# 164 Results for Scheme

URL: https://trustworksco.com/newsletter/164-results-for-scheme/
Last updated: 2026-05-28T20:00:00-04:00

96

<!–

body,table,td,a{  

 -webkit-text-size-adjust:100%;  

 -ms-text-size-adjust:100%;  

 }  

 table,td{  

 mso-table-lspace:0pt;  

 mso-table-rspace:0pt;  

 }  

 img{  

 -ms-interpolation-mode:bicubic;  

 border:0;  

 height:auto;  

 line-height:100%;  

 outline:none;  

 text-decoration:none;  

 }  

 img{  

 border:0;  

 height:auto;  

 line-height:100%;  

 outline:none;  

 text-decoration:none;  

 }  

 table{  

 border-collapse:collapse !important;  

 }  

 body{  

 height:100% !important;  

 margin:0 !important;  

 padding:0 !important;  

 width:100% !important;  

 }  

 a[x-apple-data-detectors]{  

 color:inherit !important;  

 text-decoration:none !important;  

 font-size:inherit !important;  

 font-family:inherit !important;  

 font-weight:inherit !important;  

 line-height:inherit !important;  

 }  

 u+#body a{  

 color:inherit;  

 text-decoration:none;  

 font-size:inherit;  

 font-family:inherit;  

 font-weight:inherit;  

 line-height:inherit;  

 }  

 #MessageViewBody a{  

 color:inherit;  

 text-decoration:none;  

 font-size:inherit;  

 font-family:inherit;  

 font-weight:inherit;  

 line-height:inherit;  

 }  

 a{  

 color:#007C89;  

 text-decoration:underline;  

 }  

 table{  

 border-spacing:0;  

 border-collapse:collapse;  

 mso-table-lspace:0pt;  

 mso-table-rspace:0pt;  

 }  

 body{  

 -webkit-text-size-adjust:100%;  

 -ms-text-size-adjust:100%;  

 }  

 table,td{  

 border-collapse:collapse;  

 mso-table-lspace:0pt;  

 mso-table-rspace:0pt;  

 }  

 img{  

 -ms-interpolation-mode:bicubic;  

 max-width:100%;  

 }  

 #outlook a{  

 padding:0;  

 }  

 .ReadMsgBody{  

 width:100%;  

 }  

 .ExternalClass{  

 width:100%;  

 }  

 .ExternalClass,.ExternalClass p,.ExternalClass span,.ExternalClass font,.ExternalClass td,.ExternalClass div{  

 line-height:100%;  

 }  

 @media only screen and (max-width: 600px){  

 .email-container{  

 width:100% !important;  

 }

} @media only screen and (max-width: 600px){  

 .fluid{  

 max-width:100% !important;  

 height:auto !important;  

 margin-left:auto !important;  

 margin-right:auto !important;  

 }

} @media only screen and (max-width: 600px){  

 .stack-column,.stack-column-center{  

 display:block !important;  

 width:100% !important;  

 max-width:100% !important;  

 direction:ltr !important;  

 }

} @media only screen and (max-width: 600px){  

 .stack-column-center{  

 text-align:center !important;  

 }

} @media only screen and (max-width: 600px){  

 .center-on-mobile{  

 text-align:center !important;  

 display:block !important;  

 margin-left:auto !important;  

 margin-right:auto !important;  

 float:none !important;  

 }

} @media only screen and (max-width: 600px){  

 table.center-on-mobile{  

 display:inline-block !important;  

 }

} @media only screen and (max-width: 600px){  

 .email-container p{  

 font-size:17px !important;  

 line-height:22px !important;  

 }

}

 [View this email in your browser](*|ARCHIVE|*)
 

 

 ![TrustWorks On Call Newsletter Header](https://mcusercontent.com/c877545641c837fafbce6c814/images/e269b796-ba8b-4a73-05d2-6e7403bf534f.png)
 

# **164 Results for Scheme**

May 28, 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*](https://trustworksco.com/subscribe/)*.*  

   

This week, we go **Beyond the Whiteboard** to illustrate the initial impact of the enhanced ACA subsidies expiring, before **Dialing In **on the narrative that hospital leaders are just out for money. But first the news, including a story where the word “scheme” is used 164 times across [three](https://www.frierlevitt.com/wp-content/uploads/2026/05/Mount-Sinai-v.-CVS-Health-Corp.-et-al.pdf) [court](https://www.frierlevitt.com/wp-content/uploads/2026/05/University-of-Kansas-v.-CVS-Healt-Corp.-et-al.pdf) [filings](https://www.frierlevitt.com/wp-content/uploads/2026/05/University-of-Michigan-v.-CVS-Health-Corp.-et-al.pdf).

*|IF:FNAME=HIDDENFORAUDIENCE|*

Newsletter Tags:

health plan, 340B, nonprofit, ACA, health system

*|END:IF|*

 

## Behind the Headlines

Unpacking the forces driving healthcare’s biggest stories.

1. **Providence gives up on its health plan**.

- Renton, WA-based Providence, the nation’s fifth largest health system, [announced](https://www.providencehealthplan.com/about-providence/providence-news/status-update) last week that it will shutter most of its insurance businesses in 2027, although it is “actively working on a potential new agreement with another health insurance carrier” to partner on its Medicare Advantage (MA) business. 

- Providence Health Plan, which has operated for over four decades, [shrank](https://www.healthcaredive.com/news/providence-exits-health-insurance-2027/820842/) significantly in recent years, from 700K members in 2024 to 440K this January, and [posted](https://www.documentcloud.org/documents/28139778-continuing-disclosure-quarterly-report-2025-year-end/) an over $100M loss in 2025. 

***TrustWorks Take:*** When Providence [revealed](https://www.healthcaredive.com/news/providence-exploring-health-plan-sale/815280/) in March that its insurance business was up for sale, it became one of the clearest signs yet that even large and sophisticated provider-sponsored health plans (PSHPs) may no longer be sustainable in the current operating environment. The consumer appeal of a PSHP is that accepting its limited network is a worthwhile tradeoff for lower premiums. ***However, systems have been unable to deliver this integrated care efficiently enough to compete with traditional insurers,*** whose scale and large, diversified risk pools have helped them weather the recent surge in utilization. As a result, Providence is following [Memorial Hermann](https://healthplan.memorialhermann.org/for-providers/resource-center) and half a dozen [other systems](https://www.beckershospitalreview.com/finance/is-there-an-exodus-of-health-system-owned-insurance-plans/) that have wound down portions or all of their insurance businesses since 2025.  

   

Some mature PSHPs may continue to succeed thanks to operational efficiencies and strong markets, but the promise shown by PSHPs in the post-Affordable Care Act (ACA) era of value-based care hype has not materialized. ***That ***[***31 percent***](https://www.trillianthealth.com/market-research/archive/provider-sponsored-health-plans-revenue)*** of health systems operated health plans in 2022 is now looking like a high-water mark, as PSHPs recede to be more of a niche product.*** Even the most value-oriented systems, seeing this vector as not right for them, are investing their limited strategic and financial resources elsewhere.

 

2. **Health systems sue CVS for pocketing 340B discounts**.

- New York City-based Mount Sinai Health System, Ann Arbor-based Michigan Medicine, and Kansas City-based University of Kansas Health System are each [suing](https://www.frierlevitt.com/news/hospitals-sue-cvs-health-340b-drug-program-diversion-lawsuit/) CVS Health over its alleged “scheme” to improperly divert a total of $250M over five years from their 340B drug discount programs. 

- The health systems [allege](https://www.frierlevitt.com/wp-content/uploads/2026/05/Mount-Sinai-v.-CVS-Health-Corp.-et-al.pdf) that Caremark, CVS’s pharmacy benefit manager (PBM), used WellPartner, a CVS subsidiary that administers 340B claims, to flag 340B-eligible specialty drugs after they have been dispensed; for these 340B drugs, Caremark would then funnel artificially low reimbursements through CVS pharmacies to the health systems, while secretly pocketing the spread that was supposed to be passed along to health systems.

***TrustWorks Take:*** This story involves three of US healthcare’s most scrutinized issues: the 340B program, PBMs, and vertical integration. ***CVS has been accused of exploiting the 340B program’s opaque mess of retroactively determined eligibility and passed-through savings to profit at the expense of health systems and patients.***This alleged scheme was only made possible because CVS owns every point of the transaction chain connecting a patient from a 340B hospital to their prescribed drugs, including the PBM that manages their drug plan and the software that processes whether the patient is 340B-eligible.  

   

Many health systems have told us over the years that without 340B savings, their operating margin would be negative, making any changes to the program an existential threat. However, the program has too many problems to keep growing at its current rate. (From 2023 to 2024, discounted purchases made through the program [increased](https://www.drugchannels.net/2025/12/340b-hit-81-billion-in-2024-23-why-cms.html) by 23 percent.) The Trump administration is trying to [implement](https://www.healthcaredive.com/news/providers-push-back-340b-rebate-model-comments/818043/) post-sale rebates and [transfer](https://www.healthcaredive.com/news/340b-move-cms-hrsa-hhs-restructuring-hospitals/751204/) 340B oversight to the Centers for Medicare and Medicaid Services, and Congress has been [exploring](https://www.help.senate.gov/imo/media/doc/4510f17b-be5d-0f1a-2145-03e2950e1602/Feldman%20Testimony.pdf) further reforms. Like how inpatient commercial surgeries no longer subsidize the rest of hospital operations, ***the******340B cross-subsidy model is likely time-limited, and health systems must be prepared to adapt as it changes.***

 

3. **Struggling for-profit system joins nonprofit**.

- Brentwood, TN-based Quorum Health, a private-equity backed for-profit health system operating hospitals in rural and mid-sized communities, has [agreed](https://www.prnewswire.com/news-releases/quorum-health-enters-agreement-to-become-nonprofit-strengthening-commitment-to-community-health-302779293.html) to transition to a nonprofit system by joining the QKA Health Corporation, which manages the nonprofit system Healthside Partners. 

- Quorum Health [spun off](https://www.healthcaredive.com/news/quorum-health-nonprofit-transition-healthside-partners/820924/) from Community Health Systems in 2016 as a publicly traded 38-hospital system, filed for bankruptcy in 2020 after struggling operationally, and now only operates 11 hospitals in nine states.

***TrustWorks Take:*** In the [press release](https://www.prnewswire.com/news-releases/quorum-health-enters-agreement-to-become-nonprofit-strengthening-commitment-to-community-health-302779293.html), Quorum Health touts three “nonprofit-specific advantages” to this transition: $11M annually in 340B savings, $13M annually in tax exemptions, and access to philanthropic funding. All nonprofit health systems must walk the line between margin and mission, but the cold calculus of Quorum’s statement feels wrong. This rationale reflects how nonprofit status is increasingly viewed as a financial strategy rather than a mission structure. ***Changing to nonprofit status*** ***should not be a bailout move for a for-profit system that is struggling. ***When politicians [threaten](https://www.hfma.org/accounting-and-financial-reporting/the-hospital-tax-exemption-comes-under-scrutiny-in-congress/) to strip nonprofit hospitals of their tax-exempt status, they will use instances like this as examples of how health systems are nonprofit in name only.

 

## Beyond the Whiteboard

Visualizing key trends from the healthcare industry

 [![](https://mcusercontent.com/c877545641c837fafbce6c814/images/6af6106d-a979-3960-1849-24e6a63d5cf5.jpg)](https://trustworksco.com/wp-content/uploads/2026/05/260528-ACA-Enrollment-Graphic.jpg)
 

**Early Impact of the ACA Subsidy Expiration**  

In response to preliminary [data](https://www.kff.org/affordable-care-act/what-we-know-so-far-about-2026-aca-marketplace-enrollment-premiums-and-deductibles/) showing that ACA enrollment declined drastically in 2026, the Trump administration and state governments are [reportedly](https://www.politico.com/news/2026/05/25/obamacare-affordability-premiums-fraud-midterms-looming-00930051) fighting over whether better policing of fraud or the loss of enhanced ACA subsidies is to blame. Although we do not yet know the final enrollment total for 2026, as enrollees will continue to drop off throughout the year, the plans selected so far tell a clear story of a cost problem. ***The average selected plan’s premium increased by 58 percent and its deductible increased by 37 percent.*** Average premiums might have increased even more if not for the 33 percent increase in Bronze plan selections, meaning enrollees are trading lower premiums for higher cost-sharing. These price increases have [driven](https://www.kff.org/public-opinion/a-follow-up-survey-of-aca-marketplace-enrollees/) an estimated one in ten 2025 ACA enrollees to become uninsured, and a majority of those who returned to the exchanges face higher prices. As a result of this destabilization of the exchanges, insurance carriers are [pulling out](https://www.healthcaredive.com/news/pacificsource-exits-aca-montana/821084/), providers will face greater uncompensated care burdens, and consumers are growing more certain that our healthcare system is unaffordable and broken. 

*|IF:FNAME=HIDDENFORAUDIENCE|*

Infographic Tags:

ACA, insurance, subsidies, uninsured, premiums

*|END:IF|*

## Dialing In

Sharing insights from our work with clients

**Reframing the Cost Blame Game**  

Last month, I participated in a surprisingly heated panel discussion for a broker and employer audience on why healthcare costs are increasingly unsustainable for businesses. In response to the question of why healthcare is so expensive, one physician CEO and founder of a direct primary care (DPC) company blamed hospital leadership. “If you’re admitted to a hospital, the only people who care about you are the doctors,” he surmised. “The people running them are all MBAs who only care about making money.” I made my disagreement very clear because, having worked with health system leaders for decades, I know the vast majority care deeply about the patients they serve.  

   

Sweeping comments of this variety are more likely to foment factionalism than lead to useful dialogue. We should instead be talking about the misaligned incentives and other structural challenges that have made employer healthcare costs unsustainable. Nonprofit hospitals run on cross-subsidy economics, charging commercial insurers and employers more to offset losses on public-pay and uninsured patients. ***Hospitals provide these low-margin “safety net” services that for-profit providers, like our physician colleague’s cash-pay DPC business, gladly exit.*** By choosing to not bill insurance or take Medicare and Medicaid, they de facto exclude lower-income patients who cannot afford the cost. Hospitals do not have that luxury. Someone has to pay for the under-compensated care hospitals provide, even though it is unfair that employers end up footing the bill.

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](http://eepurl.com/i_f_os) 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](mailto:http://inquiries@trustworksco.com) to us.  

   

Neither cross nor subsidized,  

Anthony D’Eredita,  

Dr. Lisa Bielamowicz,   

and TrustWorks Collective

 

 

 ![TrustWorks Collective Logo](https://mcusercontent.com/c877545641c837fafbce6c814/images/49b7b834-58e5-12f2-914b-b72152bf098f.png)
 

 [![LinkedIn icon](https://cdn-images.mailchimp.com/icons/social-block-v2/color-linkedin-128.png)](https://www.linkedin.com/company/trustworks-collective/)  

 [![Email icon](https://cdn-images.mailchimp.com/icons/social-block-v2/color-forwardtofriend-128.png)](mailto:oncall@trustworksco.com)  

 [![Website Link icon](https://cdn-images.mailchimp.com/icons/social-block-v2/color-link-128.png)](https://trustworksco.com)
 

 *Copyright © *|CURRENT_YEAR|* *|LIST:COMPANY|*, All rights reserved.*  

 *|IFNOT:ARCHIVE_PAGE|* *|LIST:DESCRIPTION|*

**Our mailing address is:**  

 *|HTML:LIST_ADDRESS_HTML|* *|END:IF|*

 Want to change how you receive these emails?  

 You can [update your preferences](*|UPDATE_PROFILE|*) or  

 [unsubscribe](*|UNSUB|*).
 
*|IF:REWARDS|*
*|HTML:REWARDS|*

*|END:IF|*