TrustWorks On Call: Bad Date with RFK Jr

Behind the Headlines

Unpacking the forces driving healthcare's biggest stories.

1. National nonprofit systems stuck in the red.

Chicago, IL-based CommonSpirit released its Q3 FY2026 financial results, headlined by a $3.4B net loss, which included a $578M (-5.8 percent) operating loss and a one-time $2.4B charge for terminating its revenue cycle management (RCM) contract with Tenet’s Conifer.
St. Louis, MO-based Ascension also posted its financial results for the nine months ending March 31, 2026, recording a $203M (-1.1 percent) operating loss, which was a significant improvement over its $466M (-2.3 percent) loss from the same period last year.

TrustWorks Take: Both of these national, faith-based, nonprofit systems can credibly spin their rough financial results as part of a successful ongoing turnaround. CommonSpirit’s CFO justified bringing its RCM operations back in-house because its cost to collect with Conifer was double the national median, particularly struggling with Medicare Advantage plans. Ascension, although still losing money, divested enough hospitals to lower its operating expenses by 8 percent (its revenue fell 7 percent), while its same-facility revenues grew faster than expenses.

The explanation for their woes is both strategic and structural. National nonprofits shoulder the burden of a large, slow-moving bureaucracy. Meanwhile, in contrast to regionally dominant nonprofits, they often operate as a locality's third or fourth system by market share, limiting their strategic capabilities and ambitions. Ongoing efforts at portfolio rationalization are bearing fruits, but divestures need to be paired with a push toward systemness and efficiency for these systems’ financial results to go from ‘less bad’ to ‘actually good.’

2. Senate health chair loses primary.

Senator Bill Cassidy (R-LA), a gastroenterologist and chair of the Senate Health, Education, Labor, and Pensions (HELP) Committee, lost in a primary challenge last Saturday, finishing third behind Representative Julia Letlow and state Treasurer John Fleming, who will face each other in a runoff next month.
President Trump endorsed Rep. Julia Letlow and encouraged her to enter the race, as Senator Cassidy was one of the few remaining GOP Senators that voted for impeachment in 2021.

TrustWorks Take: The two-term Senator’s career in office may be defined by two pivotal votes: the first to impeach President Trump after January 6th, and the second to confirm Health Secretary Robert F. Kennedy Jr., despite mistrusting his stance on vaccines. The two votes were likely connected, with Cassidy working (unsuccessfully) to get back in the President’s good graces by supporting his nominees. While Cassidy says he has no regrets over the impeachment vote, he would prefer to move past the Kennedy confirmation vote, comparing it to a date from high school he “wish[es he] never had.”

Senator Cassidy has served as a traditional Republican who distinguished himself as a respected chair of the HELP committee, with a serious clinical voice on matters relating to vaccines and public health. His legacy will ultimately include casting the deciding vote for a Health Secretary with opposing views to his (and the vast majority of clinicians), but his time in office is not done yet. Cassidy, alongside Senator Thom Tillis (R-NC), who decided not to run for reelection, and potentially Senator John Cornyn (R-TX), whose primary opponent Trump just endorsed, could form a block of three lame-duck Senators in the GOP’s three-seat majority, giving them considerable sway while immune to electoral pressure.

3. ACA final rule permits skimpier plans.

The Centers for Medicare and Medicaid Services (CMS) published the 2027 Affordable Care Act (ACA) Payment Notice final rule that expands access to catastrophic coverage plans, allows insurers to sell non-standard and non-network plans, and adds more verification checks for low-income subsidies and special enrollment periods.
CMS estimated that this rule will result in 1.2M to 2M fewer people enrolling in exchange coverage because, due to tighter eligibility checks for subsidies and healthier enrollees opting out of coverage.

TrustWorks Take: In response to the expiration of the enhanced ACA subsidies, many enrollees have “bronze shifted,” selecting lower-metal plans with cheaper monthly premiums but higher cost-sharing in an attempt to save on healthcare spending. As a result, the average marketplace deductible increased by about $1,000, or 37 percent, this year. This final rule encourages this trend by expanding access to plans with even higher cost-sharing and fewer defined benefits, in exchange for lower monthly premiums. Some consumers may not understand the limitations on these “skimpier” plans, and others may have no choice but to take the gamble and hope they stay healthy. The net impact for providers is fewer people seeking elective care, and remaining visits bringing more bad debt when enrollees realize their catastrophic coverage leaves them on the hook for the first $10K.

Beyond the Whiteboard

Visualizing key trends from the healthcare industry

Modeling Medicaid Cuts
Nebraska became the first state to implement the Medicaid work requirements mandated by last summer’s One Big Beautiful Bill Act, marking the start of an estimated $1T of Medicaid cuts over the next decade. To understand what these cuts could mean for a typical hospital, we constructed a model that projects revenue and expense growth over the next decade across a few different scenarios. We found that, for a $300M hospital with a three percent operating margin, these Medicaid cuts could be the difference in ten years between barely breaking even and incurring a $25M operating loss.

Even without Medicaid cuts, however, our simulated hospital’s margin is expected to deteriorate over the next decade. Using more conservative estimates of expense growth than we see in vivo, commercial and Medicare revenues will still struggle to keep up with expenses. For our simulated hospital to maintain its 3 percent margin in the face of Medicaid cuts, it would either have to increase its commercial revenue growth rate from 4 percent to 5.4 percent per year, or it would have to slow its annual labor expense growth from 3.5 percent to 1.8 percent. Of course, a hospital’s financials change dynamically, rather than as a product of isolated variables. What this model shows is how difficult a job hospital CFOs have, constantly fighting to stay above water as expenses grow continuously.

Dialing In

Sharing insights from our work with clients

Hantavirus in a Post-COVID Age
Anyone working in healthcare is likely to have received a call or text from a family member or friend looking for reassurance about hantavirus, the viral (in both senses) outbreak that started aboard a Dutch cruise ship and has resulted in three deaths so far. As the death count alone suggests, this disease is not contagious enough to be the next COVID, although its long incubation period presents a challenge for containment efforts. While other countries enforce extensive quarantine protocols, public health communication in the US has been reduced to a private matter because we lack trust in our public health officials to provide a definitive account of the truth.

This mistrust dates back to the early days of COVID, when our understanding of the virus was evolving in real time. There were unforced errors, such as when Dr. Anthony Fauci flip-flopped on mask wearing, motivated by a good-faith attempt to educate the public as the situation developed. Now, our hantavirus response effort is led by a conspiratorial urologist, who specializes in penile implants not public health, and Dr. Jay Bhattacharya, the acting director for the Centers for Disease Control and Prevention, who is getting basic facts about the outbreak wrong in television interviews. Meanwhile, the gutting of USAID has hampered the global response to the most recent Ebola outbreak. Virtually no American is at risk of catching either of these diseases domestically, but the next pandemic is a matter of when, not if, and this administration has not proven itself up to the task.

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Bad Date with RFK Jr.