Donut Take My Care Away

1. Congress passes budget plan targeting significant healthcare cuts.

• The House and Senate each passed budget resolutions last week with narrow, largely party-line votes that set the stage for a final budget reconciliation package.
• Both resolutions call for $880B in spending reductions over ten years from their respective committees overseeing Medicare and Medicaid; the House, but not the Senate, established a minimum target for total spending cuts of $1.5T.
• The resolutions set a nonbinding deadline of May 9 for the reconciliation committee to determine the tax and spending levels in the final bill, which will require simple majorities in both chambers to pass.

TrustWorks Take: Narrow GOP majorities spanning from House deficit hawks to moderate Senate Republicans leave the reconciliation committee between a rock and a hard place. Medicaid funding, which makes up 93 percent of non-Medicare Energy & Commerce Committee spending, could prove to be the decisive issue. To achieve its $88B annual savings target, equivalent to 16 percent of federal Medicaid funding, Congress will choose from a menu of options including eligibility restrictions and work requirements, cuts to federal matching rates for states, and limits on supplemental payment programs to providers. Speaker Mike Johnson’s messaging has focused on redefining eligibility to exclude “able-bodied workers … who should never be on the program.” No matter whom Congress deems to no longer be deserving of or eligible for public insurance, providers are bound to take revenue hits and see uncompensated care levels rise. Congressional Republicans also risk drawing the ire of their supporters, as about 50 percent of recently surveyed Trump voters oppose cutting Medicaid to pay for the tax-break extension.

2. Measles outbreaks surpass 700 confirmed cases across 24 states.

• As of last Thursday, 712 confirmed measles cases have been reported in 2025, resulting in 79 hospitalizations and three deaths so far.
• 2025 has already recorded 150 percent more measles cases than all of 2024, with 93 percent being outbreak-associated (up from 69 percent last year), and only 3 percent occurring in vaccinated individuals (down from 11 percent).
• From February 9 to April 5, between 68 and 91 new cases were reported each week, the majority of which have been in Texas, although cases have been confirmed in about half of US states.

TrustWorks Take: Measles vaccination rates have fallen below the 95 percent herd-immunity threshold in 39 states and DC, with even more pronounced effects on the county and community level, as vaccine hesitancy itself can spread like a social contagion. This phenomenon, supercharged by the COVID pandemic, is of course not limited to measles, as evidenced by a recent spike in incidence of whooping cough, for which no states have achieved herd-immunity vaccination levels. The proliferation of anti-vaccine beliefs, which are held by a major constituency of the “Make America Healthy Again” movement, stems from the elevation of “personal choice,” not medical consensus, as the ultimate guide for an individual’s healthcare decisions. This amounts to a rejection of the fundamental concept of public health—that citizens, scientists, and government leaders should work together to protect everyone’s health at the communal and societal level. Mass layoffs and grant cancellations at the Department of Health & Human Services, resulting in the closure of more than a dozen vaccine clinics among many other effects, will only hasten the decay of our public health capabilities. 

3. CMS to boost inpatient payments by 2.4 percent, MA payments by 5.1 percent.

• The Centers for Medicare & Medicaid Services (CMS) issued its 2026 hospital Inpatient Perspective Payment System (IPPS) proposed rule on Friday, headlined by a 2.4 percent increase in Medicare inpatient payments, the lowest rate increase for inpatient services since 2019.
• The IPPS rule also included a request for information on how to reduce the regulatory burdens hospitals face.
• Earlier last week, CMS finalized its 2026 payment update for Medicare Advantage (MA) and Part D plans, featuring a 5.1 percent benchmark increase—the largest in a decade and more than double the Biden administration’s proposed increase of 2.2 percent.

TrustWorks Take: These payment rules assign dollar values to the Trump administration’s priorities: the privatization of Medicare will continue apace, while hospitals are expected to rein in costs in absence of corresponding rate increases. Stocks of major MA payers soared in response to the MA rule, as these revenue boosts will help fuel marketing efforts, member growth initiatives, and their bottom lines. Meanwhile, the American Hospital Association called the IPPS rate hike “inadequate,” citing similar concerns over expense growth as payers, without the same reprieve. Notably, the IPPS rule tweaks but otherwise remains committed to the Transforming Episode Accountability Model (TEAM), a mandatory bundled payment program for surgical episodes covered by traditional Medicare. This ambitious push toward value for hospitals stands in contrast to the generosity shown toward MA payers.

What’s become clear is that Amazon has, so far, failed to fully integrate care delivery. Despite more recent attempts to secure closer geographic relationships with specialists, there is no owned specialty care infrastructure (as compared to more integrated competitors such as Optum or Kaiser Permanente), no value-based care or risk-sharing arrangements, and no national specialty network. Its churn in senior healthcare leadership, closure of clinic locations, halting telehealth expansion, and muted messaging regarding healthcare on earnings calls suggest an organization still figuring out what it actually means to run a healthcare enterprise, not just own one. Amazon tried to graft healthcare onto a tech and retail playbook and underestimated just how incompatible the DNA really is. Until Amazon addresses the complexities of care delivery and invests in true clinical integration, it will remain on the outside of healthcare—owning assets, but not delivering care in any meaningful or sustainable way.

Commitment in healthcare doesn’t just mean writing a big check. It means understanding reimbursement dynamics, designing for longer timeframes between action and measurable results, building trusting partnerships (not just transactional economic relationships) with providers, empowering physician leadership, and weathering quarters (or years) before you see margin. Most private industries aren’t built for that kind of resilience. Most boards aren’t either. We thought Amazon might be different, and maybe its day is still coming. For now, however, it is just another company with healthcare ambitions outmatched by the realities of the healthcare business, and it remains in a precarious position trying to deliver coordinated care like its more vertically integrated competitors.

Kennedy’s Comments Resurrecting an Old Debate
In a recent interview with CBS News, Secretary of Health & Human Services Robert F. Kennedy Jr. gave us another provocative quote: “If you’re smoking three packs of cigarettes a day … [or] eat donuts all day … should you then expect society to care for you when you predictably get very sick at the same level as somebody who was born with a congenital illness?” He went on to say, “The best answer to that is to realign our incentives so that the economic incentives, the individuals, and the industry align with the public health outcomes that we desire.”

This quote caught our eye because, ironically, Kennedy echoes the very language we use with clients every day: realign incentives to improve outcomes. We also agree on the need to be honest about how choices, environments, and our industry shape health outcomes. However, framing care as something earned through “good” behavior fundamentally misunderstands the role of medicine—and the values we believe should underpin our health system.

Where some see a path forward through penalties and exclusions, we see a future rooted in positive alignment—where payment models reward prevention, where community-level investments matter as much as surgical interventions, and where providers are supported to address the full context of health, not just its consequences. We already see this tension playing out in the system: the smoker premium differential is one example, built into some insurance markets and designed to price risk. But the bigger picture isn’t about punishing “bad” behavior—it’s about designing a system that meets people where they are, and helps them move toward better health, regardless of where they start. The challenge isn’t drawing the line between deserving and undeserving, but rather to build systems where fewer people fall behind in the first place. It all comes down to a familiar question: is healthcare a right or a privilege?