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This week’s edition offers you a lesson learned from Anthony’s work with Apple, a graphic on the “Make America Healthy Again” agenda so far, and a Q+A with Dr. Lisa Bielamowicz. But first, the news: |
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Behind the Headlines
Unpacking the forces driving healthcare's biggest stories
1. Walgreens agrees to be acquired by private equity firm Sycamore Partners.
- Walgreens Boots Alliance announced on Friday that it signed an agreement with Sycamore Partners to take the company private, after having been publicly traded since 1927.
- Sycamore will pay Walgreens shareholders at an equity value of around $10B, and the total value of the deal could reach $24B, including debt and the planned sale of VillageMD assets.
- After investing over $6B in VillageMD to obtain a majority stake, Walgreens has struggled with profitability and disclosed interest in divesting VillageMD last summer.
TrustWorks Take: Walgreens’ vertical integration play with VillageMD, once a sign of retailers’ growing dominance in healthcare delivery, has become dead weight on Walgreens as it tries to reinvent itself. Its choice of partner in this go-private deal (Sycamore’s portfolio is heavy on retail and light on healthcare) suggests that Walgreens’ strategy may now eschew grander healthcare ambitions in favor of a back-to-basics focus on retail and pharmacy efficiency. In light of Walmart Health’s closure, Walgreens’ latest moves, and CVS’s reported interest in a PE backer to expand Oak Street Health, one reason that retail pharmacy-driven healthcare has failed to pan out so far: a retail front door only works as a loss-leader if paired with a sufficient referral structure to generate downstream returns or a risk model to capture downstream savings.
2. HHS offers $25K buyout to most employees.
- Federal workers at the Department of Health and Human Services (HHS) received an email last Friday offering a “voluntary separation offer” of up to $25K, with responses requested by this Friday, March 14.
- The Office of Personnel Management (OPM) sent the email to a “broad population” of HHS’s 80K employees, including those at the Centers for Disease Control and Prevention (CDC), the Food and Drug Administration (FDA), and the National Institutes of Health (NIH).
- Amid wider cost-cutting efforts, the Trump administration says it wants to trim HHS’s $1.7T budget, over 80 percent of which is dedicated to Medicare and Medicaid spending.
TrustWorks Take: Reducing the size of the federal workforce, including healthcare, has emerged as one of the Trump administration’s top priorities. The carrot of a voluntary buyout is being paired with the stick of mass firings, targeted at probationary employees, resulting in legal battles and administrative chaos. Fired FDA employees have even seen their positions restored following industry pushback. Critics of HHS workforce cuts have pointed to the emerging measles outbreak and ongoing avian flu epidemic in poultry and cows as problems that will only worsen under diminished federal oversight.
3. Idaho House passes Medicaid work requirements bill.
- The House of the Idaho State Legislature approved a bill to impose work requirements on many Medicaid recipients with a party-line vote last Thursday.
- The bill, which still needs passage by the Idaho Senate and waiver approval by the Trump administration, would require able-bodied adults to report monthly at least 20 hours of work per week with limited exceptions, such as caring for a child under six years of age, in order to qualify for Medicaid coverage.
- Other provisions in the bill include replacing Idaho’s provider-led Medicaid managed primary care program with one managed by insurance companies, and stipulating that any cuts to federal Medicaid matching funds will automatically trigger spending offsets.
TrustWorks Take: After Idaho voters approved Medicaid expansion by ballot initiative in 2018, the state legislature tried unsuccessfully to obtain a work-requirement waiver from the first Trump administration. Georgia is the only state with active Medicaid work requirements, but another 13 states saw their waivers rescinded or withdrawn under Biden, with Idaho racing to be the first to reapply. Thanks to high administrative costs, Medicaid work requirements have not been shown to produce significant savings, but they are effective at reducing enrollment, as complex reporting requirements can deter many who remain technically eligible from obtaining coverage. Providers in states that pursue Medicaid eligibility restrictions can expect a net loss in public funding and a rise in uncompensated care.
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Dialing In
Sharing insights from our work with clients
A Lesson from My Time with the Fruit Company
By Anthony D’Eredita
After spending two decades working with nonprofit health systems, I had the unique opportunity to assist Apple in establishing its employee-focused healthcare delivery model—first as a consultant, then as an internal leader. During my time there, one of Apple’s principles stood out: uncompromised attention to the end-user experience was paramount.
Tasked with leading the implementation of a patient portal and clinical documentation system, I initially focused on clinical acceptance and provider satisfaction—assuming that ensuring clinician buy-in was the highest priority. However, as we approached go-live, the team expressed increasing resistance over patient-facing configurations and user-interface adjustments. Over time, I came to understand why. Although clinical workflows and provider experiences were undeniably important, their real value lay in their ability to enhance the broader patient experience. Every design decision and workflow adjustment needed to prioritize seamless, intuitive interactions for patients.
For healthcare organizations, striving for an uncompromised patient experience is an obvious priority, but executing on that vision while implementing new initiatives is far more challenging. The patient experience isn’t just about clinical interactions—it encompasses the entire patient journey. Ensuring that patients, physicians, and administrative teams have seamless ways to communicate, coordinate, and co-manage both care and business operations is just as essential as the care itself. As the industry continues to evolve, those who prioritize holistic, patient-centered experiences—not just clinical efficiency—will be the ones who thrive.
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Beyond the Whiteboard
Visualizing key trends from the healthcare industry
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The Trump administration has wasted no time reducing and reshaping the federal government. Comprising 27 percent of annual federal outlays, healthcare programs and services are an inevitable target for Department of Government Efficiency reforms and budgetary offsets. President Trump has said that entitlements such as Social Security, Medicare, and Medicaid should be protected, but Medicaid appears to be the most vulnerable to spending cuts. On the provider side (beyond a potential increase to the uninsured population), site-neutral payment reforms, uncompensated care cuts, and changes to the Medicare Physician Fee Schedule could further undermine care delivery businesses. Amid the federal government rolling back oversight and encouraging privatization, states will play an increasingly pivotal role, either by countering federal actions where possible or doubling down on deregulatory initiatives. One item in particular to look out for: state governments conditioning not-for-profit hospital tax breaks on compliance with price ceilings or other outcomes and factors.
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Weighing In
Offering our thoughts on a notable topic
Three Questions with Lisa Bielamowicz, MD
Dr. Bielamowicz is an independent strategic advisor to health systems and physician groups, formerly of Gist Healthcare and the Advisory Board Company.
What are you seeing out in the market?
Many health systems and medical groups are in a moment of strategic stasis, which stems in part from a lack of a strategic organizing principle. The industry moves faster when there is a “movement” that we unite around. For a time that was value-based care, and more recently it’s been consumerism and digital medicine. Now, many leaders are looking at market uncertainty and battening down the hatches and postponing big strategic decisions. With so much happening, it’s hard to know where to look. Focusing on the trends above policy—generational shifts in the workforce and care needs, movement to lower-cost care settings, the impact of AI and other technology—will guide us in the right direction.
How should we think about generational turnover?
It’s the tsunami we’ve seen coming for a long time, and now it’s finally here. There’s the Medicare angle—we’ve known the Baby Boomers will have a massive impact on entitlement spend—but the effect on our provider workforce could be just as significant. A huge number of tenured staff with loads of institutional knowledge are preparing for retirement, which whole industries are popping up to manage. Take private equity acquisition of physician groups. They’re funding the exit of Baby Boomer doctors whose retirement incomes are tied up in their practices, and it’s been highly disruptive. Many health system leaders are also staring down retirement, and it’s contributing to the feeling of strategic stasis. I’ve had several CEOs say, “I’ve only got a few years left, I’m just going to keep the ship on course and the big decisions will be the next guy’s problem.”
What makes you optimistic?
Despite things feeling crazy now, providers have rallied to succeed through larger disruptions. The financial crisis of 2009 spurred us to rethink scale and how to make systems operate as actual systems, not just holding companies, to capture efficiencies. COVID was the greatest challenge the industry has faced in our careers, and providers led the way in quickly reorganizing to deliver care, alongside spearheading a vaccine rollout on a scale we couldn’t have imagined. We’ve shown we can do it. Now we need to apply the same level of urgency and action to figuring out the next evolution of strategy in service of our patients and communities.
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