2014 (+61%), 2017 (+84%), 2021 (+59%), and 2023 (+113%). Compared with the investment income, net patient revenue showed consistently minimal growth, with annual changes hovering near and occasionally dipping below 0%.”
Study: Price variation in cardiac care services: “This cross-sectional study used April 2025 TIC data from a third-party vendor reflecting 2023 contract year claims. The dataset included approximately 6.7 million professional and 104,563 facility price points for 32 common cardiology services across 4 major commercial insurers (Blue Cross Blue Shield, UnitedHealthcare, Aetna, and Cigna Healthcare), representing 78% of the commercial insurance market. The sample covered 51 568 physicians and 4128 facilities nationwide.
In this cross-sectional study of April 2025 Transparency in Coverage price data collected by a third-party vendor from 4 major insurers, facility prices for cardiology services showed substantially greater variation than professional fees. Median facility prices for some procedures—such as implantable cardioverter-defibrillator insertion—ranged from $6674 to $36 269 across payers, with a median facility price for coronary angiography of $7683 across states.
Commercial Price Variation for Common Cardiovascular Services Across 4 Major US Insurers July 16, 2026 https://jamanetwork.com/journals/jamanetworkopen/fullarticle/2851713?
Price Transparency: Drugs vs. Hospitals: “… Hospital care accounts for 31% of all national health spending compared with 9% for retail prescription drugs (not including physician-administered medications). 40% of the increase in health spending from 2022 to 2024 was driven by hospitals vs 11% from retail prescription drugs.
Even though the US spends more per person on health care relative to other high-income countries, it is not because individuals in the US use more health care—the US is below average for physician visits, hospital discharges, and for hospital length of stay. Higher health care spending in the US compared with other countries is due to higher prices, including hospital care.
Because of the nature of insurance benefit designs—often with high co-pays and coinsurance for retail drugs—out-of-pocket spending is actually higher for drugs ($54 billion in 2024) than for hospital care (almost $41 billion). Hospital bills can be expensive, but most of the cost is covered by insurance. People who are hospitalized may reach the out-of-pocket maximum for their insurance, with the insurer paying 100% of the cost beyond that…. Hospital margins are relatively modest industry-wide, but the operating costs of hospitals are not a law of nature resistant to change. Prices paid to hospitals by private insurers are more than 2 and a half time what Medicare pays. There is substantial variation in hospital prices across the country and even within states, driven in large part by consolidation and market power, suggesting there is room for cost savings.”
Pew Study: Substance use hospitalization 2016-2022: Pew Charitable Trusts researched national- and state-level trends in hospitalizations associated with substance use.
- The number of alcohol-involved hospital stays reached an estimated 1.8 million in 2022, far outpacing those involving opioid and stimulant use and nearly reaching the estimated number of admissions involving COVID-19 (2 million) in the same year.
- Stimulant-related hospital stays are on the rise and were the second most common type of stay examined in 24 out of 40 states in 2022—up from eight out of 38 states in 2016.
- Approximately 1 in 5 opioid-related stays ended in a discharge against medical advice in 2022, with undertreated pain and withdrawal symptoms, stigma, and restrictive hospital policies likely to have contributedto these discharges.
An estimated 1.8 million hospital stays involved alcohol in 2022, the latest year analyzed—nearly as many as those that involved COVID-19.
How Hospitals Can Help People with Substance Use Disorders | The Pew Charitable Trusts
AHA on H.R. 9645, the “Health Care Price Certainty for All Americans Act”: The bill codifies and expands healthcare price transparency requirements for hospitals, labs, imaging providers, ambulatory surgery centers (ASCs), group health plans/issuers and pharmacy benefit managers (PBMs). Hospitals are required to post all gross charges, payer-specific negotiated charges and discounted cash prices in a machine-readable file (MRF), as well as in a consumer-friendly format for at least 300 shoppable services, with updates at least annually. Hospitals must also post discounted cash prices in a publicly accessible location and submit attestations confirming the accuracy of the information. The HHS secretary is tasked with establishing uniform methods and formats for these disclosures by Jan. 1, 2028.
AHA Response: “We appreciate the committee’s interest in improving healthcare price transparency policies, and we support efforts to ensure the information available to the public is useful for patients, purchasers and policymakers. However, we are concerned that the legislation, as currently drafted, codifies regulations that do not seem to meet the healthcare price transparency goals sought by either patients or healthcare purchasers, while contributing to administrative burden in the healthcare system by continuing to require extensive investments by hospitals and health systems of staff time and other resources. “
AHA Statement on House Ways and Means Healthcare Legislation Markup Hearing | AHA
Insurers
MLR Rebates: “The Medical Loss Ratio (MLR) provision of the Affordable Care Act (ACA) limits the share of premium income that insurers can keep for administration, marketing, and profits. Insurers that fail to meet the applicable MLR threshold are required to pay back excess profits or margins in the form of rebates to individuals and employers that purchased coverage.
In the individual and small group markets, insurers must spend at least 80% of their premium income on health care claims and quality improvement efforts, leaving the remaining 20% for administration, marketing expenses, and profit. The MLR threshold is higher for large group insurers, which must spend at least 85% of their premium income on health care claims and quality improvement efforts. MLR rebates are based on a three-year average, meaning that rebates issued in 2026 will be calculated using insurers’ financial data in 2023, 2024 and 2025 and will go to people and businesses who bought health coverage in 2025.”
2026 Medical Loss Ratio Rebates https://www.kff.org/private-insurance/medical-loss-ratio-rebates/
Study: Prior authorization in Medicare Advantage plans: “Medicare Advantage plans use prior authorization to manage health care use. In recent years, these practices have come under intense scrutiny from policy makers. Using beneficiary enrollment data and contract-level prior authorization data from 2021, we documented three facts about prior authorization in Medicare Advantage. First, beneficiaries who live in different areas of the country enrolled in contracts with widely varying prior authorization rates. Second, Hispanic, Asian, Black or African American, and dual-eligible beneficiaries were disproportionately likely to enroll in plans with high prior authorization rates. Third, beneficiaries enrolled in contracts with higher prior authorization rates were more likely to disenroll from their contract—moving either to another Medicare Advantage contract or to traditional Medicare—than beneficiaries in contracts with lower prior authorization rates. Beneficiaries exposed to the highest quartile of prior authorization rates were 4.7 percentage points more likely to disenroll than beneficiaries exposed to the lowest quartile, a 44% difference. Higher disenrollment may suggest that beneficiaries are dissatisfied with plans that have higher prior authorization rates. Reducing overall rates of prior authorization could improve beneficiary retention in the Medicare Advantage program.”
Earnings Reports: Bellwether insurers
- UnitedHealth Groupreported results well above analysts’ expectations and substantially raised its earnings projection for the year, moves likely to bolster Wall Street’s belief in the healthcare company’s financial turnaround. Shares of UnitedHealth were up 6% in premarket trading Thursday. For the second quarter of 2026, UnitedHealth reported net income of $5.48 billion, or $6.04 a share. That compared with net income of $3.41 billion, or $3.74 a share, a year earlier. On the back of that strength, UnitedHealth raised its guidance for full-year adjusted earnings to a range of $19.50 to $20 a share, from a prior floor of $18.25. The FactSet consensus was $18.49
- Elevance: “The pressure on Elevance’s business is clear. Expenses have risen faster than revenue compared to a year ago, and margins in its large health benefits business are shrinking. It’s also losing members, with declines across most of its business lines. And while the company said it plans to grow per-share earnings by at least 12% next year, it said that growth would be off a baseline of $26 a share that excludes some items in its current-year guidance. The insurer’s shares slumped 12%when markets opened in New York, the largest intraday decline since January. They had increased 22% since the start of the year through Tuesday’s close, outpacing the gain in the S&P 500 Index.”
UnitedHealth Results Handily Beat Wall Street Expectations – WSJ
EBRI Study: Employee health plan choices: 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.
“Provider networks were the most important factor when choosing a health plan, outranking premiums and other plan features. Cost related considerations continued to play a central role in plan choice decisions across plan types. Traditional plan enrollees placed greater importance on lower out-of-pocket costs when receiving care, while high-deductible plan enrollees placed greater importance on lower premiums. Prescription drug coverage increased in importance compared with prior years. Despite widespread familiarity with consumer-directed health plans, concerns about out-of-pocket costs continued to be the most common reason traditional plan enrollees do not select these options.
Most HSA Holders Use Accounts for Current Expenses Rather Than Long-Term Saving ff-559-cehcs6-16jul26.pdf
Physicians
Medical malpractice premiums: In 2025, malpractice insurance premiums have risen for a seventh consecutive year, a trend not seen since the early 2000s.
Nearly 40% of reported premiums rose in 2025, up sharply from just 13.7% in 2018, though down from a peak of nearly 50% in 2024. Increases were widespread, but Pennsylvania and New York saw the steepest jumps. Although today’s rise is milder than the malpractice crisis of the early 2000s, the AMA cautions that a continued climb could eventually limit patients’ access to care.
Medical Liability Monitor https://medicalliabilitymonitor.com/rate-survey/
Kaufman Hall: Physician comp vs. productivity: “Physician productivity climbed 7% since 2023, according to Kaufman Hall’s latest Physician Flash Report, while compensation has risen only 6% and reimbursement has actually declined — a gap that’s pushing hospitals and health systems to lean more heavily on subsidies to keep physician pay competitive, even as the base numbers physicians see can obscure how that pressure is being absorbed.”
National Physician Flash Report: May 2026 Data
Physician Comp Legislation: “The Patients First Act of 2026 would tie yearly physician pay updates to the Medicare Economic Index, create a pilot program to reimburse primary care providers on a per-member, per-month basis, facilitate participation in Medicare advanced alternative payment models, and improve and streamline quality reporting and metrics. The measure incorporates many policies that medical societies have sought.
Notably, the legislation would ease the mandate that annual Medicare physician payment regulations be “budget neutral,” which requires the Centers for Medicare and Medicaid Services to offset new costs with cuts elsewhere. In current law, CMS can’t increase spending by more than $20 million a year; that would rise to $54.3 million under this bill and increase with inflation.
The bills’ sponsors are Reps. Dr. John Joyce (R-Pa.), Dr. Greg Murphy (R-N.C.) and Dr. Kim Schrier (D-Wash.), who are leaders of the GOP Doctors Caucus and the Democratic Congressional Doctors Caucus.
The bill arrived one day (July 14) after CMS proposed a 1.68% Medicare pay cut for doctors, continuing a trend that the American Medical Association says has lowered Medicare physician reimbursements by more than 30% since 2001, relative to inflation.
The proposed rule sets two separate conversion factors, as required by statute beginning in 2026: one for physicians who qualify as participants in an advanced alternative payment model, and one for those who do not. The proposed conversion factor for qualifying APM participants is $33.17, a decrease of $0.40, or 1.19%, from the current $33.57. The proposed conversion factor for non-qualifying APM participants is $32.84, a decrease of $0.56, or 1.68%, from the current $33.40.
The proposed decreases stem largely from the scheduled expiration of a temporary 2.50% conversion factor increase Congress attached to CY 2026 payments under the Working Families Tax Cut legislation. Without it, statutory updates alone would add 0.75% for qualifying APM participants and 0.25% for nonqualifying participants, plus an estimated 0.53% adjustment tied to proposed changes in work relative value units.
CMS proposed a multiyear shift away from relying on American Medical Association survey data to set practice expense relative value units, moving toward what the agency described as more objective, routinely updated cost data. The rule is open for public comment before a final version is issued later this year.”
Medicare physician pay rates would increase under House bill – Modern Healthcare
Polling
KFF Poll June 2026: “Health care costs top the list of voters’ health care priorities for the midterm elections, with half (51%) of all voters and more than half of Democratic (60%) and independent (55%) voters saying the issue is extremely important for candidates to talk about. At the same time, Trump administration statements about and actions targeting suspected health care fraud appear to be registering with Republican voters—more than half (55%) of whom say it is extremely important for candidates to discuss the issue of fraud in government health programs. “
HFM Vitalic Poll June 2026: “The invitation-only survey of 30 top experts across U.S. health systems, health plans, health tech, care transformation, consumer advocacy and the capital markets comes at a time when the urgency around healthcare affordability challenges is rapidly ramping up.” Findings:
Which stakeholder is best positioned to lead the movement for healthcare affordability?
- 33% a neutral convening body
- 27% no single stakeholder can lead alone Federal government
- 13% only policy mandate and scale can drive systemwide change
- 10% Employers– the dominant private purchasers with direct financial skin in the game
- 10% Technology and financial sector entrants —
- 3% disruption from outside is the only viable path Health plans and payers —
Is the current U.S. healthcare system financially sustainable?
- 90% NO
- 10% YES
Is the U.S. healthcare delivery model at, or within the next 3 years will it reach, an existential tipping point?
- 77% YES
- 23% NO
Vitalic-Affordabilty-Report_2026.pdf
Population Health
Dietary supplement use:” In the United States, 57.6% of adults older than 20 years report consuming a dietary supplement in the past 30 days. The most used dietary supplements across age groups of U.S. adults are multivitamins, vitamin D, and omega-3 fatty acids, with the most commonly reported goals of improving or maintaining overall health. Although more than half of Americans report consumption of dietary supplements, only one quarter of supplement users consume supplements that have been recommended by a health care professional (4). As many as 100 000 dietary supplements are available, and in 2025 the global market size for dietary supplements was estimated to be $209.52 billion
Prescription Drugs
BMJ Systematic Review: Obesity Drug efficacy Across 262 randomized studies published through November 2025, moderate- to high-certainty evidence showed weight loss with the following GLP-1 drugs at 1 year versus lifestyle modification alone:
- Tirzepatide (Zepbound): mean difference -14.9% (95% CI -16.0 to -13.9)
- Cagrilintide-semaglutide (CagriSema): mean difference -14.8% (95% CI -16.9 to -12.7)
- Orforglipron (Foundayo): mean difference -9.9% (95% CI -12.4 to -7.5)
- Subcutaneous semaglutide (Wegovy): mean difference -9.8% (95% CI -10.6 to -9.1)
“Obesity drugs produce variable weight loss at one year, with larger benefits generally accompanied by greater harms and discontinuation. Most agents do not improve quality of life meaningfully and few show cardiovascular benefits. Decisions in clinical practice should consider trade-offs between benefits and harms within the context of shared decision making.”
MFN Update: “As of May 2026, 17 pharmaceutical companies have agreed to provide most-favored-nation pricing in Medicaid in exchange for protection from pharmaceutical tariffs. Under the GENEROUS payment model, manufacturers would voluntarily provide supplemental rebates to participating state Medicaid programs for existing and future brand-name drugs if Medicaid’s net price exceeds the most-favored-nation price (second-lowest net price in Canada, Denmark, France, Germany, Italy, Japan, Switzerland, and the UK).”
Note: The authors estimate that 47 states and Washington, D.C., would see savings totaling $8.6 billion (34.7% of net spending).
Savings Under Most-Favored-Nation Pricing for Prescription Drugs in Medicaid July 15, 2026https://jamanetwork.com/journals/jama/article-abstract/2851704
Lilly CEO: Long-term strategy: “In 1876 Eli Lilly, a veteran of the civil war, founded a company in Indianapolis to bring scientific rigor to a medicines market awash with quack cures and miracle remedies. In doing so, he helped usher in the modern pharmaceutical industry. A century and a half later, the company that bears his name wants to reinvent it again.
It has the scale to try. Lilly is the world’s most valuable drugmaker and the first pharmaceutical company to be worth more than $1trn, joining a club mostly dominated by tech giants. Since the start of 2023 its share price has more than tripled. Analysts expect its revenue to grow by around 15% a year, on average, until the end of the decade, more than three times the median of its peers. Investors now value Lilly more like a tech giant than a drugmaker…
For many bosses, conquering one of the biggest markets in pharmaceutical history (obesity drugs) would be enough. Not for Dave Ricks, Lilly’s chief executive. In an interview with The Economist, Mr. Ricks laid out a grander plan. He wants to turn his company into a different kind of drugmaker: one focused on keeping people healthy rather than simply treating disease, while borrowing ideas about business from Silicon Valley…”
