TrustWorks On Call: Most Favored Newsletter

Behind the Headlines

Unpacking the forces driving healthcare's biggest stories.

1. US and EU agree to pharma trade framework.

As part of a broader trade agreement formalized last week, the US will be setting a tariff of up to 15 percent on pharmaceutical products, along with most other goods, imported from the European Union (EU), effective September 1, 2025.
Imports of generic drugs, their ingredients, and chemical precursors will be subject to a “Most Favored Nations” tariff that’s expected to be close to zero.
President Donald Trump and EU Commission President Ursula von der Leyen crafted the deal on pharmaceuticals in a follow up to last month's meeting, after which Trump claimed that pharma tariff rates were not settled and could go as high as 250 percent.

TrustWorks Take: This trade deal could have been much more disruptive to the US healthcare system. Not only did we avoid Trump’s 250 percent tariff threat and an escalating trade war, but also generics and active ingredients were spared. While Europe manufactures over 43 percent of active ingredients for brand-name drugs consumed in the US, much of this bulk supply is shipped to “fill-finish” plants in the US in a manner that dodges the 15 percent tariff. However, 19 percent of injectable drugs used in the US are still made in Europe. Such drugs now subject to the higher tariff include most of the supply of Novo Nordisk’s Ozempic and Wegovy (Denmark) and Eli Lilly’s Mounjaro and Zepbound (Ireland), among other new and high-cost drugs. Therefore, the net effect of this deal will still raise the price of prescription drugs for US providers, health plans, and ultimately consumers at a time when costs are already skyrocketing out of control. PBMs and insurers will also likely push harder on prior authorizations, formulary restrictions, and cost-sharing to absorb price increases. Trump got his deal, but for US healthcare, this offers nothing but increased costs and a missed opportunity to pivot more of our drug supply chain from Asia to Europe.

2. Employers forecast highest healthcare cost increase in a decade.

Last week, the Business Group on Health released its 2026 Employer Health Care Strategy Survey, in which 125 large employers covering 17M lives projected a median healthcare cost increase of 9 percent, or 7.6 percent after plan design changes.
Employers cited higher-than-expected cost increases in 2023 and 2024, increased utilization of obesity treatments like GLP-1s (which will soon be subject to a tariff), and an ever-increasing prevalence of cancers as the primary drivers behind the projected cost increase.
The survey projects that healthcare costs in 2026 will be 62 percent higher than they were in 2017.

TrustWorks Take: Amid the inflationary environment of the last few years, employer healthcare cost growth has been an underrated driver of wage stagnation and benefit erosion. GLP-1 utilization was already reshaping cost curves before the introduction of tariffs, and rising cancer prevalence, plus the high costs of new and bespoke cancer drugs, only compounds the challenge. The result is that employers, covering half the US population and spending $1.3T on healthcare annually, are no longer just passive payers of the bill. They are being forced into the role of disruptors, experimenting with direct contracting, primary care models, and collective lobbying power. Self-insured employers are perhaps the only group within our healthcare system both organized enough (unlike consumers) and sufficiently incentivized (unlike providers and payers) to convince the government to tackle healthcare costs in some meaningful way. Employers reaching their breaking point on healthcare costs is not a question of if but when, as well as how our national political environment will respond.

3. DOJ subpoenas providers for trans youth care.

The Department of Justice (DOJ) has issued dozens of subpoenas against hospitals, clinics, and individual doctors offering gender-affirming care to people under 19, as part of an inquisition announced by Attorney General Pam Bondi in July.
The subpoena for the Children’s Hospital of Philadelphia, recently made public, includes a request for original versions of every possible document since January 2020 that relates to “gender-related care,” “puberty blockers,” and “hormones” in the context of minors, as well as employment records and sensitive patient information.
Since the DOJ began issuing these subpoenas, more than a dozen hospitals, including in states where gender-affirming care for youth is still legal, have discontinued their gender transition programs.

TrustWorks Take: This unprecedented intrusion by the government into the medical practices of physicians and the treatment choices of families is part of a campaign to demonize and root out the fewer than one in one thousand US adolescents receiving gender-affirming medications. Surgeries are rarer still, having only been elevated into the national discourse through a malicious moral panic. What makes this moment especially alarming is the scope of the subpoenas, seeking every record dating back to 2020, including employment files and sensitive patient data. This level of government reach sets a precedent that could be turned against any area of medicine deemed politically inconvenient, such as reproductive health or the treatment of undocumented immigrants. The chilling effect is already clear: more than a dozen hospitals in states where this care is still legal have shuttered their programs. And the health stakes are high, as denying gender-affirming care correlates with sharply higher rates of depression and suicidality among transgender adolescents. For transgender youth, this is a tragedy. For physicians, it is an affront to their professional autonomy. And for the entire medical community, it is a warning: if evidence-based care can be criminalized or chilled by political fiat in one domain, it can happen in others.

Beyond the Whiteboard

Visualizing key trends from the healthcare industry

Giving Birth in Rural America
The US has the worst maternal mortality rate of any high-income nation in large part due to the socioeconomic and racial disparities. The urban-rural divide is one such example, as rural-dwelling mothers suffer nearly double the mortality rate as those who live in urban areas. In particular, mothers giving birth at rural hospitals with low-volume obstetrics departments experience the greatest rates of morbidity, as these hospitals are less equipped to deal with complicated pregnancies and less able to transfer high-risk patients to better-resourced hospitals nearby, compared to urban hospitals. However, the closure of obstetric service lines, especially in rural areas, is also associated with worse maternal outcomes. Rural mothers are therefore caught in a vicious cycle, in which rural hospitals with low-volume obstetrics departments that produce poor outcomes for mothers choose to shutter their underperforming service lines to help with their thin margins. In the last twenty years, nearly 200 rural hospitals have closed altogether, an undeniable crisis that is only expected to worsen with impending Medicaid cuts. Those that manage to stay open may join the more than half of rural hospitals without obstetrics departments.

This dynamic is not unique to rural obstetrics, although it presents there acutely. Rural health is fundamentally about infrastructure and access. The clinicians, facilities, and systems are what make care possible across every service line. Without that foundation, maternal health can’t improve and neither can cancer outcomes, mental health, or chronic disease management in rural populations. Rather than helplessly witnessing further disinvestment from rural populations, we should be doubling down on clinician training, finding ways to improve basic access through mobile clinics and telehealth, and connecting rural “spokes” to larger “hub” centers for specialty access. But even these steps may only be salves to rural healthcare’s ailing system of payment and provision, which is in need of a complete overhaul.

Dialing In

Sharing insights from our work with clients

Epic’s Technological Trust Test
It’s rare for healthcare news to feel like prestige TV, but Epic’s AI announcement last week briefly became a conversational mainstay in healthcare circles rivaling the airing of the White Lotus finale. With over 300 million patient records stored in its system today, any move Epic makes is amplified across the healthcare landscape. The idea of chart notes drafting themselves, inboxes triaging automatically, and clinical decision support appearing in real time sounds like the long-awaited cure for clinician burnout at a minimum.

In fairness, Epic embedding AI directly into the workflow, rather than as another bolt-on, is a big deal. This means adoption could happen at scale, quickly, and in ways that directly reduce the administrative burdens providers complain about most. Add Epic’s partnership with Microsoft and OpenAI, and the technical horsepower is there to keep pushing the frontier.

However, let’s not get ahead of ourselves. AI won’t fully solve the underlying issues of healthcare because burnout is only partly about documentation. The deeper drivers include unsustainable payment models, chronic staffing shortages, inequities in access, and Medicaid underfunding. These are structural, not technical. AI can smooth the rough edges of the workday, but it can’t rewrite healthcare economics.

Instead, I see Epic’s AI push as a trust test. If clinicians can reliably use these tools to reclaim time, attention, and even eye contact with patients, then trust in technology grows (or at least, gains back a few steps previously lost). If instead they experience them as productivity ratchets, forms of monitoring, or sources of new errors, trust may erode further.

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