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America's Next Top EHR

August 19, 2025

Hello and welcome back 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 with a forward-looking final graphic in our mini run on Medicare, and we’re Dialing In on the paradox between Wall Street and Main Street healthcare. But first, the news, led off by an exciting new season of EHR competition set to kick off between Epic, the sector’s current powerhouse, and Oracle, the tech giant trying to turn a comeback story into reality.

Behind the Headlines

Unpacking the forces driving healthcare's biggest stories.

1. Oracle launches AI-enabled EHR, with Epic following suit.

  • Last week, Oracle unveiled its “next-generation” Oracle Health Electronic Health Record (EHR) for ambulatory providers, touting various AI-enabled features such as voice-command search, generative summaries of patient information, and compatibility with third-party AI tools.
  • Oracle’s rival Epic also announced its new AI scribe tool at its annual Users Group Meeting, taking place this week.
  • Epic has partnered with Microsoft and Open AI since 2023 to integrate generative AI tools into its EHR. 
TrustWorks Take: The bullish case for Oracle’s purchase of Cerner in 2022 was that the tech giant would leverage its AI and cloud capabilities to modernize the healthcare sector through next-generation EHRs. Since then, Oracle has only lost market share to Epic, which now controls 42 percent of the acute hospital EHR market. The two companies are pivoting to compete on a new front by launching dueling AI products this month. Sensing a similar opportunity to chip away at that 42 percent, venture capitalists are also betting on technology advancements to return attention to EHRs through a much-needed evolution. These ventures are premised on transforming cutting-edge health tech from a cost center and loss leader to a strategic driver of growth through improved productivity and better patient outcomes. Hospital and physician leaders should also recognize this fundamental shift: the healthcare tech innovations of the past have almost always been hardware, from MRIs to surgical robots, whereas AI-enabled EHRs are a highly scalable software innovation. The return-on-investment calculus for AI is entirely different than a piece of capital equipment, even if the need for a strategy connecting investments to outcomes is the same.
 

2. HHS revives childhood vaccine safety panel.

  • Last Thursday, the Department of Health and Human Services (HHS) announced the reinstatement of the Task Force on Safer Childhood Vaccines, a panel created by Congress to oversee the vaccines administered to children that was disbanded in 1998.
  • The task force, staffed by senior leaders at HHS subagencies, will submit a formal report to Congress within two years that recommends improvements to childhood vaccine development, distribution, and reporting to reduce the frequency and severity of adverse reactions.
  • Also last week, HHS Secretary Robert F Kennedy Jr. was rebuffed by the Annals of Internal Medicine after Kennedy demanded that the journal retract a study it published in July, analyzing more than 1.2M Danish children over two decades, which found no evidence of a link between aluminum content in vaccines and increased risk for autoimmune, atopic, allergic, or neurodevelopmental disorders.
TrustWorks Take: RFK Jr.’s attempt to get a highly reputable journal to retract a landmark and authoritative study illustrates exactly why this task force is a harbinger of restrictions to the childhood vaccine schedule. To vaccine skeptics like RFK Jr., the starting assumption is that vaccines are harmful, so any evidence to the contrary must be manufactured or biased. If such a backwards and unscientific perspective takes root within the task force, it could lead to policies that delay childhood vaccinations and contribute to greater vaccine hesitancy from the public. Given that this year saw the worst measles outbreak since 1992 amid steadily declining MMR vaccination rates, RFK Jr.’s leadership as health secretary is not only making Americans less healthy and straining the system with preventable disease, but also eroding the public trust that forms the bedrock of public health communication.
 

3. CBO estimates OBBBA to trigger $490B of Medicare cuts by 2034.

  • Last Friday, the Congressional Budget Office (CBO) shared an analysis of the budget sequestration triggered by the One Big Beautiful Bill Act (OBBBA) in accordance with the Statutory Pay-As-You-Go Act (PAYGO) of 2010.
  • The CBO estimated that the OBBBA’s $3.4T increase to the deficit from 2025-2034, which triggers up to four percent cuts to annual Medicare spending totaling $536B from 2026-2034. 
  • Congress has recently passed laws erasing the PAYGO requirements for Trump’s 2017 tax cuts and Biden’s 2021 American Rescue Plan, but such a move requires 60 votes and bipartisan support in the Senate.
TrustWorks Take: Congress will have to act on this because the OBBBA’s estimated deficit impact is so large that it is impossible to comply with PAYGO. The CBO notes that after accounting for the maximum allowable Medicare cuts (which would be a political, social, and economic disaster if allowed to proceed), the required reduction in spending on other programs “exceed[s] the estimated amount of resources available to those programs.” In other words, we’d have to cut more than we’re currently spending. While Congress has never allowed PAYGO sequestration to go into effect, the law sets the stage for some high-stakes negotiations in whatever package averts the cuts, which are scheduled to begin in FY 2026. The fiscal irresponsibility of the OBBBA is hard to understate, but perhaps the only way things could get worse would be to gut Medicare and other large swaths of federal spending for the sake of budget neutrality. However, as we detail in the graphic below, our habit of kicking the can down the road on deficit spending leaves us less room to deal with the real fiscal problems looming over the next few decades.
 

Beyond the Whiteboard

Visualizing key trends from the healthcare industry

What Happens Once Every Baby Boomer is on Medicare
The aging of America, driven by the relative size of Baby Boomer generation, has us hurtling toward a “gray trap” (or staring down a “silver tsunami," if you prefer). We stand at a precipice in 2025, with 75 percent of Boomers aged 65 or older. From thirty years ago (1995) to projections of thirty years from now (2055):

  • The share of Americans age-eligible for Medicare almost doubles from 12 percent to 23 percent
  • The ratio of working-age to retirement-age people drops nearly in half from 4.1 to 2.2
  • Medicare spending as a share of GDP more than doubles from 2.4 percent to 5.2 percent
  • The percentage of seniors who are 85 years or older more than doubles from 10 percent to 21 percent

Each of these figures is interrelated and indicative of a distinct challenge. The growing number of seniors will require a growing population of caregivers, which takes away labor from the rest of the economy. Payroll taxes are a significant funding source for Medicare, so as more people exit the workforce for their own retirement or to care for their retired parents, Medicare funding will depend more on general taxation to cover its increasingly large expenditures. And these expenditures will grow not only because more people are on Medicare, but because the average age of Medicare enrollees is going to increase rapidly in the coming decades. Boomers are expected to live longer but with worse health than previous generations, which is a product of and a driver for more medical care.
 
The aging of America is predetermined (give or take net migration), but our strategic decisions are not. For providers, now is the time to figure out how to get by on Medicare (and Medicare Advantage) margins, because the share of Medicare patients will only grow, while the generosity of Medicare reimbursements will be perpetually targeted for cuts. At the same time, policymakers are likely to push for greater personal contributions to healthcare whether through higher premiums, cost-sharing, or means-testing of benefits as public financing strains under demographic pressure. The future may seem dark and gray, but this may prove to be the crisis that spurs innovation toward a better system of care. 

Dialing In

Sharing insights from our work with clients

The Paradox of Market Optimism and Operational Strain
Waiting for a conference call with some physician leaders to begin last week, someone read out from their inbox the headline "UnitedHealth surges after Buffet, Tepper bet on turnaround.” The next two stories in their Modern Healthcare news round up were about rural ERs being run without doctors and community health centers preparing to close due to Medicaid cuts. At the end of a long week, we were all somewhere between laughing and crying. In lieu of our regularly scheduled check-in, we ended up discussing the paradox that’s at the heart of these headlines.
 
On one side, the oncoming gutting of Medicaid rolls and reductions to federal funding are triggering warnings from various states and health systems about overcrowded ERs, longer wait times, and funding crises for safety-net providers. On the other, the likes of UnitedHealth and CVS appear to be exiting their slumps in the last month, finding new messages to convince investors of their long-term prospects. We know these things to be separate, but at times they can be hard to square.
 
This paradox exists because the pain and the profits are landing in different places, on different timelines. For large, diversified payers and health companies, Medicaid losses can be offset with growth in Medicare Advantage, commercial lines, or home health integration. Investors see consolidation and efficiency plays as margin-friendly over the long run. For rural hospitals, reproductive health providers, and Medicaid-heavy systems, there’s no such hedge. Cuts hit directly because fewer covered lives means more uncompensated care, worse payer mix, and an immediate hit to the bottom line.
 
Talking this out with the group led naturally into some calls for action. We agreed that leaders need to grapple with both sides of the paradox, capital market optimism and operational strain, or they will end up reacting to, rather than shaping, the next wave of consolidation. The conclusion was that now is the time to model different scenarios and think through new approaches. At minimum, explore diversification strategies such as partnerships that buffer Medicaid exposure by sharing resources and infrastructure where possible. Physician enterprise economics should also be revisited in light of Medicaid impacts. Throughout, physicians can play a critical advocacy role by illustrating the real-world consequences to state and federal representatives.
 
Treating Medicaid cuts as a political headline to watch means getting caught flat-footed. Those that begin to plan now for the payer mix shift, diversify strategically, and position themselves in the coming consolidation wave will be the ones that may have a chance in controlling their destiny two years from now.