Ten Out of Ten Dentists

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Ten Out of Ten Dentists

April 7, 2026

Welcome to TrustWorks On Call, here with your healthcare business and strategy 411 for the week. If you enjoy our work, please consider forwarding it along to a friend and encouraging them to subscribe.

This week, we bring you a special, dental edition of TrustWorks On Call. Teeth seem to be relegated to an afterthought in medical school, but the overlap of oral and systemic health is indisputable. While only nine out of ten dentists may recommend a given toothpaste, even the mythical “tenth dentist” agrees that dentistry is a form of primary care!

Making the case for medical-dental integration (MDI), we are going Beyond the Whiteboard to define MDI and its benefits, before Dialing In with a trio of experts from Olive Tree Advisory Group on their work integrating medical and dental practices. But first, we have some good news, and some bad news, related to MDI:

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Newsletter Tags:

dental, primary care, Q+A, CMS, oral health

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Behind the Headlines

Unpacking the forces driving healthcare’s biggest stories.

1. CMS adds oral health training incentives to MIPS.

In the 2026 Medicare Physician Fee Schedule Final Rule, the Centers for Medicare and Medicaid Services (CMS) introduced its first-ever Merit-based Incentive Payment System (MIPS) improvement activity focused on oral health.
Qualified physicians can now earn MIPS credits, which tie a portion of Medicare Part B payments to quality and practice improvement measures, by conducting oral-health risk assessments in primary care settings, educating patients on oral health, and making referrals to dental care for patients with oral health needs.

TrustWorks Take: By including oral health activities in MIPS, CMS is sending several messages to primary care physicians (PCPs). First, it incentivizes them to pay more attention to oral health during patient encounters. Second, it encourages PCPs to build stronger connections with dentists through referral networks. Third, it fosters the mindset that oral health is critical to overall healthcare, and worthy of physicians’ attention, rather than relegating it to dentists alone and requiring a separate appointment. PCPs are already accustomed to performing baseline assessments of highly specialized parts of the body before making a referral, and this rule change is an attempt to add the mouth to this list.

Of course, this rule change only goes so far, given that traditional Medicare lacking robust dental benefits. CMS has been expanding the number of medically necessary dental services Medicare Part B covers, but just under half of Medicare have no dental coverage and see a dentist less than once a year. An oral health referral from a PCP falls flat when the patient lacks dental coverage. If a dedicated dental benefit is the endgame for Medicare, this MIPS initiative is a small, but important, first step. The next could be to add routine dental preventive care as a Medicare benefit, as even one dental visit or cleaning per year greatly improve oral health and therefore overall health.

2. CMS proposes rolling back adult dental essential health benefit.

In the Notice of Benefit and Payment Parameters for 2027 Proposed Rule, which sets the standards for Affordable Care Act (ACA) marketplace coverage, CMS has proposed prohibiting exchange plan insurers from including routine non-pediatric dental services as an essential health benefit (EHB).
This proposed rule reverses a policy finalized by the Biden administration that would allow states to add adult dental services as an EHB for marketplace plans; the Biden-era rule was set to take effect in 2027 and now may not take effect.
CMS justified the proposed policy reversal by pointing to statutory requirements that the scope of EHBs “be equal to the scope of benefits provided under a typical employer plan.”

TrustWorks Take: The reasoning offered by CMS to roll back this rule is frustrating and circular. Routine adult dental services cannot be an EHB because employer plans, which often take their cues from federal health policies, do not "typically" cover them. If the Biden administration’s rule was allowed to take effect, more employer plans would follow the example set by state exchanges in adopting routine dental coverage. And on the flip side, employers could take its reversal under Trump as a cue to reduce or drop dental coverage.

Over 60 percent private dental insurance is employer-sponsored. On top of that, state Medicaid programs have expanded dental coverage significantly in recent years (a trend that may reverse due to impending Medicaid cuts). In other words, routine adult dental coverage is already fairly routine. Instead of allowing states to accelerate its normalization, the federal government is proposing to reverse course. Dental advocacy groups made it very clear they oppose this rule during its comment period, which has now closed, leaving us to wait for the verdict of the final rule.

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Beyond the Whiteboard

Visualizing key trends from the healthcare industry

The MDI Effect: Putting the Mouth Back in the Body
Starting with medical school and extending through nearly every aspect of the practice of medicine, from care delivery to insurance billing, the teeth are treated as if they are a separate part from the rest of our body. As any good dentist would tell you, this artificial separation is far from harmless, because oral health has a robust, two-way connection to systemic health. Medical-dental integration (MDI) offers an obvious, yet surprisingly rare, solution to this problem: medical and dental professionals sharing information and coordinating care with each other to improve the health of the population. Those that have taken this leap are reaping the financial, quality, and growth benefits, but too few organizations are taking advantage of MDI.

The case MDI can make to overcome the deep-rooted inertia that has kept dentistry practicing separately from the rest of the medicine is strong and simple:

Oral and systemic health share many risk factors and preventive benefits.
Patients are recommended to see their dentist twice a year for cleanings, versus seeing their PCP only once a year for annual physicals.
Any systemic conditions detected during these integrated dentist visits can be treated earlier, leading to cost savings and better outcomes.
Patients benefit from the convenience of accessing dental and primary care at once, generating consumer loyalty.

What an integrated practice looks like can vary from basic co-location to holistic collaboration, but more integration tends to result in stronger benefits.

To learn more about the budding field of MDI, we decided to talk to some experts in the field:

Infographic Tags:

dentistry, primary care, medical school, strategy, consumerism

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Dialing In

Sharing insights from our work with clients

Three Questions with the founders of Olive Tree Advisory Group:
Mark Schafer, MD, Randy Roisman, and Laurie Sicaeros
Olive Tree Advisory Group is a boutique healthcare consulting group whose expertise includes helping health systems and large medical groups design, develop, and implement medical-dental integrated (MDI) clinics.

1.) Why are medicine and dentistry separated in the first place?
MS: It all goes back to education, which has some historical explanation from back when we were first establishing our medical and dental schools. But now, the separation of oral health from the rest of medicine is just an unquestioned fact of medical life. When I was in medical school, I received almost no training on oral health or how dental conditions affect the rest of the body. Most doctors simply are not taught about the oral-systemic connection or what medical-dental integration even means. Dental schools teach more about the body than medical schools teach about the teeth, which makes it easier to pitch dentists on the benefits of MDI. That’s why they love to make the joke to physicians, “Did you know the teeth and mouth are actually a part of the body?”

In real practice, though, the connection is clear. There are research studies that document the link between periodontal disease and diabetes, cardiovascular risk, fertility, pregnancy-related concerns, Alzheimer’s, and multiple types of cancer. For example, preventive dental care during pregnancy alone has been associated with better maternal outcomes. Medical-dental integration supercharges collaboration and creates deep integration and uses that to improve patient care.

2) What inspired you to integrate medical and dental practices, and how have you operationalized it?
RR: The idea came from nearly two decades of experience leading a very large, multi-specialty dental group in the Los Angeles area. Many of those patients had complicated medical histories, which meant we were frequently consulting with the patients’ physicians before certain dental procedures.

Over time that raised a bigger question. If we are already coordinating care informally, why is the system not designed to support that collaboration?

I spent years studying the oral-systemic connection. After I transitioned to the medical side of healthcare in 2013, my focus shifted from essentially academic research to how integration could work at scale. Dr. Schafer, Laurie, and I found each other working together at a health system, and when we started exploring various integration options, we looked at different operational models such as building clinics, acquiring practices, or forming joint ventures. Ultimately, we successfully created one of the first integrated medical-dental practice models in the country, which served as the blueprint and proof of concept for the work we do at Olive Tree.

The health systems that tend to be a good fit are financially stable, interested in growth and a larger footprint, and led by teams thinking strategically about diversification, both in terms of service lines and revenue streams. It does not necessarily need to be a hospital system. A large medical group with a strong primary care footprint, multiple specialties, and a strong patient base is often enough.

3) Why should health systems pursue medical-dental integration, and what roadblocks should they expect?
LS: The value shows up in several ways. For health systems and large medical groups, medical-dental integration creates a broader strategic opportunity. MDI is about more than just care coordination. You can also see it as a thoughtfully adjacent service line, a new access point for patient acquisition and retention, and a way to diversify revenue while staying aligned with whole-person care and value-based objectives.

Regarding patient access, healthy patients who are on top of their care typically see their physician only once a year, while they see their dentist every six months. That creates more opportunities to identify issues early. You also cast a larger net for patients who struggle to access care. Roughly 30 percent of primary care patients do not have a regular dentist, and similarly many dental patients do not have a primary care physician.

For health systems, integration supports population health and value-based care by improving outcomes and reducing cost of care. Systems focused on growth can also benefit by expanding services, reaching new patients, and opening new clinics. Also, coming from a strategy role in health systems, I could not believe the margins dental practices typically run. A 15 to 20 percent operating margin is very reasonable for dental practices, whereas at a health system, it is a sign we need to check our math again!

The biggest roadblocks are structural. Medicine and dentistry still operate as separate industries. Electronic health records do not always line up, although there are now solutions for that. Some dental groups worry about losing independence, and there can be cultural challenges on the health system side, as well. We are not saying the integration is easy, only that it is very much worth it. When done well, medical-dental integration strengthens the overall enterprise.

Thank you for tuning into this week's TrustWorks On Call. We'll see you next Tuesday with another round of TrustWorks Takes. With your help in sharing TrustWorks On Call (subscribe here), we're living up to the "Collective" in TrustWorks Collective. And if you ever need help thinking through a healthcare problem, don't hesitate to reach out to us.

Finding a Reason to Smile,
Anthony D'Eredita and TrustWorks Collective

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File Two Lawsuits, Get One Free

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File Two Lawsuits, Get One Free

March 31, 2026

This week, we go Beyond the Whiteboard to project the coming changes to the insured population, and we’re Dialing In on the state of executive recruiting with a special interview. But first the news, featuring not one, not two, but three different lawsuits with significant healthcare implications:

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Newsletter Tags:

health systems, antitrust, PBMs, mental health, Q+A

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Behind the Headlines

Unpacking the forces driving healthcare’s biggest stories.

1. DOJ sues NewYork-Presbyterian over anticompetitive contracting.

The Department of Justice (DOJ) last week filed a civil antitrust lawsuit against NewYork-Presbyterian (NYP), New York City’s largest health system, alleging that NYP imposes plan restrictions in its contracts with payers that unlawfully insulate NYP from price competition.
According to the suit, NYP has allegedly prevented payers from offering budget-conscious insurance plans by requiring all of a payer’s plans to include NYP in-network and forbidding plans from offering lower copays to see rival providers.
The DOJ has been investigating NYP's contracting practices since last year, and the agency filed a similar suit against OhioHealth last month.

TrustWorks Take: The lawsuit’s introduction begins: “Healthcare costs weigh heavily on the minds and budgets of American families and businesses.” It goes without saying that these matters are also on the minds of politicians, as the Trump administration is trying to demonstrate to American voters its commitment to affordability in advance of the 2026 midterms. A survey in January found healthcare costs to be the top household expense families worried about affording, with 75 percent of voters saying it will impact their vote. Looking for levers to contain healthcare cost growth, the DOJ is using NYP and OhioHealth as examples to discourage certain health system contracting practices that allegedly make it harder for insurers to steer patients to lower-cost providers.

The political angle of these lawsuits does not mean they are without merit. The opaque nature of contracts struck between prominent or market-dominant health systems and insurers creates an opportunity and permission structure for collusion. Market consolidation often correlates with higher prices, and health systems have become increasingly concentrated. Researchers have estimated that a ten-percent increase in a health system’s market share correlates with about a $1,000 increase in charges per admission. Some of those price increases could reflect improved quality, but likely not all. Previous instances of federal antitrust suits against hospitals have ended with large settlements and contract changes, albeit no admission of wrongdoing.

Market-dominant health systems looking to avoid the DOJ’s eye should be finding ways to prove that health system consolidation can provide patients real value, not just higher prices. Regulators, for their part, should try to identify which systems are wielding their market share for anticompetitive means, versus those using that market power to launch a comprehensive, value-forward solution.

2. CVS, Cigna settle with FTC over insulin pricing.

Last week, the Federal Trade Commission (FTC) and CVS Health, on behalf of its pharmacy benefit manager (PBM) Caremark, filed a joint motion to dismiss the FTC’s antitrust case against CVS, as the two sides have reached a tentative settlement.
In September 2024, the FTC sued the three largest PBMs—CVS’s Caremark, Cigna’s Express Scripts, and UnitedHealth’s OptumRx—alleging that their rebating practices were anticompetitive and artificially inflating the list prices of insulin, resulting in higher costs for patients.
Cigna reached a settlement with the FTC in February, agreeing to delink its compensation from the rebates it negotiates with drugmakers, and change its drug benefit designs to no longer prefer higher-priced drugs, without having to admit wrongdoing or pay any monetary penalties.
The final terms on CVS’s settlement are still pending, but they are expected to closely match Cigna’s deal; UnitedHealth is the only party from the original lawsuit that has not announced a settlement agreement.

TrustWorks Take: The FTC expects its settlement with Cigna will “drive down patients’ out-of-pocket costs for drugs like insulin by up to $7B over 10 years.” Despite this, Cigna executives told investors that the settlement will not affect the company’s future earnings. Cigna has already been moving its employer clients from a post-sale rebate model to a point-of-sale net-discount model, which delinks Cigna’s compensation from drug prices and rebates. CVS has been making similar changes at Caremark, meaning it can also assure its investors that the settlement’s potential reforms are only expected to have a “nominal impact on company earnings.” If the FTC’s $700M in annual savings for patients ever materialize, the PBMs do not expect it to come from their earnings.

The predicted savings of delinking PBM compensation from list prices are supposed to come from all three intermediaries between drugmakers and patients: PBMs, wholesalers, and pharmacies. However, pharmacies are already complaining that Express Scripts’ revised contracts are significantly worse following the settlement, which has “a lot of loopholes” and fails to sufficiently protect community pharmacies. Rather than stomach losses in their own bottom lines, PBMs have proven very capable at flexing their market share to pass along margin hits to other parties. In light of such tactics, more carefully targeted regulations that go beyond the PBM reforms Congress passed in January may be needed to reduce the sway PBMs hold over the drug supply chain.

3. Meta, YouTube found liable for mental health damages.

Last Wednesday, a jury in California Superior Court found Meta, the parent company that owns Facebook and Instagram, and YouTube, the video streaming platform owned by Google, were negligent in designing their platforms and liable for the harm they caused the plaintiff, a partially anonymous 20-year-old woman identified as K.G.M.
Meta and YouTube owe the plaintiff about $4M and $2M respectively for compensatory and punitive damages, on the grounds that the platforms themselves, rather than the content hosted on them, were designed to addict young users and contributed to the plaintiff’s anxiety and depression.
TikTok and Snap, which owns Snapchat, were included in the original lawsuit but settled out of court.
Tech watch dog groups are celebrating that “[t]he era of Big Tech invincibility is over,” but have cautioned that this is only the beginning of a longer battle, including appeals proceedings for this case and the fate of many others working through the courts.

TrustWorks Take: Every discussion of Gen Z's relationship with healthcare (including ours) starts with declining mental health and reliance on social media. The prosecution in this trial attempted to connect these traits by painting social media companies as responsible for addicting and harming their users, in a deliberate parallel to the legal arguments that curtailed Big Tobacco in the 1990s. Unlike TikTok and Snap who settled, Meta and Google took this case to court because they expected to win and nip this problem in the bud. The $6M of damages are not even a rounding error to the tech giants, but the precedent set by this victory could snowball into class-action lawsuits and cases filed by state and federal attorneys general. Holding social media companies liable would also only be a first step toward restitution. To prevent further harms, these companies will have to make internal policy changes, from imposing age minimums to rolling back addictive features, or else wait for regulators to impose these changes on them.

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Beyond the Whiteboard

Visualizing key trends from the healthcare industry

Uninsured Rate About to Rise Sharply
Last month, the Congressional Budget Office (CBO) updated its baseline projections of health insurance coverage by source for the first time since June 2024. In the intervening time, Congress reduced federal health insurance payments by roughly $1.5T over the next decade, including $1T in Medicaid cuts from last year’s budget reconciliation package, and the $350B in Affordable Care Act (ACA) enhanced subsidies that Congress opted not to renew. Taking these massive policy changes into account, the CBO projects that by 2036 Medicaid enrollment will drop by 11.5M (14 percent of the current level), ACA exchange enrollment will fall by 7.5M (33 percent of the current level), and the uninsured population will grow by 10.8M (41 percent higher than the current level). These changes will not be spread evenly over the next ten years, as the ACA cuts are already taking effect and will hit an enrollment low in 2028, before gradually improving under stabilized market conditions, while the Medicaid cuts begin to phase in next year. About half of the people losing Medicaid or ACA coverage are expected to become uninsured after not finding coverage elsewhere. Even if the next presidential administration makes it a day-one priority in 2029 to reverse these cuts and restore federal healthcare funding, 10M people will have already lost their health insurance.

Infographic Tags:

ACA, Medicaid, uninsured, OBBBA, Congress

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Dialing In

Sharing insights from our work with clients

Three Questions on Executive Recruitment with Rosie Saenz
Rosie Saenz is an Executive Search Consultant with Morgan Consulting Resources. MCR works with health plans, medical groups, and health systems to recruit leaders from Directors through the C-suite. We have gotten to know Rosie through our partnership with MCR on Interim Executive Management and Executive Search and Recruitment services, so we interviewed her to shed some light on the state of her field.

1. What has changed about the executive search field these days?
The current administration’s cuts to Medicaid funding and tightening of eligibility have really shifted things to prioritize operational excellence under difficult conditions. Organizations are under serious pressure to optimize operations and protect financial performance, so they’re looking for a different profile than they were two or three years ago. There’s strong demand for leaders with deep expertise in value-based care, reimbursement strategy, and financial resilience. CFOs with experience in state funding models and cost containment are particularly sought after. Health plans dealing with tighter margins from lower enrollment also need leaders who can work effectively with state regulators. That’s become a real priority.

2. What are the main challenges in filling these roles?
Two situations make our job harder than usual. One is when an organization is heading into rough waters, financially. If a health plan just lost a Medicaid contract and is fighting it, you’re recruiting into a difficult situation. You need someone who can keep the team engaged even when things look uncertain, and who has the external skills to deal with attorneys and state governments. The other is replacing a CEO who’s been there 20 or 30 years. That kind of tenure leaves a real cultural gap, and the institutional knowledge and trust they built up does not just transfer to whoever comes next.

3. How do you identify the best candidate for a role?
For candidates that meet the baseline requirements of experience and education, what distinguishes the top five percent in a highly competitive search are the less-tangible qualities: strong cultural alignment, demonstrated energy and drive, genuine enthusiasm for the organization’s mission, and a proven track record of achieving outcomes similar to those the organization is striving to accomplish. Mutual fit is often the deciding factor. Because we have relationships with the candidates in our system, we know which ones have the right motivation and communication style to lead a mission-driven organization, for example. It does not matter how talented and qualified a potential leader is if they are a bad fit with the organization’s culture.

Thank you for tuning into this week’s TrustWorks On Call. We’ll see you next Tuesday with another round of TrustWorks Takes. With your help in sharing TrustWorks On Call (subscribe here!), we’re living up to the “Collective” in TrustWorks Collective. And if you ever need help thinking through a healthcare problem, don’t hesitate to reach out to us.

Resting Our Case,
Anthony D’Eredita and TrustWorks Collective

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Merging Like It’s 2023

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Merging Like It's 2023

March 24, 2026

Celebrating our return after a nice week off from newsletter writing, this week we go Beyond the Whiteboard to show how major payers make their money, and we’re Dialing In on why systems still do not use APPs to the fullest. But first the news, starting with the big cross-market merger that feels like a throwback to three years ago:

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Newsletter Tags:

mergers, health plans, vaccines, payers, workforce

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Behind the Headlines

Unpacking the forces driving healthcare’s biggest stories.

1. Allina Health intends to join Sutter Health.

Last Tuesday, Sacramento, CA-based Sutter Health and Minneapolis, MN-based Allina Health announced they signed a Letter of Intent to form a combined $26B not-for-profit system with 39 hospitals operating in Northern and Central California, Minnesota, and Wisconsin.
Under the deal, which the systems hope to close by the end of 2026 pending regulatory approval, Allina Health would become the Upper Midwest Division of Sutter Health and receive a $2B investment from Sutter, while retaining its original branding and headquarters.
The systems believe their complementary strengths—Sutter’s connection to “AI and platform development” in Northern California and Allina’s relationship with Minnesota’s “med-tech and engineering” hub—will position the combined system as “a national leader in digital and technological advancements.”

TrustWorks Take: Sutter has been publicly broadcasting its desire to access markets outside of California, so this deal does not come entirely out of the blue. Due to strict regulatory and labor protections producing high facility costs, California is perhaps the most expensive state for operating a healthcare business. On top of that, Sutter has settled on multiple class-action antitrust lawsuits totaling over $800M in recent years. Meanwhile, Allina has lost money on operations the last two years but is the market-share leader in the greater Minneapolis area. So, despite the press release speaking to tech synergies, this deal is more about geography and economics. Sutter has the capital Allina needs to do margin improvement, and Allina is well positioned in a market that allows Sutter to grow outside of California’s regulatory and cost structures.

However, this announcement still comes as a surprise because large cross-market hospital mergers, such as this one, already had their moment in the sun. In the wake of COVID’s disruptions, and wary of heightened antitrust scrutiny around mergers with overlapping service areas, systems interested in M&A began looking further afield, resulting in the combinations like Intermountain-SCL Health and Advocate Aurora-Atrium. The problem with these cross-market mergers is how difficult is it to translate their theoretical benefits, ranging from back-office efficiencies to intellectual economies of scale for best practices, into meaningful results for their patients and providers. Indeed, initial research suggests that cross-market hospital mergers are associated with price increases without quality improvements. Recently combined systems may just need more time to complete the difficult work of integration, but if the public benefit of cross-market mergers continues to remain in doubt, they may fall under the same umbrella of scrutiny as other vehicles for provider consolidation.

2. Providence looks to divest its health plan.

Providence, a Renton, WA-based not-for-profit system with 51 hospitals, announced last Thursday that it was “actively exploring” the sale of its Providence Health Plan (PHP), among other strategic options.
PHP’s membership dropped from about 700K at the end of 2024 to 440K in January of this year, after the health plan switched Providence employees to an Aetna-administered plan, saw its Medicare Advantage (MA) star rating decline to 3.5, and posted a $102M net loss in 2025.
Providence has been undertaking a multiyear financial turnaround, rising from a -8.8 percent operating margin in 2022 to a -2.1 percent margin in 2024, before finally achieving a positive margin in Q3 2025.

TrustWorks Take: A decade ago, provider-sponsored health plans (PSHPs) felt like they were having a moment, as health systems sought to diversify revenue by taking on risk and tap into the booming MA market, which was highly profitable for health plans. By 2022, 31 percent of health systems offered a PSHP, and Providence was a leading example among them, highlighted for its direct-to-employer deal with Intel. However, PSHPs have recently struggled alongside other regional insurers, dealing with the same higher utilization and reduced MA margins as national insurers but without the cushion of scale. While many insurers are looking to reset by scaling back their offerings, Providence hopes to cut its losses altogether.

Providence is only the latest system to explore offloading its PSHP, and no one is talking about launching new PSHPs. They are expensive to start, difficult to grow, and naturally capped by the health system’s service area. Traditional insurers face no such restraints and have reached higher tiers of scale, giving them a larger risk pool and better access to technology to predict utilization and manage spending. (For context, when PHP’s total enrollment peaked at 700K in 2024, UnitedHealthcare had 9.4M enrollees in MA alone). Some mature PSHPs may continue to succeed thanks to operational efficiencies and good markets, but the fact that 31 percent of health systems had health plans in 2022 is now looking like a high-water mark as PSHPs recede to be more of a niche product.

3. Judge restores previous childhood vaccine schedule.

Last week, a Massachusetts district court judge temporarily blocked several changes to federal vaccine policy from taking effect, restoring for now the childhood vaccine schedule from before Robert F. Kennedy Jr. became Secretary of Health and Human Services (HHS).
Last July, six medical associations, including the American Academy of Pediatrics (AAP), sued to stop Secretary Kennedy’s decision to no longer recommend COVID vaccines to children and pregnant women; they have since tacked on more complaints, such as Secretary Kennedy firing and replacing every member of the Advisory Committee for Immunization Practices (ACIP).
Judge Murphy ruled that the plaintiffs were likely to show that Kennedy had violated the Administrative Procedures Act by improperly reconstituting ACIP and by issuing a new childhood vaccine schedule without consulting ACIP.

TrustWorks Take: This ruling is only a temporary stay while the Massachusetts district court decides the case and determines an appropriate remedy. Since the Trump administration is almost certain to appeal, the Supreme Court will have the option to decide the fate of Secretary Kennedy’s vaccine policies. So, while public health advocates celebrate their wins when they get them, this district court ruling should not be taken as a return to the status quo for vaccines. Instead, it introduces even more uncertainty. State and local governments and payers have already lost their single source of truth for vaccine recommendations. Even if HHS restores the original childhood vaccine schedule, they may keep looking elsewhere for their vaccine schedules and coverage decisions. The damage to institutional credibility has already been done, and there is likely nothing a judicial order can do to fix that.

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Beyond the Whiteboard

Visualizing key trends from the healthcare industry

Payers and PBMs are One in the Same
For years, much of the consternation around the vertical integration strategies of payers has focused on their moves in the provider space: CVS Health buying Oak Street Health, Humana buying Kindred at Home, and UnitedHealth Group (UHG) buying enough physician groups to be affiliated with at least 90K, or 10 percent of all US physicians. UHG’s care delivery ambitions are serious, but looking at the 2025 audited financial results for four of the largest publicly traded payers shows the real story of vertical integration does not run through providers. Humana, Cigna, CVS, and UHG all earn more revenue from their pharmacy than their provider businesses; Cigna and CVS even earn more from pharmacy than their insurance businesses. It is no coincidence that these four companies also operate the four largest pharmacy benefit managers (PBMs), controlling 87 percent of the market between them. PBMs are often accused of lacking transparency, and one reason for that is that the health insurers they contract with to manage drug benefits and split the manufacturers’ rebates with are often under the same parent company. Congress recently enacted some PBM reforms intended to reorient the PBM business model away from their worst practices, but as long as a conflict of interest exists between payers and PBMs, there will be a danger of savings intended for patients instead being retained by vertically integrated middlemen.

Infographic Tags:

payers, PBMs, pharmacy, vertical integration, data

*|END:IF|*

Dialing In

Sharing insights from our work with clients

What Still Holds APPs Back?
Health system C-suites and boards have received the memo by now that Advanced Practice Providers (APPs) are essential to care delivery, a necessary answer to the physician shortage question, and a key lever for efficiency. But as I saw recently with a system in need of a physician compensation overhaul, when you look under the hood, you see this rhetoric around APPs may not live up to reality. Despite the system’s nominal strategy, its individual practice centers varied greatly in how they used their APPs, meaning the preferences of individual supervising physicians informally overrode official system policies. Some centers had their APPs operating at top of license, but too many were wasting away potential productivity by treating them as mere assistants to the physicians.

My diagnosis for systems like this is insufficient commitment to an organization-wide care model. A care model is systemic and exhaustive, not subject to the variances of individual preferences. In modern care models, all APPs work at top of license in collaboration with physicians to manage combined panels. They should also be billing for full reimbursement where insurance allows, although insurance restrictions can be a real constraint on revenue (e.g. if only 85 percent reimbursement is allowed) and a meaningful barrier to full APP adoption. APP compensation should also be modeled after physician compensation, with performance-based incentives, not just salary. Finally, they should enjoy all the same technology, with AI serving as a perfect extender for their top-of-license care. In today’s market where physicians are growing scarce, APPs can not only help meet market demand, but also could, with right reimbursement structures, alter underlying economics. In my experience, APPs rarely fail in practice, but are often failed by inadequate design. If their role is not codified it as part of the care model, it becomes a variable physician preference masquerading as strategy.

Thank you for tuning into this week's TrustWorks On Call. We'll see you next Tuesday with another round of TrustWorks Takes. With your help in sharing TrustWorks On Call (subscribe here), we're living up to the Collective in TrustWorks Collective. And if you ever need help thinking through a healthcare problem, don't hesitate to reach out to us.

See You in the TSA Line,
Anthony D'Eredita and TrustWorks Collective

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Therapy Talk

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Therapy Talk

March 10, 2026

A programming note before we begin—the newsletter will go dark next week before returning to your inboxes on Tuesday, March 21. If you miss us while we are gone, you can always check out our library of Insights on our website.

This week, we go Beyond the Whiteboard to show the inadequacy of Medicare ACOs, and we’re Dialing In on health systems’ quiet recovery. But first the news, starting with a splash behavioral health acquisition:

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Newsletter Tags:

behavioral health, AI, HCA, Medicare, strategy

*|END:IF|*

Behind the Headlines

Unpacking the forces driving healthcare’s biggest stories.

1. UHS to acquire behavioral health provider Talkspace.

On Monday, for-profit health system Universal Health Services (UHS) announced a definitive agreement to acquire Talkspace, a virtual behavioral healthcare company, for $835M.
UHS’ behavioral health division, which includes over 300 inpatient facilities, is the company’s largest, but has faced slowing growth; Talkspace’s network of 6,000 virtual care providers is expected to extend UHS’s outpatient behavioral health footprint.

TrustWorks Take: This deal has an intuitive strategic sense, especially compared to the “scale for scale’s sake” horizontal mergers and “revenue diversification without solid plans for integration” vertical mergers we have grown used to in recent years. UHS is the dominant national player in inpatient behavioral healthcare, but its outpatient footprint is more limited, and there is a shortage of behavioral health providers to hire for organic growth. Talkspace, after riding the pandemic’s direct-to-consumer (D2C) virtual care wave, eventually pivoted to a profitable business-to-business model focused on employers and health plans. This model afforded Talkspace a more sustainable revenue base, but it likewise was running into limits on volume growth. By buying Talkspace, UHS greatly extends its ability to follow up with patients discharged from its inpatient facilities, along with a potential boost to inpatient referrals from patients already seeing Talkspace providers.

The COVID pandemic unlocked a latent demand for both behavioral health and virtual care, which proved to be a natural pairing in need of a business model. Consumers liked the virtual behavioral health experience, but not enough to sustain pure D2C businesses. Talkspace found success pitching itself to employers, and studies have shown that comprehensive behavioral health programs can lower costs for employers by shifting care to lower-cost settings and earlier interventions, while reducing employee burnout and improving productivity. The dilemma UHS will now face is that Talkspace’s main benefit to employers was to reduce downstream utilization at inpatient behavioral health facilities, many of which UHS operates. UHS is touting its full continuum of services with this deal, but it needs to stitch them together in a way that does not cancel out each other’s respective strengths.

2. Amazon, CVS building AI scheduling platforms.

Last week, Amazon unveiled Amazon Connect Health, a platform of agentic AI tools intended to help both patients and providers.
For patients, Amazon’s platform assists with scheduling appointments and verifying patient identity; for providers, it can generate patient health record summaries, ambient documentation, and medical coding suggestions.
CVS, which announced its Health100 consumer engagement platform last year, also shared last week that Health100 will be built in partnership with Google Cloud.
CVS plans for Health100, which will launch sometime this year, to allow patients to schedule appointments in an “open ecosystem” of providers and help manage acute and chronic conditions.

TrustWorks Take: If you strip away the buzz words in their press releases, these moves by Amazon and CVS resemble a previous cycle of “consumer engagement platform” plays, when everyone wanted to launch a mobile app that served as the front door for accessing healthcare. Agentic AI is the new and powerful tool that could make these products catch on after the previous generation of apps largely failed to, but redesigning a “smarter” front door will not change what is behind it. Patients are frustrated with the process of scheduling healthcare appointments largely because of a lack of supply. Agentic AI might navigate the limited availability better than current resources, thereby winning some customer loyalty, but the provider productivity tools may produce more patient satisfaction in the long run.

A glut of products now promise to leverage AI to unleash physician productivity, so there is no reason to think Amazon’s suite of tools will be a gamechanger. But regardless of which companies “win” this market, the evidence is mounting that AI scribes are marginally improving physician productivity today, both in terms of documentation time and visit throughput. Physicians spending less time on documentation and more time seeing patients, which C-suites hope will translate to a more engaged physician workforce along with increased revenues. In contrast to the AI applications focused on better capturing customers, which tend to be zero-sum battles over market share, these productivity-boosting AI applications are the ones with the best shot of meaningfully changing the economics of care delivery. At some point, however, the cost savings of AI will also have to come from reduced labor spending, and health systems have never been cutthroat about firing people.

3. ACA subsidy expiration could cost HCA $600-900M.

Speaking last week at the TD Cowen Health Care Conference, HCA Healthcare CFO Mike Marks talked through how the for-profit health system was responding to the projected $600M to 900M earnings hit incurred this year by the expiration of the enhanced Affordable Care Act (ACA) exchange subsidies.
HCA expects its “resiliency program” will generate $400M in additional earnings to offset the exchange hit, through a combination of revenue, throughput, and cost-control initiatives, which have benefited from a “stable operating environment from labor."

TrustWorks Take: HCA’s laser focus on efficiency allows it to continue growing despite policy headwinds. Last year, HCA kept its labor cost growth to 5.4 percent while growing its revenue 7.1 percent. This “resilience program” was already in the works and, under better circumstances, would instead be framed as a “growth accelerator.” HCA’s response to good news and bad news will always be the same: improve throughput and lower unit costs.

What is more notable here is the size of the bad news. HCA’s projection of up to $900M in lost earnings this year, which equals about three percent of enhanced subsidies’ $30B annual cost, comes from two sources. The first, and more obvious, is the impact of people getting priced out of their ACA plan, not finding employer coverage, and becoming uninsured. HCA is also watching for the impact of bronze shifting, or people switching to plans with lower premiums and less coverage, on utilization. HCA is sufficiently large and sophisticated to track these changes as they play out across the year, but all providers will be feeling their impacts on utilization whether or not they can measure them directly.

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Beyond the Whiteboard

Visualizing key trends from the healthcare industry

Medicare’s Value Problem
As part of its 2021 Innovation Center Strategy Refresh, the Centers for Medicare and Medicaid Services (CMS) set a goal of having 100 percent of traditional Medicare (TM) beneficiaries in an accountable care “relationship” by 2030. At the time, about 13M beneficiaries were connected to an accountable care organization (ACO). Five years later, that figure has only risen to 14.3M, a paltry growth rate leaving about 60 percent of TM’s 34.7M enrollees still outside of ACOs. A new CMS program, dubbed “LEAD,” will replace ACO REACH, the second largest Medicare ACO program, at the end of this year, but tweaks and improvements are do not change the prognosis that CMS is very unlikely to achieve its 100-percent ACO participation goal.

Slow participation growth masks a deeper problem for Medicare ACOs. In 2024, the Medicare Shared Savings Program (MSSP), CMS’s largest ACO program with over 10M assigned beneficiaries, generated a total of $4.1B in earned savings. That same year, inclusive of TM and MA, Medicare spent $1.2T, meaning the MSSP saved less than half a percent of Medicare’s total budget. Even if 100 percent of TM beneficiaries were enrolled in the MSSP, that would amount to savings of around one percent at current efficiencies, a rounding error in total Medicare spend. A gap that vast demands a multitude of explanations (e.g. rebasing benchmarks penalizing success, a focus on primary care avoiding the real cost centers, and slow-walking downside risk and mandatory participation), many of which CMS has identified, but the agency has given no indication of recognizing how deeply inadequate this push toward value has been. Another decade at this growth rate will not move the needle, and it should not take another ten years of paltry results under a slightly different model to recognize that.

Infographic Tags:

Medicare, value, ACO, physicians, CMS

*|END:IF|*

Dialing In

Sharing insights from our work with clients

Humbly Successful Health Systems
Our work takes us to health systems large and small, thriving and struggling, in boon times and bad times. In the wake of COVID’s disruptions to volumes and labor costs, the industry as a whole took on an attitude of existential threat, defined by a “deteriorating” outlook from ratings agencies that led many to conclude that elevated labor costs would continue to swallow tepid revenue growth, preventing margin improvement. Then, dating back to perhaps late 2024, a new narrative started to emerge, shared only quietly and almost embarrassedly: a small but non-negligible number of health systems were doing quite well, posting five to ten percent margins with solid volume growth. This secretly successful few did not want to publicize their results in a tone-deaf way. We noticed they shared some common characteristics, such as regional dominance in high-growth (usually in the South and Southwest) markets, breadth and depth in their markets, and lower regulatory burdens, so we figured this was an example of a “K-shaped recovery,” where the rich get richer and the poor continue to decline.

Revisiting those whispered conversations now, it appears that the best-positioned health systems were the fastest to recover, but the “K-shape” was not quite accurate, as recovery was not reserved only for the most fortunate. The secret is out that many health systems are posting healthy, mid-single-digit margins and while there are significant structural crises facing certain kinds of systems, like rural healthcare providers, the median health system is not yet facing an existential threat. This could be considered cause to celebrate, but it is not a time to rest on one’s laurels and coast. The cross-subsidy business model, in which high-margin procedures performed on commercial patients cover the system’s losses on other payers and service lines, is still existentially threatened. The systems that use this time to gain efficiencies, deploy capital and technology with a long-term vision, and prepare themselves for a lower-reimbursed and outpatient-focused future will be the ones to retain healthy margins in the coming decade.

Thank you for tuning into this week’s TrustWorks On Call. As we’re going dark for a week, we will see you the Tuesday after next, March 21, with another round of TrustWorks Takes. With your help in sharing TrustWorks On Call (subscribe here!), we’re living up to the “Collective” in TrustWorks Collective. And if you ever need help thinking through a healthcare problem, don’t hesitate to reach out to us.

Springing Ahead,
Anthony D’Eredita and TrustWorks Collective

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Means to the Same End?

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Means to the Same End?

March 3, 2026

This week, we go Beyond the Whiteboard to show the generational impact on healthcare demand, and we’re Dialing In on Medicare’s fickle payment pilots. But first the news, starting with President Trump’s second nominee for surgeon general, Casey Means, facing serious questions about her lack of credentials after his first nominee, Dr. Janette Nesheiwat, was withdrawn for exaggerating her own:

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Newsletter Tags:

public health, payers, drugs, demographics, value

*|END:IF|*

Behind the Headlines

Unpacking the forces driving healthcare’s biggest stories.

1. Surgeon general nominee faces uncertain confirmation.

Last Wednesday, the Senate health committee held its confirmation hearing for Casey Means, a Stanford School of Medicine graduate turned social media influencer who is President Trump’s nominee for surgeon general; after the hearing, at least two Republican Senators, whose votes she needs to advance to a full confirmation vote, said they remained undecided.
Issues holding back Means’ confirmation include her lack of an active medical license, noncommittal stance on vaccines, and potential conflicts of interest from her career as a Make America Healthy Again (MAHA) influencer.

TrustWorks Take: The GOP-controlled Senate has pushed back only minimally on President Trump’s nominees, but healthcare has caused him the most trouble. His original nominee for surgeon general, Dr. Janette Nesheiwat, was withdrawn after she was found to have misrepresented her medical credentials. And Dr. Dave Weldon’s nomination for Centers for Disease Control and Prevention (CDC) director was sunk over his past statements on vaccine safety, leaving the CDC still without a permanent director. The steps taken by Health Secretary Robert F. Kennedy Jr. to upend vaccine policy have also been a source of tension for pro-vaccine Republicans, like Senator Bill Cassidy (R-LA), a medical doctor and the chair of the Senate health committee, who has refrained from publicly criticizing Secretary Kennedy’s leadership.

Casey Means’ long-delayed (partly due to having recently given birth) nomination for surgeon general now arrives as the Senate GOP is reevaluating how the MAHA agenda will impact the midterms. Once again, vaccine policy has taken center stage. Senator Murkowski (R-AK) questioned Means on her criticism of childhood hepatitis-B vaccinations, and remains a pivotal, undecided vote. Means’ significant lack of experience and inactive medical license, which President Trump’s first surgeon general believes should disqualify her from assuming the position, could also provide cover for Senators looking to oppose her nomination. And if she does earn the Senate’s confidence, she will be obliged to evolve her messaging from individual choice and “shared clinical decision-making” toward a societal understanding of public health. Her vision ought to forefront the people who do not have time to discuss everything with their doctor.

2. Major payers undergo leadership shakeups.

Last Thursday, Elevance Health announced several changes to its top management: CFO Mark Kaye is now overseeing Carelon, Elevance’s health services division, after its president announced his planned exit; and Felicia Norwood, who headed up government benefits, will now be responsible for all insurance operations as Chief Health Benefits Officer.
Former Optum CEO and longtime UnitedHealth Group (UHG) executive Heather Cianfrocco shared on LinkedIn last Friday that she was leaving the company after 24 years; Cianfrocco was Optum CEO from April 2024 to April 2025, when she was replaced by current Optum CEO Dr. Patrick Conway.
Breaking the news on Tuesday (just before this newsletter publishes), Cigna announced that David Cordani, its CEO of 17 years, will be transitioning to executive chair of its board of directors, with COO Brian Evanko succeeding him as CEO.

TrustWorks Take: Elevance and UHG both forecasted revenue declines for 2026, offering yet another bump in the road for these for-profit payers looking to regain investor confidence. In the last year, Elevance’s stock price has fallen 27 percent, and UHG's has dropped 38 percent, as the payers’ profits have declined thanks to higher-than-expected care utilization and stingier payments in Medicare Advantage (MA). From 2024 to 2025, Elevance’s operating margin on health benefits dropped from 4.2 to 2.5 percent, and UHG’s fell from 5.2 to 2.7 percent. In an effort to limit exposure to high-cost enrollees, UHG and Elevance, which cover the largest and fourth-largest MA enrollment populations respectively, both significantly reduced their enrollment in 2026.

Payers originally pursued vertical integration strategies to diversify revenues in the face of capped insurance profits, but their health services arms are struggling with profitability, too. Elevance’s provider business, Carelon Services, has posted a declining operating margin for two years, but its rapid revenue growth, roughly doubling since 2023, justifies a small decline in efficiency. Optum, on the other hand, saw its margin nearly cut in half, from 6.6 percent in 2024 to 3.5 percent in 2025, including its provider arm, Optum Health, losing money on operations last year. With MA's “golden goose” era ending, payers need their health services businesses to deliver profits more than ever. These leadership changes are part of a larger realignment to focus on company-wide margin improvement in place of their previous strategy of growth at (nearly) any cost.

3. FDA wants to bring drugs to market faster.

Last week, the Food and Drug Administration (FDA) proposed creating a new standardized pathway for drugs that treat rare diseases to be approved, since these treatments are not suited to large clinical-trial studies.
Earlier in February, the FDA lowered the number of rigorous clinical trials it required to approve a new product from two to one, hoping to prompt a “surge in drug development” by shortening the approval process.
Separately, the Commissioner’s National Priority Voucher Pilot Program (CNPV), announced last June and intended to provide “ultra-fast” approvals for “companies supporting US national interests," has reportedly caused alarm among FDA staff, some of whom have felt pressured to meet unreasonable review deadlines.

TrustWorks Take: Under Commissioner Dr. Marty Makary’s leadership, the FDA has pursued a deregulatory approach that should reduce the time and money it takes to bring a drug to market, at the expense of some consumer safeguards. Less thoroughly reviewed drugs will reach patients in need faster, but there will be heightened risks of undetected side effects making it into the market. For rare and serious diseases with few-to-no treatment options, this tradeoff is likely to be worth it.

The concern over the CNPV, on the other hand, is that the criteria by which the drugs are selected, as well as the expedited timeline by which they are approved, are opaque and possibly subject to political influence. If a CNPV drug that makes it to market is later revealed to have serious side effects or safety concerns, it could severely damage the public’s faith in what it means for a drug to be FDA-approved, which to this point has been a gold standard.

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Beyond the Whiteboard

Visualizing key trends from the healthcare industry

Millennials May Finally Save an Industry
Millennials, the generation of people born between 1981 and 1996, have been accused of “killing” every industry from restaurants to gyms, as cover for these industries failing to adapt to the consumption habits of what is now America’s largest generation. In an ironic twist, healthcare providers’ continued reliance on commercial plan revenues to “cross-subsidize” services “underpaid” by Medicare and Medicaid may remain viable for longer than expected, all thanks to Millennials. By 2030, all Baby Boomers will have turned 65 and aged into Medicare, and Generation X is too small to sufficiently replace the commercial volumes of Baby Boomers. However, the eldest Millennials are now turning 45, perhaps the unofficial start of the human body’s “breakdown years,” during which time a person’s healthcare needs and spending rapidly escalate. This presents significant revenue opportunities for providers able to meet this demand, but only if they meet Millennials where they like to receive care.

For example, Millennials are far less likely to have a primary care provider (PCP) than previous generations, in part due to having come of age in the era of high-deductible health plans. Inspired by these plans to seek care reactively rather than proactively, Millennials have a higher reliance on urgent care clinics and emergency departments, as well as a preference for going straight to specialists. A lifetime of paying for care out-of-pocket has led Millennials to internalize the logic that they are consumers first and patients second. The providers who can offer this generation the highest-value experiences will be the ones to retain their business, whereas those that refuse to evolve may go the way of napkins, formal dress codes, American cheese, and doorbells (and the list goes on).

Infographic Tags:

demographics, generations, utilization, out-of-pocket, data

*|END:IF|*

Dialing In

Sharing insights from our work with clients

Against “Acronym Du Jour” Policymaking
A physician I have known for decades decided a few years ago to step away from his large, suburban multi-specialty practice, move to the Finger Lakes in upstate New York, and practice primary care in an underserved area—his way of “giving back” while easing into semi-retirement. When we caught up recently, he had a bone to pick with CMS policymaking. “Have you heard about the latest acronym du jour? REACH is out, and LEAD is in. I cannot keep up with this anymore.” He was referring to a succession of Medicare accountable care organization (ACO) models, and I knew part of his frustration stemmed from his local community hospital having lost federal funding when CMS announced the early termination of “Making Care Primary,” a CMS pilot that was supposed to last ten years and was cancelled within two years. They have been encouraged to apply for LEAD, which he bemoaned as a “completely different model.”

After more than a decade of pilots, demonstrations, and rebrands, ACO participation is uneven, provider fatigue is real, and aggregate savings are incremental at best. Each new “acronym du jour” arrives with ambition and exits with a press release, scattered like seeds on barren soil. The models change faster than practices can retool their workflows, making it virtually impossible for communities and providers to invest in and deliver a different kind of care. But acknowledging underperformance of the models does not require declaring the entire project of value-based care a failure. The underlying premise that, by giving providers accountability for total cost and quality, we should reward outcomes over volume remains directionally right. What has been wrong is the tempo and the tenacity. Value-based care requires a different operating system, but instead we have been layering patches onto fee-for-service and wondering why performance remains unstable. You cannot redesign healthcare within a two-year demo window. Rather than chasing the next acronym, providers want commitments toward longer-term program stability, benchmark longevity, and sustained investment in care redesign.

Thank you for tuning into this week's TrustWorks On Call. We'll see you next Tuesday with another round of TrustWorks Takes. With your help in sharing TrustWorks On Call (subscribe here), we're living up to the Collective in TrustWorks Collective. And if you ever need help thinking through a healthcare problem, don't hesitate to reach out to us.

Stay Steady,
Anthony D'Eredita and TrustWorks Collective

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Quadruple 180

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Quadruple 180

February 24, 2026

This week, we go Beyond the Whiteboard to forecast the next ten years of healthcare volumes growth, and we’re Dialing In on the conflicting incentives limiting GLP-1 adoption.

But first, a programming note before we get to the news. As if commemorating the end of the Winter Olympics, the Trump administration has performed what we have deemed the rare “quadruple 180”—reversing its decision by agreeing to review Moderna’s flu vaccine, getting most of its tariffs struck down by the Supreme Court, dismissing yet another acting CDC director and replacing him with NIH director Dr. Jay Bhattacharya, and (perhaps most impactful to our lives as road-weary consultants) resuming TSA precheck after a threatened pause due to the government shutdown.

We will be keeping a close eye on these developments, but this week we have chosen to spotlight a few lower-profile stories with massive implications for healthcare:

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Newsletter Tags:

Medicare, payers, mergers, labor, outpatient

*|END:IF|*

Behind the Headlines

Unpacking the forces driving healthcare’s biggest stories.

1. Medicare Advantage enrollment growth slows again.

The Centers for Medicare and Medicaid Services (CMS) published data showing that, as of February 1, 2026, Medicare Advantage (MA) enrollment grew 3.2 percent in the last year, after a 4 percent increase from 2024 to 2025.
Humana gained 1.2M beneficiaries, the most of any insurer, whereas UnitedHealthcare and Elevance lost 930K and 325K respectively, the two largest declines.
MA Special Needs Plans (SNPs), which cater to specific chronic conditions, such as chronic heart failure and diabetes, or serve the Medicaid dual-eligible population, helped drive overall MA growth, increasing 12 percent year-over-year, and now cover nearly a quarter of MA beneficiaries.

TrustWorks Take: From 2007 to 2025, MA enrollment averaged 9 percent annual growth, increasing from 8M to 34M, or from 19 percent of eligible beneficiaries to 54 percent. Insurers’ projections of an enrollment contraction this year did not materialize, but two successive years of low and declining growth attest to their shifting perspectives on the program. Facing shrinking per-member profitability amid higher-than-expected utilization and declining reimbursement, large insurers have pivoted by exiting certain markets, tightening supplemental benefits, and focusing on their most profitable plans. As long as MA continues to cost taxpayers more than traditional Medicare, lawmakers and regulators are likely to keep ratcheting up the pressure on insurers. Their hope is that stingier plan payments will incentivize care management efficiencies, but it is easier for payers to tighten networks and claw margins back from providers than to generate cost-savings by proactively managing, say, an 80-year-old with Alzheimer’s disease.

It is also no coincidence that enrollment in SNPs, which receive higher per-capita payments, is rapidly growing at a time when regular MA plans are faltering as a source of insurer profitability. Chronic Condition SNPs (C-SNPs) grew by almost 500K members in 2025, after averaging less than 15K per year from 2019 to 2022, more in keeping with a change in insurers’ diagnosis and enrollment tactics, rather than an underlying change in population health. That UnitedHealthcare is responsible for over 50 percent of C-SNP enrollees, as compared to 29 percent of the total MA market, also suggests some gamesmanship from the recently beleaguered insurer. Expect SNP plans to be a target of increasing Congressional and regulatory scrutiny in response to their sudden proliferation.

2. FTC premerger rule in judicial limbo.

Earlier this month, a district court judge struck down a 2024 Federal Trade Commission (FTC) rule that substantially increased the amount of information merging parties had to submit to regulators, finding that the agency had failed to show how the benefits of the regulation outweighed “its significant and widespread costs.”
Last week, the Fifth Circuit Court of Appeals intervened to preserve the expanded Hart-Scott-Rodino premerger reporting requirements until at least this Thursday, February 26, while the court considers the FTC’s appeal.

TrustWorks Take: Healthcare mergers, especially among hospitals and health systems, were one of the primary targets of this Biden-era rule, leading the American Hospital Association to join the effort to overturn it. After the rule went into effect in February 2025, hospital M&A activity slowed significantly. (Other market trends and policy changes, along with general environmental uncertainty, have also contributed to this drop. Ironically, the district court's decision to vacate the rule, followed by the circuit court’s temporary stay, has created even more uncertainty to chill dealmaking activity, as merging parties may be advised to prepare documents under both the old and new rules while awaiting the court’s final ruling, or wait for more certainty.

These premerger requirements deterred dealmaking by tripling the hours it took to complete the filing, but they did not change the grounds upon which the FTC can reject a merger. Moreover, increased regulatory scrutiny of mergers is only one tool in the federal toolkit to combat what may be deemed anticompetitive behavior in healthcare. For example, the Department of Justice and the state of Ohio filed suit last week against OhioHealth, a 16-hospital not-for-profit system based in Columbus, OH, alleging that OhioHealth’s insistence on commercial insurance networks including all its providers has harmed policyholders and patients through inflated prices. If regulators cannot stop alleged monopolies from forming, they can still prosecute them for anticompetitive behavior after the fact. Although, in both cases, they do not have an exceptional record of success.

3. All NYC hospitals reach deals with striking nurses.

Last Saturday, over 4K nurses at NewYork-Presbyterian/Columbia (NYP/C) hospital voted to end their six-week strike, almost two weeks after the other 10K striking nurses from Mount Sinai Health System and Montefiore Medical Center returned to work.
NYP/C nurses stayed on strike after the other nurses ratified their contracts because of what they saw as inadequate commitment from the hospital to hire more full-time employees, creating a temporary rift between the striking nurses and union leadership.
The New York State Nurses Association (NYSNA), which represents the striking nurses, reached an agreement with all three health systems for a roughly 12 percent average salary increase over the three-year contract, as well as “safeguards against artificial intelligence,” commitments to maintain or improve staffing standards, and various other employment protections.
In related news, the 31K workers striking at Kaiser Permanente facilities in California and Hawaii since January 26 also reached a deal on Monday to return to work.

TrustWorks Take: Given that NYSNA reportedly opened negotiations requesting ten-percent annual salary increases, the ratified contracts’ four-percent annual salary increases landed somewhere in the reasonable middle. NYSNA is celebrating these contracts as a victory, whereas health systems issued congenial statements welcoming the nurses back to work. What should worry hospital leaders most, more than finding room for this round of wage and staffing increases, is the viability of NYSNA calling for another strike once this contract ends in three years. If it worked so well this time, with picket lines persisting despite record-cold temperatures, what is to stop the union from approaching the negotiating table more emboldened than before? In high-cost cities like New York, where nurses already command far higher salaries than the national average, there will always be a sense of precarity motivating escalating salary demands.

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Beyond the Whiteboard

Visualizing key trends from the healthcare industry

Ten Years of Site-Shifting Care Delivery
As gold-medal-game winning USA Olympic-team hockey players Jack Hughes and Megan Keller could tell you, a good strategy requires skating to where the puck is going, not where it has been. This is as true in healthcare as in hockey (even if the our industry moves at a comparatively glacial pace), which is why prognostications like Sg2’s annual Impact of Change Forecast are useful for long-term planning. The slowed growth of inpatient services, propped up by rising acuity in an aging population, and the continued expansion of outpatient services, unlocked by new technologies and regulatory changes, has been central to their forecast for years. The new rising star is home-based care, now projected to grow 32 percent by visit volume through 2035. These low-acuity visits will often be delivered by lower-license nurses to an aging and infirmed population, which will reward businesses focused on scale and efficiency more than sophistication. For most health systems, it would be unwise to ignore this emerging channel. For example, health systems evaluating whether and how to move procedural specialties to ambulatory surgery centers should consider this an opportunity to redirect post-op and follow-up visits to the home setting as a complementary low-cost, consumer-friendly option.

Infographic Tags:

outpatient, data, forecast, home, acuity

*|END:IF|*

Dialing In

Sharing insights from our work with clients

The Problem with Diagnosis-Based Reimbursement
Although TrustWorks is mostly focused on the delivery side of healthcare, I can count on and call on many friends and colleagues from “across the aisle,” in the insurance industry, to give it to me straight on how the other side thinks. While chatting the other week with one such colleague, who works near the top of a regional, nonprofit payer, I was not surprised to hear him say that his company is trying to pump the brakes on GLP-1 adoption. To him, “There are far cheaper alternatives, with far lower quit rates, that we prefer our commercial members try first. Even those who stick with them may not stick with us, so we won’t get the full benefit of a well-managed life.” Not my favorite way to think about healthcare, but a familiar argument from those who take seriously insurers’ responsibility to manage costs and “unnecessary utilization.” To his point, the cost of generic drugs managing hypertension and diabetes are a fraction of the cost of GLP-1s, for more than a fractional benefit.

He added that there was another issue at play for their MA population. “We get paid by the diagnosis. If these expensive peptides really do cure someone’s obesity or cardiovascular disease, then not only are we on the hook for the drug spend, but we also get punished with lower risk scores and reduced payouts.” This phenomenon is the opposite of what taking on risk is supposed to accomplish. I was stunned by my colleague’s admission, so he clarified that this was not official policy, but rather a cold, logical interpretation of the incentives currently present in our system. I cannot fault his analysis, but I can fight for a system where effective care is effectively incentivized. Moments like this are reminders of how far we have to go.

Awaiting LA 2028,
Anthony D'Eredita and TrustWorks Collective

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Camelot This Is Not

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Camelot This Is Not

February 17, 2026

This week, we go Beyond the Whiteboard on how healthcare is propping up the US job market, and we’re Dialing In on the challenges facing the locum tenens industry. But first the news, starting with our modern era’s uninspired reboot of the classic Kennedy mythos, Camelot:

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Newsletter Tags:

MAHA, vaccines, public health, ACA, labor

*|END:IF|*

Behind the Headlines

Unpacking the forces driving healthcare’s biggest stories.

1. RFK Jr. reshuffles leadership as FDA blocks vaccine review.

Last Thursday, in order “to accelerate adoption” of the Make America Healthy Again (MAHA) agenda, Health Secretary Robert F. Kennedy Jr. announced several leadership changes at the Department of Health and Human Services (HHS): Chris Klomp, the current Medicare director, will become chief counselor at HHS and oversee operations; John Brooks, Kyle Diamantas, and Grace Graham have been elevated to senior counselors advising Secretary Kennedy.
Earlier last week, Moderna shared that the Food and Drug Administration (FDA) will not consider approving its mRNA flu shot because its Phase 3 trial used a traditional flu vaccine as its comparator; the FDA letter, signed by prominent agency official Dr. Vinay Prasad, did not cite any specific safety or efficacy concerns.

TrustWorks Take: Reportedly, Secretary Kennedy is pivoting his agency’s focus away from his unpopular vaccine policies and toward his more-popular healthy eating campaign. The reshuffle reads like a bid to shore up voter support for the midterms. A survey of competitive districts last fall found that over 90 percent of voters believe the government should do more to regulate ultra-processed foods, whereas only 20 percent of voters support the removal of established childhood vaccine recommendations. The leadership changes, which have created a cabinet-style inner circle of Kennedy advisers, are likely intended to steer the ship of state in this new food-focused direction.

However, the FDA rejecting Moderna’s mRNA vaccine on unprecedented grounds (the FDA approved Moderna’s Phase 3 trial plan, only to refuse to review its results) proves the adage that personnel is policy. Dr. Vinay Prasad, who replaced Dr. Peter Marks after he resigned last May as leader of the FDA’s Center for Biologics Evaluation and Research, is a known critic of the COVID mRNA vaccine. Unless Secretary Kennedy, who largely shares the same beliefs on vaccines, replaces him, the development of mRNA vaccines will continue to be suppressed, even if the inner circle of HHS leadership tries to pivot their messaging focus elsewhere. As Moderna’s CEO delicately stated, this decision “does not further our shared goal of enhancing America's leadership in developing innovative medicines,” and will hold back a technology showing promise not just for infectious disease but cancer treatments as well.

2. Judge blocks federal cuts to public health in blue states.

Last Thursday, a federal judge in Illinois ordered a 14-day pause to allow the courts to decide on the Trump administration’s plan to rescind $600M of public health funding from four states led by Democratic governments: California, Colorado, Illinois, and Minnesota.
On February 9, the Trump administration announced the planned grant terminations, arguing the awards no longer align with updated CDC priorities; in response, the states sued, alleging the cuts were retaliatory and driven by "political animus" rather than program performance.
The judge ruled broadly that the states showed a likelihood of success and risk of irreparable harm, and that Trump administration could not terminate grants “based on undisclosed political priorities;” two thirds of the funding was dedicated to California’s public health system, with many of the grants focused on HIV and sexually transmitted infections, as well as promoting the health of underserved communities.

TrustWorks Take: In a similar move to our first story, the Trump administration is attempting to unilaterally unwind funds awarded under the prior administration to reflect a new set of priorities. These abrupt about-faces are a disaster for strategic business planning and emblematic of how the Trump administration’s preoccupations with combatting “wokeness” can get in the way of business-friendly policies. For healthcare organizations in these targeted states, even those not directly receiving these funds can still benefit from the preventative and complimentary care that these grants sponsor. The rescission of these grants would destabilize planning, staffing, and prevention infrastructure that health systems and community providers quietly rely on.

Targeting only blue states also underscores the capricious and cynical nature of the Trump administration’s actions. Are people living with HIV in blue states less deserving of support services than those living in purple and red states? (No, but their votes matter less.) Nor are these cuts limited to healthcare: another lawsuit has put $10B of childcare cuts to blue states on hold, as was an effort to freeze federal food assistance just in Minnesota. These haphazard efforts to combat wasteful spending have not amounted to significant fiscal savings, either, as projections of the federal deficit have increased since the second Trump term began.

3. CMS proposes significant changes to ACA regulation.

Last week, the Centers for Medicare and Medicaid Services (CMS) issued its proposed 2027 “Notice of Benefits and Payment Parameters,” which sets the standards for the Affordable Care Act (ACA) exchanges.
The 2027 Payment Notice, which is expected to receive thousands of public comments before finalizing this spring, seeks to expand catastrophic coverage plans, including raising their out-of-pocket caps, plan durations, and eligibility waivers; allow non-network plans, which pay providers a set amount for services and leave patients potentially making up the difference, to become qualified health plans on the exchanges; and impose a variety of other recordkeeping, reporting, and marketing requirements or restrictions.

TrustWorks Take: Early data show ACA exchange enrollment has dropped by over 1M people this year, due largely to the expiration of enhanced subsidies. These proposed changes to the ACA are the Trump administration’s response to Americans’ mounting concerns over healthcare affordability. Instead of subsidizing care, this approach relies on deregulation to allow people to choose plans that are cheaper upfront, albeit with increased risks of significant out-of-pocket expenses on the back end.

On its face, more options (when properly labeled and honestly marketed) should help consumers find the plan that is right for them. However, too many people switching to low-premium, high-cost-exposure plans could undermine the insurance market through adverse selection. There is also a flurry of intense industry lobbying and public commenting that is sure to take place before the rule is finalized, meaning anything in the proposed notice is subject to change.

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Beyond the Whiteboard

Visualizing key trends from the healthcare industry

Only Healthcare is Hiring
According to the Bureau of Labor Statistics January jobs report posted last week, of the 130k net jobs the US economy added January, an astounding 124K of those jobs came from the healthcare and social assistance industry. (To illustrate net jobs: last month, construction added 33K jobs, but the government lost 42K, for a net loss of 9K jobs.) Zooming out further, the healthcare and social assistance industry employs 1.6M more people than it did in January 2024; on net, the rest of the economy employs 28K fewer people. The healthcare subsectors with the largest job increases—social assistance, which involves direct care work with minimal specific training, and ambulatory health care services, which employs millions of medical secretaries and assistants alongside higher-licensed staff—are expected to continue growing as the population ages and healthcare shifts outpatient. They also have less exposure to AI automation, which alongside the effect of tariffs, is thought to be a primary contributor to the sluggish job market. AI is already far more capable of writing business reports (and newsletters) than it ever will be at changing diapers and bedsheets. Those tasks will remain safely within human hands for the foreseeable future.

Infographic Tags:

labor, economy, demographics, BLS, AI

*|END:IF|*

Dialing In

Sharing insights from our work with clients

Moving Locum Tenens Forward
Late last year, our TrustWorks team facilitated a locum tenens summit, hosted by Hallmark Health Care Solutions, a workforce technology vendor. The event brought agencies and health systems into the same room to discuss candidly what is working, what is not, and what it would take to improve our system for distributing temporary physician placements. From that day, I am convinced that to achieve its full potential, the industry has three fundamental challenges it needs to tackle: accelerating time to value, improving fee transparency, and identifying credible performance metrics, especially for comparing locum providers to employed staff. The reason we settled on these three issues is that resolving them should create win-win scenarios for health systems and agencies, who can otherwise feel opposed to each other.

The best part of the event may have been seeing that oppositional, “No, your side’s problem is…” thinking subside in real time. For example, addressing fee transparency simply meant having an adult conversation about what is being paid for. The conversation was mildly tense to begin with, but I could see shoulders relaxing and guards dropping as health system and agency representatives exchanged points and found agreement. Health systems want to forecast and have comfort in costs, and agencies want justify pricing based on service level and outcomes. Those goals are not at odds, but they are not served by the current system.

For more on this topic, check out Hallmark’s blog series on Fixing Locum Tenens, which featured my writing in Part 1.

Thank you for tuning into this week's TrustWorks On Call. We'll see you next Tuesday with another round of TrustWorks Takes. With your help in sharing TrustWorks On Call (subscribe here), we're living up to the Collective in TrustWorks Collective. And if you ever need help thinking through a healthcare problem, don't hesitate to reach out to us.

Ciao,
Anthony D'Eredita and TrustWorks Collective

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Rebate Bonanza

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Rebate Bonanza

February 10, 2026

Welcome to TrustWorks On Call, here with your healthcare business and strategy 411 for the week. If you enjoy our work, please consider forwarding it along to a friend and encouraging them to subscribe.

This week, we go Beyond the Whiteboard to discuss declining measures of societal trust, and we’re Dialing In on how to define partnership standards.

But first, before the news, we would like to extend our congratulations to all the winners of Superbowl Sunday: Seattleites and their Seahawks, Bad Bunny and his Puerto Rican (and Pan-American) compatriots, and the creative geniuses behind Novartis’s “Tight Ends” ad. Likewise, better luck next year for the losers: the New England Patriots and their faithful, and the concept of “real food” for having the MAHA Center and Mike Tyson as its champions.

With that out of the way, here are our top three (oddly rebate-centric) news stories:

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Newsletter Tags:

drugs, PBMs, 340B, consumers, physicians

*|END:IF|*

Behind the Headlines

Unpacking the forces driving healthcare’s biggest stories.

1. TrumpRx website launches.

Last Thursday, the TrumpRx.gov website went live, listing coupons for 43 brand-name drugs, at cash-pay prices ranging from $3 to over $5,500, depending on the drug and quantity supplied, to be redeemed through purchases at participating pharmacies or directly from drugmakers.
The website features drugs from only five manufacturers, with Pfizer making 31 of the 43 listed drugs, but the White House said that more drugs from other companies with pricing deals, such as AbbVie and Johnson & Johnson, will be added in the coming months.
Because TrumpRx does not take insurance, every drug is marketed with the following disclaimer: “This is an out-of-pocket price. If you have insurance, check your co-pay first—it may be even lower.”

TrustWorks Take: The drugs listed on TrumpRx fall into one of three categories: a worse deal than other cash-pay options, a good cash-pay deal but worse than most insurance, and a good deal even for many insured people. At least 18 the 43 branded drugs fall into the first category because they have cheaper generic alternatives available from either GoodRx or the Mark Cuban Cost Plus Drugs Company, which have thousands (rather than dozens) of medications on their rosters. The second category includes most of the other drugs, for which the TrumpRx price is still far higher than a typical insurance copay. One extreme example of this is Pfizer’s rheumatoid arthritis drug Xeljanz, available for $1,500 per month on both TrumpRx and GoodRx versus $20 per month with most commercial insurance plans.

The third category, the only one that benefits consumers, comprises two kinds of treatments that insurance is less likely to cover: obesity and fertility. The low-dose Wegovy pill, available for $149 per month, and EMD Serrano’s fertility drug Cetrotide, available for $22.50 per month, are meaningfully discounted from their list prices, commonly not covered by insurance, and (especially in Cetrotide’s case) may even be cheaper than when purchased through insurance, depending on the plan. Therefore, while the White House may be greatly overstating the benefits of TrumpRx to the American consumer, there are at least some drugs for which Trump’s dealmaking instincts could result in real household savings.

2. Government funding deal introduces PBM reforms.

The bill signed into law last week to end a brief government shutdown featured several important healthcare provisions: funding for the Department of Health and Human Services (HHS), a five-year extension of the Acute Hospital Care at Home waiver program, a two-year extension for other Medicare telehealth flexibilities, and a few items targeting the pharmacy benefit manager (PBM) industry.
These reform provisions, drawn from previously introduced legislation and effective in 2028, require that PBMs pass through 100 percent of rebates to commercial plan sponsors, but PBMs can still charge fees at their discretion; for Medicare Part D, these fees are further limited to “bona fide service fees,” which must be flat (i.e., not based on drug prices) and tied to a service actually performed by the PBM.
The law also adds significant transparency and reporting requirements, such as strengthening the ability of commercial plan sponsors to audit PBMs, and requiring all service providers to group health plans (not just PBMs) to disclose any compensation received in connection to a plan.

TrustWorks Take: Congressional lawmakers, who have heavily scrutinized PBMs in recent years, are talking about this law as only the first step in a larger salvo to rein in the inefficiencies and abuses of drug middlemen. For example, the law does not prohibit spread pricing, where a PBM charges a plan more than it pays a pharmacy, nor does it crack down on PBMs giving preferential treatment to their own affiliated pharmacies. Still, the rebate pass-through provisions, especially the stronger form covering Medicare Part D plans, are a great first step that discourages PBMs from gaming the rebate system to maximize their own compensation while driving up costs for plans and patients.

The major PBMs have also seen these reforms coming and have begun to pivot their business practices. Cigna, which owns the nation’s largest PBM, Express Scripts, just projected stable earnings potential despite both the passage of this law and a recent settlement with the federal government requiring Express Scripts to change some business practices. One reason these companies may appear nonchalant about these reforms is that, as one expert put it, PBMs “are very good at the whack-a-mole game” and will look to “come up with alternative ways to potentially try to get around this.” The onus is on Congress to ensure the law keeps up with whatever problematic business practices PBMs turn to next.

3. HHS abandons 340B rebate pilot.

The controversial 340B rebate pilot program that the Health Resources and Services Administration (HRSA) announced last June has now been scrapped after successive court rulings concluded it likely violated the Administrative Procedure Act.
The American Hospital Association and other plaintiffs sued HHS last December to stop the program, which would have tested allowing drugmakers to charge 340B hospitals the full price for certain drugs and issue the 340B discount, typically ranging from 25 to 50 percent, as a rebate upon proof of compliance.
The pilot was set to begin on January 1, but a district court judge ordered a preliminary injunction on the program, which an appeals court upheld, leading to HHS to ask the courts to let HRSA start over on any potential rebate program.

TrustWorks Take: The endless litigation over 340B is a product of the program’s rapid expansion, growing an astonishing 23 percent in 2024 to reach $81B in discounted purchases, combined with the incompetence of HRSA, the regulatory oversight agency for 340B that seems to violate rulemaking procedures every time it attempts a reform. HRSA’s struggles stem from some combination of limited agency resources, weak statutory authority, the declining power of the administrative state, and tactical errors by leadership.

Hospitals see 340B discounts as an essential lifeline to maintain margins amid a difficult operational environment, with some saying it has come to comprise their entire margin. However, their fast-growing reliance on the program both makes programmatic reform increasingly necessary and the stakes of that reform increasingly fraught. The Trump administration is addressing at least part of this problem by transferring oversight of 340B from HRSA to the Centers for Medicare and Medicaid Services, a much more powerful and capable agency. Expect 2026 to be (another) eventful year for 340B.

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Beyond the Whiteboard

Visualizing key trends from the healthcare industry

When Trust Stops Working
Last September, Robert F. Kennedy Jr. wrote in an op-ed that “restoring public trust in the Centers for Disease Control and Prevention” (CDC) was one of his primary objectives as Health Secretary. Based on the latest survey data from KFF, he is not succeeding. From December 2020 to September 2023, the percentage of Americans who have at least a fair amount of trust that the CDC provides reliable information on vaccines dropped 10 points, affirming Secretary Kennedy’s point that trust needed to be restored. Since then, it has dropped another 16 points, with the most rapid decline occurring after Trump was sworn in for his second term and began implementing the “Make America Healthy Again” agenda. Much of this decline is partisan, as Democrats tend to distrust Republican-led agencies and vice versa, but it is notable that even Republicans’ trust in the CDC’s vaccine recommendations has declined since Trump’s inauguration. The public certainly has specific trust issues with vaccines, which were polarized in the wake of the pandemic in no small part thanks to Secretary Kennedy and his ideological allies, resulting in state and local health officials losing credence since Trump was elected as well. But vaccines may only be a bellwether for a larger breakup of societal consensus. Alongside declining vaccination rates, we have also seen reduced trust in physicians and hospitals, the American mass media, and even one’s neighbors in recent years. Zooming out further, trust in the “American People” itself has been in decline for decades.

Infographic Tags:

vaccines, surveys, consumers, trust, MAHA

*|END:IF|*

Dialing In

Sharing insights from our work with clients

Getting Back on (Partner) Track
Last week, we discussed an independent specialty group that was overly hesitant to transition promising physicians into partnership, and how the better approach is not to close partnership, but to redefine it as a group decision. This week, we’re continuing that thread by setting out some parameters for that process, with the goal of producing a codified “partnership readiness” standard that feels rigorous, transparent, and apolitical.

Partnership readiness can be measured across four domains: economic contribution; clinical quality and patient stewardship; mission and enterprise alignment; and cultural fit. I should note that “economic contribution” cannot be everything and should not just mean wRVUs. Groups regret promoting volume that comes with leakage, compliance risk, call avoidance, or poor citizenship. Partnership should reward physicians who lift performance across the enterprise. A partner should enlarge the pie through incremental capacity, new location coverage, service line expansion, improved payer performance, or leadership that increases throughput.

In this case, my physician friend hinted the real constraint seemed to be cash flow, as the partners wanted to protect their distribution pool. In these situations, solve the cash problem financially, rather than culturally. Many groups can protect distributions without throttling partnership by using ramp-in schedules, vesting, tiered distributions, buy-ins tied to valuation, and separating capital returns from labor returns. If equity truly must be more selective, create a credible non-equity lane with meaningful upside and a defined path so you are not asking great physicians to bet their careers on indefinite “maybe.”

Thank you for tuning into this week's TrustWorks On Call. We'll see you next Tuesday with another round of TrustWorks Takes. With your help in sharing TrustWorks On Call (subscribe here), we're living up to the Collective in TrustWorks Collective. And if you ever need help thinking through a healthcare problem, don't hesitate to reach out to us.

Stay Super,
Anthony D'Eredita and TrustWorks Collective

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Medicare Disadvantaged

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Medicare Disadvantaged

February 3, 2026

This week, we go Beyond the Whiteboard to cover healthcare's role in declining consumer sentiment, and we’re Dialing In on the dangers of creating a partner-track traffic jam. But first the news, starting with what we’re not covering. We were relieved to see that the House passed a bill this Tuesday afternoon to end the government shutdown, but we decided to give ourselves at least a week off from writing about Congressional dysfunction. In the meantime, here is what else has been happening in healthcare:

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Newsletter Tags:

Medicare, pharmaceuticals, labor, economy, physicians, MA

*|END:IF|*

Behind the Headlines

Unpacking the forces driving healthcare’s biggest stories.

1. CMS proposes miniscule MA pay boost.

Last week, the Centers for Medicare and Medicaid Services (CMS) published its 2027 Medicare Advantage (MA) and Part D Advance Notice, proposing a net average payment increase of 0.09 percent for plans.
CMS also proposed tightening risk-adjustment standards by excluding diagnoses generated via “unlinked” chart reviews (i.e., diagnoses not tied to an actual clinical encounter) from risk-score calculations, to disincentivize retrospective chart-mining and associated overpayments.
Health insurers’ stocks tumbled after the announcement, as market analysts were expecting a larger payment update in the neighborhood of four to five percent.

TrustWorks Take: CMS treats its proposed rules as opening bids in negotiation with private industry, so we should expect a more generous final rule to placate unhappy payers. Last year, for example, the 2.23 percent proposed pay increase in the 2026 advance notice more than doubled to 5.06 percent in the 2026 final rule. However, anchored to this near-flat increase, the 2027 final rule is still likely to leave MA payers and their investors disappointed, as President Trump’s second term has proven itself much less MA-friendly than they had come to expect from his first term.

Case in point: the administration’s changes to MA upcoding practices. The Trump administration wants to reduce government spending and fraud, and it wants to support private industry. With MA, these goals are in tension, as payers deploy a variety of well-documented tactics, including medically unnecessary upcoding, to turn public money into private profits. By delinking chart reviews from risk adjustments and playing hardball on rate increases, the second Trump administration is making its MA policy more in line with the Biden administration than the first Trump administration. In response, insurers are threatening benefit cuts, network restrictions, and fewer offerings for their MA plans, which are already operating in highly concentrated market conditions.

2. Medicare selects 15 more drugs for price negotiations.

Last week, CMS announced this year’s selections for the Medicare Drug Price Negotiation Program: 15 drugs which are used by 1.8M beneficiaries and account for $27B, or about six percent, of annual Medicare drug spending, including for the first time Medicare Part B spending along with Part D.
The list of drugs includes treatments for diabetes (Trulicity), HIV (Biktarvy), breast cancer (Kisqali and Verzenio), rheumatoid arthritis (Orencia, Cimzia and Xeljanz), and therapeutic applications of Botox, such as migraine relief; also a 16th drug, diabetes treatment Tradjenta, has been chosen for a first-ever renegotiation.
Because the program's built-in lag, the prices set by the first cycle, negotiated in 2024, have taken effect this year; the second cycle, negotiated last year, will take effect next year; and the third cycle, negotiated this year, will take effect in 2028.

TrustWorks Take: The Medicare Drug Price Negotiation Program is steadily reaching maturity. 40 drugs have been selected, 25 have had new prices negotiated, and the first ten drugs’ new prices have now taken effect. There are still more wrinkles being added to the program, as this is the first year to negotiate Part B prices, and starting next year the program will negotiate 20 drugs annually, but by all available measures, the program appears to be a great legislative success. It maintained full participation from drugmakers, obtained significant price reductions for dozens of Medicare’s most-used drugs, and enjoyed bipartisan support amid a change of Presidential administrations.

The only thing left to do is actually save seniors (and the Medicare program itself) money. Compared to baseline utilization estimates, the first round should achieve a 22 percent reduction in net Medicare spending, and the second round should spur a 44 percent reduction, but we will soon see what the savings look like in practice. AARP research projects that out-of-pocket spending for the first ten discounted drugs this year will drop by 50 percent, and that seven of the ten will be available for less than $100 per month, up from only two of them in 2025.

3. 30K Kaiser Permanente workers strike.

About 30K Kaiser Permanente workers, including nurses, physician assistants, pharmacists, and other healthcare professionals, at hospitals and clinics in California and Hawaii have been conducting an open-ended strike since Monday, January 26.
The United Nurses Association of California/Union of Healthcare Professionals (UNAC/UHCP), which represents the striking workers and called for a five-day strike last fall, is asking for a 25 percent wage increase over four years; Kaiser Permanente has instead offered a four-year, 21.5 percent increase.

TrustWorks Take: Much like the (still ongoing) New York City nursing strike we covered two weeks ago, this strike pits an empowered union of sympathetic, but already well-compensated, nurses (and other professions, this time) against a high-revenue, low-margin health system. Reportedly, negotiations broke down in December after Kaiser Permanente accused a union rep of misconduct, leading to UNAC/UHCP filing a complaint with the National Labor Relations Board, but that seems more like a reflection of tense negotiations than a cause of them.

The increased acrimony likely stems from system’s most-recent operating margin coming in at just 0.7 percent, while registered nurses in California and Hawaii already command the highest pay of all states, although they also face high costs of living. Factoring in the non-nurse workers on strike complicates the picture, but the dynamics remain the same: Health systems want to prepare for the coming lean years, whereas their workers want to get ahead and stay ahead of the purchasing power they lost to inflation.

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Beyond the Whiteboard

Visualizing key trends from the healthcare industry

Healthcare Returns as Top Kitchen Table Issue
Headlines this week captured consumer confidence reaching a 12-year low this month, and while our preferred consumer sentiment index was slightly more optimistic, there is no debating that Americans hold a dismal view of the US economy these days. The persistent mix of inflation, tariffs, slow job growth, and political instability has given consumers a lot to chew on over recent months, but one issue has risen, or perhaps returned, to become Americans’ largest cost-of-living concern: healthcare. According to KFF polling, more Americans are worried about affording healthcare than any other household expense, including food, utilities, rent or mortgage, and transportation. The expiration of the Affordable Care Act enhanced subsidies may have raised the salience of this issue, but healthcare’s unaffordability extends far beyond that relatively small slice of the population. Over half of respondents say their healthcare costs increased last year, and slightly more expect them to increase again this year. In a midterm election year, affordability is going to be a powerful political current, and healthcare affordability may be the singular issue where voters are most disappointed with their representation.

Infographic Tags:

consumers, economy, polling, inflation, utilization

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Dialing In

Sharing insights from our work with clients

Partner-Track Traffic Jam
While working with an independent specialty group, I noticed something that is becoming a familiar pattern. Relative to its size, the group had a small number of partners, despite no shortage of promising physicians waiting in the wings. Clearly, there was hesitancy to transition physicians into partnership. When I asked one of the partners about this, he was direct about it: they (as in he and the other partners) wanted to protect the distribution pool and avoid dilution by keeping partnership tight.

Limiting partnership to avoid dilution can look smart in the short term, but over time it makes recruiting harder, increases the cost of talent, weakens culture, and leaves high-performing physicians vulnerable to poaching. It also dampens the “extra effort” behaviors that keep a group strong, such as taking call, stepping into leadership roles, and helping fix access. As those contributions fade, growth and capacity expansion slow, and the distribution pool can end up shrinking anyway, exactly the outcome the policy was meant to prevent.

Sensitive to these concerns, I offered my opinion that the I have seen the best results from groups that, rather than closing off partnership, redefine it as a group decision: not a rite of passage, but a governance and capital allocation choice. Partnership is one of the most powerful tools a group has to attract, retain, and align physicians. Instead of limiting partners, make better partners, promoted through a disciplined, accretive standard.

Tune in next week for our thoughts on how to define these “accretive” partnership standards so that groups can raise the bar without closing the door.

Thank you for tuning into this week's TrustWorks On Call. We'll see you next Tuesday with another round of TrustWorks Takes. With your help in sharing TrustWorks On Call (subscribe here), we're living up to the Collective in TrustWorks Collective. And if you ever need help thinking through a healthcare problem, don't hesitate to reach out to us.

Stay warm,
Anthony D'Eredita and TrustWorks Collective

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Thawing Out

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Thawing Out

January 27, 2026

This week, we go Beyond the Whiteboard to illustrate the rapid decline in US drug overdose deaths, and we’re Dialing In on how you should not just “sprinkle a bit of AI” on everything. But first the news, coming out of a very cold and tragic weekend:

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Newsletter Tags:

immigration, Congress, insurance, public health, AI

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Behind the Headlines

Unpacking the forces driving healthcare’s biggest stories.

1. DHS shooting risks government funding deal.

On Saturday afternoon, US Border Patrol officers in Minneapolis shot and killed Alex Pretti, a 37-year-old intensive care unit (ICU) nurse at a Veterans Affairs (VA) hospital, about one mile away from where an Immigration and Customs Enforcement (ICE) agent killed Renee Good, earlier this month.
Responding to mounting outrage over these deaths, Senate Democrats announced that they would oppose the current funding bill for the Department of Homeland Security (DHS), which is packaged with the other funding bills, including for healthcare; the Senate needs to pass these bills before Saturday in order to avoid a partial government shutdown.
The agencies at risk of going unfunded after Friday include: Health and Human Services (HHS), Defense, Labor, Housing and Urban Development, and Homeland Security (although ICE itself would be largely unaffected, due to its $75B supplemental funding package from last year’s budget reconciliation law).

TrustWorks Take: This is a newsletter about healthcare business and policy, so it should not have to feature a story about agents of the US government harming law-abiding citizens in the name of immigration enforcement. However, the healthcare angle of this story is unavoidable. Federal agents shot and killed an ICU nurse; as a likely result, the federal government will shut down, its healthcare agencies will operate at limited capacity, and Medicare’s telehealth flexibilities and Hospital-at-Home waivers will again expire. At every level and in every sense, this is no way to run a country.

If a shutdown occurs, Congress will probably come to an agreement that reopens the government within a few days, if not weeks. The worst healthcare consequence may be that Hospital-at-Home programs could briefly shutter again. The impact of Alex Pretti’s death will last much longer and be felt more deeply—first by his family, friends, coworkers, and patients, but also as something for the whole country to process. For the healthcare industry, his death should be considered in the context of this administration targeting undocumented immigrants in emergency rooms, preventing lawfully present immigrants from enrolling in health coverage, and restricting the supply of foreign-trained physicians. We hope that the death of an ICU nurse, as noble a profession as any, can serve as a galvanizing moment for the healthcare community.

2. Congress summons insurance execs to grind axes.

Last Thursday, the CEOs of UnitedHealth Group, CVS Health, Elevance Health, Cigna, and Ascendium (a California Blues-plan parent company) answered ten hours of Congressional questioning, sitting before both the House Energy and Commerce’s Health Subcommittee and the House Ways and Means Committee.
Lawmakers of both parties criticized insurance companies for their failures to limit healthcare cost growth, overuse of prior authorizations, vertical integration strategies, and high executive pay packages; Republicans also used the hearings to denounce the Affordable Care Act (ACA), whereas Democrats brought up Republicans cutting Medicaid funding and allowing the ACA subsidies to expire.

TrustWorks Take: The word of the day was “blame,” and there’s more than enough of it to go around in healthcare. At the hearings, insurers received blame both for their sky-high premiums and for their efforts to limit medical spending through prior authorization. These contradictory messages suggest that Congress is more interested in using insurers as a scapegoat for rising healthcare costs than in finding a solution.

Providers may be tempted to celebrate that insurance companies are the ones eating the most blame these days, but it’s a cycle that, without a solution, will keep on switching according to the whims of political discourse. Only a few years ago, large health systems faced public scrutiny for their debt-collection practices. Now it’s insurers and their prior authorizations. The next time around, it might be hospitals’ turn again, getting threatened with a loss of not-for-profit status if they don’t rein in their prices. In a system defined by misaligned incentives and administrative waste, there's no one “bad actor” in need of reform. Systemic change will require multiple sectors evolving together, either on a slow and deliberative path or through strong and abrupt policymaking.

3. US exits World Health Organization.

Last Thursday, the US completed its withdrawal from the World Health Organization (WHO), a process that began one year ago with an executive order signed by President Trump.
US officials cited the WHO “mishandling” the COVID pandemic, and failing to reform in its aftermath, as justification for US withdrawal.
The US recalled its staff and contractors from all WHO offices, suspended all engagements with the WHO, and stopped paying its dues, including about $280M in arrears that the US reportedly does not plan to pay.

TrustWorks Take: The Trump administration is spinning this decision to stand up to China while scolding the world for our collective failures in COVID response, However, an underlying driver of this decision is that they do not believe in the WHO’s mission of funding and coordinating global public health. The dismantled US Agency for International Development (USAID) was the first casualty of this logic, which approaches every problem with the question, “What’s in it for us?” The US reaps many good things from its global health programs, both charitable and strategic, so only a myopic view of the dollars returned can make them look like a bad deal. Even with all the travel restrictions in place during the pandemic, we saw clearly how diseases do not stop at borders.

Instead, the Trump administration’s global health policy will look more like this controversial study, in which thousands of babies in the West African country of Guinnea-Bissau were to delay receiving the hepatitis B vaccine until six weeks after birth, violating the globally accepted standard of care. The US-funded study was paused after receiving heavy criticism from the public health community, who saw it as unethical and exploitative. But for Health Secretary Kennedy and the Trump administration, they only saw it as a chance to confirm their priors on vaccines without risking Americans’ lives.

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Beyond the Whiteboard

Visualizing key trends from the healthcare industry

A Bright Spot from an Unlikely Subject
After 25 years of persistent rise, drug overdose deaths in the US fell by record amounts in 2024 and 2025. Down 38 percent from 2023, overdose deaths have now reached pre-pandemic levels. Opioids, in particular synthetics like fentanyl, remain present in a majority of overdose deaths, highlighting that increased access to opioid addiction treatment and decreased access to opioids are the two primary factors driving the declining death rates. Treatment options have improved, thanks to a concerted effort to make available naloxone, an overdose-reversing drug, and new policies allowing the use of methadone at home. Billions of dollars of opioid settlement funds flowing into all kinds of treatment systems and educational efforts have helped as well. On the drug supply side, causal theories are a little looser. China may have helped tamp down on a fentanyl precursor; the population of people who use drugs in the first place is thought to be declining; and the pandemic-specific effects that created a “perfect storm” for drug abuse have subsided with time. Realizing these declines provides a source of hope in drug addiction treatment circles, who want to keep the momentum going and reverse not just a few years, but a few decades of drug overdose trends.

Infographic Tags:

opioids, mortality, COVID, behavioral health, trend

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Dialing In

Sharing insights from our work with clients

Avoiding a “Fairy Dust” Approach to AI
Health systems’ approach to artificial intelligence (AI) has evolved quickly over the past two years. Coming out of COVID, providers were trying to get their heads around what AI is, while managing an onslaught of start-ups promising vague returns from partnership or investment. Now, many have started to see some early wins. Automating non-clinical functions like prior authorization or revenue cycle tasks has sped up cycle times. And physicians have seen real value in ambient dictation systems, reducing the time they spend documenting in the EMR during and after visits.

As systems got more comfortable with AI, they started to see a wide range of applications, and adoption now feels like it has hit a fever pitch. As one CIO told us, “Healthcare was late to the game on AI. We’re trying to make up ground and pilot as many applications as possible." The challenge of a “fairy dust’ approach to AI, where you sprinkle a little bit of AI on everything hoping something blossoms, is it will delay seeing value from AI investments. Artificial intelligence is a tool that can solve many kinds of problems and make lots of processes more efficient, but not something that needs a strategy unto itself. Rather, systems should shape their strategy around where AI can make an impact. But attaining real ROI also requires follow-through. As one COO noted, “It’s a lot easier to automate a process on paper than to reduce the number of staff that we have doing the work now. But that’s where you get the savings.”

Thank you for tuning into this week’s TrustWorks On Call. We’ll see you next Tuesday with another round of TrustWorks Takes. With your help in sharing TrustWorks On Call (subscribe here), we’re living up to the Collective in TrustWorks Collective. And if you ever need help thinking through a healthcare problem, don’t hesitate to reach out to us.

Best Regards,
Anthony D’Eredita and TrustWorks Collective

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