Medicare Disadvantaged

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Medicare Disadvantaged

February 3, 2026

Welcome 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 to cover healthcare's role in declining consumer sentiment, and we’re Dialing In on the dangers of creating a partner-track traffic jam. But first the news, starting with what we’re not covering. We were relieved to see that the House passed a bill this Tuesday afternoon to end the government shutdown, but we decided to give ourselves at least a week off from writing about Congressional dysfunction. In the meantime, here is what else has been happening in healthcare:

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Newsletter Tags:

Medicare, pharmaceuticals, labor, economy, physicians, MA

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Behind the Headlines

Unpacking the forces driving healthcare’s biggest stories.

1. CMS proposes miniscule MA pay boost.

Last week, the Centers for Medicare and Medicaid Services (CMS) published its 2027 Medicare Advantage (MA) and Part D Advance Notice, proposing a net average payment increase of 0.09 percent for plans.
CMS also proposed tightening risk-adjustment standards by excluding diagnoses generated via “unlinked” chart reviews (i.e., diagnoses not tied to an actual clinical encounter) from risk-score calculations, to disincentivize retrospective chart-mining and associated overpayments.
Health insurers’ stocks tumbled after the announcement, as market analysts were expecting a larger payment update in the neighborhood of four to five percent.

TrustWorks Take: CMS treats its proposed rules as opening bids in negotiation with private industry, so we should expect a more generous final rule to placate unhappy payers. Last year, for example, the 2.23 percent proposed pay increase in the 2026 advance notice more than doubled to 5.06 percent in the 2026 final rule. However, anchored to this near-flat increase, the 2027 final rule is still likely to leave MA payers and their investors disappointed, as President Trump’s second term has proven itself much less MA-friendly than they had come to expect from his first term.

Case in point: the administration’s changes to MA upcoding practices. The Trump administration wants to reduce government spending and fraud, and it wants to support private industry. With MA, these goals are in tension, as payers deploy a variety of well-documented tactics, including medically unnecessary upcoding, to turn public money into private profits. By delinking chart reviews from risk adjustments and playing hardball on rate increases, the second Trump administration is making its MA policy more in line with the Biden administration than the first Trump administration. In response, insurers are threatening benefit cuts, network restrictions, and fewer offerings for their MA plans, which are already operating in highly concentrated market conditions.

2. Medicare selects 15 more drugs for price negotiations.

Last week, CMS announced this year’s selections for the Medicare Drug Price Negotiation Program: 15 drugs which are used by 1.8M beneficiaries and account for $27B, or about six percent, of annual Medicare drug spending, including for the first time Medicare Part B spending along with Part D.
The list of drugs includes treatments for diabetes (Trulicity), HIV (Biktarvy), breast cancer (Kisqali and Verzenio), rheumatoid arthritis (Orencia, Cimzia and Xeljanz), and therapeutic applications of Botox, such as migraine relief; also a 16th drug, diabetes treatment Tradjenta, has been chosen for a first-ever renegotiation.
Because the program's built-in lag, the prices set by the first cycle, negotiated in 2024, have taken effect this year; the second cycle, negotiated last year, will take effect next year; and the third cycle, negotiated this year, will take effect in 2028.

TrustWorks Take: The Medicare Drug Price Negotiation Program is steadily reaching maturity. 40 drugs have been selected, 25 have had new prices negotiated, and the first ten drugs’ new prices have now taken effect. There are still more wrinkles being added to the program, as this is the first year to negotiate Part B prices, and starting next year the program will negotiate 20 drugs annually, but by all available measures, the program appears to be a great legislative success. It maintained full participation from drugmakers, obtained significant price reductions for dozens of Medicare’s most-used drugs, and enjoyed bipartisan support amid a change of Presidential administrations.

The only thing left to do is actually save seniors (and the Medicare program itself) money. Compared to baseline utilization estimates, the first round should achieve a 22 percent reduction in net Medicare spending, and the second round should spur a 44 percent reduction, but we will soon see what the savings look like in practice. AARP research projects that out-of-pocket spending for the first ten discounted drugs this year will drop by 50 percent, and that seven of the ten will be available for less than $100 per month, up from only two of them in 2025.

3. 30K Kaiser Permanente workers strike.

About 30K Kaiser Permanente workers, including nurses, physician assistants, pharmacists, and other healthcare professionals, at hospitals and clinics in California and Hawaii have been conducting an open-ended strike since Monday, January 26.
The United Nurses Association of California/Union of Healthcare Professionals (UNAC/UHCP), which represents the striking workers and called for a five-day strike last fall, is asking for a 25 percent wage increase over four years; Kaiser Permanente has instead offered a four-year, 21.5 percent increase.

TrustWorks Take: Much like the (still ongoing) New York City nursing strike we covered two weeks ago, this strike pits an empowered union of sympathetic, but already well-compensated, nurses (and other professions, this time) against a high-revenue, low-margin health system. Reportedly, negotiations broke down in December after Kaiser Permanente accused a union rep of misconduct, leading to UNAC/UHCP filing a complaint with the National Labor Relations Board, but that seems more like a reflection of tense negotiations than a cause of them.

The increased acrimony likely stems from system’s most-recent operating margin coming in at just 0.7 percent, while registered nurses in California and Hawaii already command the highest pay of all states, although they also face high costs of living. Factoring in the non-nurse workers on strike complicates the picture, but the dynamics remain the same: Health systems want to prepare for the coming lean years, whereas their workers want to get ahead and stay ahead of the purchasing power they lost to inflation.

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Beyond the Whiteboard

Visualizing key trends from the healthcare industry

Healthcare Returns as Top Kitchen Table Issue
Headlines this week captured consumer confidence reaching a 12-year low this month, and while our preferred consumer sentiment index was slightly more optimistic, there is no debating that Americans hold a dismal view of the US economy these days. The persistent mix of inflation, tariffs, slow job growth, and political instability has given consumers a lot to chew on over recent months, but one issue has risen, or perhaps returned, to become Americans’ largest cost-of-living concern: healthcare. According to KFF polling, more Americans are worried about affording healthcare than any other household expense, including food, utilities, rent or mortgage, and transportation. The expiration of the Affordable Care Act enhanced subsidies may have raised the salience of this issue, but healthcare’s unaffordability extends far beyond that relatively small slice of the population. Over half of respondents say their healthcare costs increased last year, and slightly more expect them to increase again this year. In a midterm election year, affordability is going to be a powerful political current, and healthcare affordability may be the singular issue where voters are most disappointed with their representation.

Infographic Tags:

consumers, economy, polling, inflation, utilization

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Dialing In

Sharing insights from our work with clients

Partner-Track Traffic Jam
While working with an independent specialty group, I noticed something that is becoming a familiar pattern. Relative to its size, the group had a small number of partners, despite no shortage of promising physicians waiting in the wings. Clearly, there was hesitancy to transition physicians into partnership. When I asked one of the partners about this, he was direct about it: they (as in he and the other partners) wanted to protect the distribution pool and avoid dilution by keeping partnership tight.

Limiting partnership to avoid dilution can look smart in the short term, but over time it makes recruiting harder, increases the cost of talent, weakens culture, and leaves high-performing physicians vulnerable to poaching. It also dampens the “extra effort” behaviors that keep a group strong, such as taking call, stepping into leadership roles, and helping fix access. As those contributions fade, growth and capacity expansion slow, and the distribution pool can end up shrinking anyway, exactly the outcome the policy was meant to prevent.

Sensitive to these concerns, I offered my opinion that the I have seen the best results from groups that, rather than closing off partnership, redefine it as a group decision: not a rite of passage, but a governance and capital allocation choice. Partnership is one of the most powerful tools a group has to attract, retain, and align physicians. Instead of limiting partners, make better partners, promoted through a disciplined, accretive standard.

Tune in next week for our thoughts on how to define these “accretive” partnership standards so that groups can raise the bar without closing the door.

Thank you for tuning into this week's TrustWorks On Call. We'll see you next Tuesday with another round of TrustWorks Takes. With your help in sharing TrustWorks On Call (subscribe here), we're living up to the Collective in TrustWorks Collective. And if you ever need help thinking through a healthcare problem, don't hesitate to reach out to us.

Stay warm,
Anthony D'Eredita and TrustWorks Collective

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Thawing Out

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Thawing Out

January 27, 2026

This week, we go Beyond the Whiteboard to illustrate the rapid decline in US drug overdose deaths, and we’re Dialing In on how you should not just “sprinkle a bit of AI” on everything. But first the news, coming out of a very cold and tragic weekend:

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Newsletter Tags:

immigration, Congress, insurance, public health, AI

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Behind the Headlines

Unpacking the forces driving healthcare’s biggest stories.

1. DHS shooting risks government funding deal.

On Saturday afternoon, US Border Patrol officers in Minneapolis shot and killed Alex Pretti, a 37-year-old intensive care unit (ICU) nurse at a Veterans Affairs (VA) hospital, about one mile away from where an Immigration and Customs Enforcement (ICE) agent killed Renee Good, earlier this month.
Responding to mounting outrage over these deaths, Senate Democrats announced that they would oppose the current funding bill for the Department of Homeland Security (DHS), which is packaged with the other funding bills, including for healthcare; the Senate needs to pass these bills before Saturday in order to avoid a partial government shutdown.
The agencies at risk of going unfunded after Friday include: Health and Human Services (HHS), Defense, Labor, Housing and Urban Development, and Homeland Security (although ICE itself would be largely unaffected, due to its $75B supplemental funding package from last year’s budget reconciliation law).

TrustWorks Take: This is a newsletter about healthcare business and policy, so it should not have to feature a story about agents of the US government harming law-abiding citizens in the name of immigration enforcement. However, the healthcare angle of this story is unavoidable. Federal agents shot and killed an ICU nurse; as a likely result, the federal government will shut down, its healthcare agencies will operate at limited capacity, and Medicare’s telehealth flexibilities and Hospital-at-Home waivers will again expire. At every level and in every sense, this is no way to run a country.

If a shutdown occurs, Congress will probably come to an agreement that reopens the government within a few days, if not weeks. The worst healthcare consequence may be that Hospital-at-Home programs could briefly shutter again. The impact of Alex Pretti’s death will last much longer and be felt more deeply—first by his family, friends, coworkers, and patients, but also as something for the whole country to process. For the healthcare industry, his death should be considered in the context of this administration targeting undocumented immigrants in emergency rooms, preventing lawfully present immigrants from enrolling in health coverage, and restricting the supply of foreign-trained physicians. We hope that the death of an ICU nurse, as noble a profession as any, can serve as a galvanizing moment for the healthcare community.

2. Congress summons insurance execs to grind axes.

Last Thursday, the CEOs of UnitedHealth Group, CVS Health, Elevance Health, Cigna, and Ascendium (a California Blues-plan parent company) answered ten hours of Congressional questioning, sitting before both the House Energy and Commerce’s Health Subcommittee and the House Ways and Means Committee.
Lawmakers of both parties criticized insurance companies for their failures to limit healthcare cost growth, overuse of prior authorizations, vertical integration strategies, and high executive pay packages; Republicans also used the hearings to denounce the Affordable Care Act (ACA), whereas Democrats brought up Republicans cutting Medicaid funding and allowing the ACA subsidies to expire.

TrustWorks Take: The word of the day was “blame,” and there’s more than enough of it to go around in healthcare. At the hearings, insurers received blame both for their sky-high premiums and for their efforts to limit medical spending through prior authorization. These contradictory messages suggest that Congress is more interested in using insurers as a scapegoat for rising healthcare costs than in finding a solution.

Providers may be tempted to celebrate that insurance companies are the ones eating the most blame these days, but it’s a cycle that, without a solution, will keep on switching according to the whims of political discourse. Only a few years ago, large health systems faced public scrutiny for their debt-collection practices. Now it’s insurers and their prior authorizations. The next time around, it might be hospitals’ turn again, getting threatened with a loss of not-for-profit status if they don’t rein in their prices. In a system defined by misaligned incentives and administrative waste, there's no one “bad actor” in need of reform. Systemic change will require multiple sectors evolving together, either on a slow and deliberative path or through strong and abrupt policymaking.

3. US exits World Health Organization.

Last Thursday, the US completed its withdrawal from the World Health Organization (WHO), a process that began one year ago with an executive order signed by President Trump.
US officials cited the WHO “mishandling” the COVID pandemic, and failing to reform in its aftermath, as justification for US withdrawal.
The US recalled its staff and contractors from all WHO offices, suspended all engagements with the WHO, and stopped paying its dues, including about $280M in arrears that the US reportedly does not plan to pay.

TrustWorks Take: The Trump administration is spinning this decision to stand up to China while scolding the world for our collective failures in COVID response, However, an underlying driver of this decision is that they do not believe in the WHO’s mission of funding and coordinating global public health. The dismantled US Agency for International Development (USAID) was the first casualty of this logic, which approaches every problem with the question, “What’s in it for us?” The US reaps many good things from its global health programs, both charitable and strategic, so only a myopic view of the dollars returned can make them look like a bad deal. Even with all the travel restrictions in place during the pandemic, we saw clearly how diseases do not stop at borders.

Instead, the Trump administration’s global health policy will look more like this controversial study, in which thousands of babies in the West African country of Guinnea-Bissau were to delay receiving the hepatitis B vaccine until six weeks after birth, violating the globally accepted standard of care. The US-funded study was paused after receiving heavy criticism from the public health community, who saw it as unethical and exploitative. But for Health Secretary Kennedy and the Trump administration, they only saw it as a chance to confirm their priors on vaccines without risking Americans’ lives.

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Beyond the Whiteboard

Visualizing key trends from the healthcare industry

A Bright Spot from an Unlikely Subject
After 25 years of persistent rise, drug overdose deaths in the US fell by record amounts in 2024 and 2025. Down 38 percent from 2023, overdose deaths have now reached pre-pandemic levels. Opioids, in particular synthetics like fentanyl, remain present in a majority of overdose deaths, highlighting that increased access to opioid addiction treatment and decreased access to opioids are the two primary factors driving the declining death rates. Treatment options have improved, thanks to a concerted effort to make available naloxone, an overdose-reversing drug, and new policies allowing the use of methadone at home. Billions of dollars of opioid settlement funds flowing into all kinds of treatment systems and educational efforts have helped as well. On the drug supply side, causal theories are a little looser. China may have helped tamp down on a fentanyl precursor; the population of people who use drugs in the first place is thought to be declining; and the pandemic-specific effects that created a “perfect storm” for drug abuse have subsided with time. Realizing these declines provides a source of hope in drug addiction treatment circles, who want to keep the momentum going and reverse not just a few years, but a few decades of drug overdose trends.

Infographic Tags:

opioids, mortality, COVID, behavioral health, trend

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Dialing In

Sharing insights from our work with clients

Avoiding a “Fairy Dust” Approach to AI
Health systems’ approach to artificial intelligence (AI) has evolved quickly over the past two years. Coming out of COVID, providers were trying to get their heads around what AI is, while managing an onslaught of start-ups promising vague returns from partnership or investment. Now, many have started to see some early wins. Automating non-clinical functions like prior authorization or revenue cycle tasks has sped up cycle times. And physicians have seen real value in ambient dictation systems, reducing the time they spend documenting in the EMR during and after visits.

As systems got more comfortable with AI, they started to see a wide range of applications, and adoption now feels like it has hit a fever pitch. As one CIO told us, “Healthcare was late to the game on AI. We’re trying to make up ground and pilot as many applications as possible." The challenge of a “fairy dust’ approach to AI, where you sprinkle a little bit of AI on everything hoping something blossoms, is it will delay seeing value from AI investments. Artificial intelligence is a tool that can solve many kinds of problems and make lots of processes more efficient, but not something that needs a strategy unto itself. Rather, systems should shape their strategy around where AI can make an impact. But attaining real ROI also requires follow-through. As one COO noted, “It’s a lot easier to automate a process on paper than to reduce the number of staff that we have doing the work now. But that’s where you get the savings.”

Thank you for tuning into this week’s TrustWorks On Call. We’ll see you next Tuesday with another round of TrustWorks Takes. With your help in sharing TrustWorks On Call (subscribe here), we’re living up to the Collective in TrustWorks Collective. And if you ever need help thinking through a healthcare problem, don’t hesitate to reach out to us.

Best Regards,
Anthony D’Eredita and TrustWorks Collective

Our mailing address is:
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TrustWorks On Call Alert
January 21, 2026

Welcome to a special, emergency edition of TrustWorks On Call. One of our values is to respect our readers’ inboxes by limiting our correspondence to exactly what you signed up for—one email per week, delivered to you at 4pm ET each Tuesday—but the news does not always wait for our Tuesday publishing schedule. In this case, the House and Senate agreed to an omnibus healthcare package just as we were sending yesterday’s newsletter. To catch you up and try something new, we’re issuing our first-ever TrustWorks On Call Alert:

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Congress releases bipartisan health funding deal.

Yesterday afternoon, January 20, senior lawmakers from the House and Senate announced a bipartisan deal, one of three bills needed to fund the government through 2026, that includes important healthcare provisions. Here are highlights of what the bill does:

Prohibits pharmacy benefit managers (PBMs) from linking their payments to drug prices in Medicare; in Medicaid, bans PBMs from spread pricing, charging more to the plan than is paid to the pharmacy; and requires PBMs to pass through 100 percent of rebates to employer-sponsored health plans
Requires health systems to create a separate billing number for outpatient departments, a step toward site neutrality
Extends the Acute Hospital Care at Home waiver program through 2030, and Medicare telehealth flexibilities through 2027
Delays Medicaid Disproportionate Share Hospital (DSH) cuts until 2029, extends Medicare add-on payments for low-volume and rural hospitals until 2027, and allocates $4.6B to community health centers
Increases funding for the Department of Health and Human Services (HHS) by $210M, including boosts for the National Institutes of Health (NIH) and Centers for Medicare and Medicaid Services (CMS), while Centers for Disease Control and Prevention (CDC) funding remains flat

TrustWorks Take: The most notable aspect of this bill is what it does not contain: neither the affordability provisions of Trump’s “Great Healthcare Plan” wish list, nor any extension of the enhanced Affordable Care Act (ACA) subsidies. It also rejects the White House’s requests to further defund and reorganize biomedical research, instead preserving or increasing funding for HHS and its NIH, CMS, and CDC subagencies. By including some PBM reforms and taking a small step toward site neutrality, this bill goes beyond the bare minimum. However, it is still a stopgap measure meant to avoid this Congress’s second government shutdown and maintain continuity for popular policies like telemedicine payment and the Hospital-at-Home waiver program.

With time running out, we still face a shutdown risk from a few angles. The Senate is on recess this week, and the House is off next week, meaning it will be difficult to iron out any further changes to the bills. And while this healthcare measures in this bill should be relatively uncontroversial, it was paired with appropriations for the Department of Homeland Security. Senate Democrats could spike the deal over its lack of constraints on Immigrations and Customs Enforcement (ICE), even if that results in healthcare funding lapsing as well. Finally, President Trump has yet to weigh in on the bill, which he could interpret as a rebuke of his administration’s health policy vision. No one wants another government shutdown, but the path to avoiding one appears quite narrow.

Best Regards,
Anthony D’Eredita and TrustWorks Collective

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Concepts of a Great Healthcare Plan

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Concepts of a "Great" Healthcare Plan

January 20, 2026

This week, we go Beyond the Whiteboard to visualize how the US spends $5.3T annually on healthcare, and we’re Dialing In on how healthcare AI is very expensive to train. But first the news, starting with President Trump’s healthcare plan, which has barely developed since the debate stage:

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Newsletter Tags:

Trump, policy, strike, nurses, AI

*|END:IF|*

Behind the Headlines

Unpacking the forces driving healthcare’s biggest stories.

1. White House releases “Great Healthcare Plan” wish list.

Last Thursday, the Trump administration unveiled its “Great Healthcare Plan,” a brief list of healthcare policy suggestions it expects Congress to further define and enact.
These policies are intended to lower drug prices and premiums, hold big insurance companies accountable, and maximize price transparency.

The plan, which is “short on specifics,” includes nine distinct proposals:

Match prescription drug prices to other countries with Most-Favored-Nation pricing
Allow more medications to be sold over the counter
Allocate money formerly spent on insurance subsidies into some version of a health savings account (HSA)
Fund the Affordable Care Act (ACA) cost-sharing reduction program
Ban “kickbacks” from pharmacy benefit managers (PBMs) to brokerage middlemen
Require insurers to publish rate and coverage comparisons “in plain English”
Require insurers to publish the percentage of their revenues paid out to claims (also known as a medical loss ratio, which the ACA already requires insurers to publish)
Require insurers to publish the percentage of insurance claims they reject and average wait times for routine care
Require providers and insurers to post pricing and fees “publicly and prominently”

TrustWorks Take: These “concepts of a plan” are more signal than substance, as the Trump administration wants to be seen as responsive to concerns about healthcare affordability with the midterm elections approaching, without having any new ideas to deliver relief. Half the items in this list are already required by law to at least some degree; the “requirement” that insurers (continue to) publish MLRs is a particularly egregious example. Restoring cost-sharing reductions would provide ACA enrollees some relief, but President Trump would only be cleaning up a mess he created when he ended them in his first term.

For months now, Congress has been trying without success to pass something that addresses healthcare affordability. The absence of details in this outline of plan only makes their jobs harder. For example, the document makes clear that they should abandon any last hope of an ACA subsidy extension, but it doesn’t begin to describe how the direct contributions to fund Americans’ healthcare purchases should work. Time and again, this White House gives the impression of having no idea how the US healthcare system functions and no interest in learning. Without better leadership, even relatively popular and bipartisan healthcare policies will struggle to pass.

2. 15K NYC nurses enter second week of strike.

On Monday, January 12, nearly 15K nurses with the New York State Nurses Association (NYSNA) walked off the job at the NewYork-Presbyterian, Mount Sinai, and Montefiore health systems in New York City, marking the largest nursing strike in state history.
In contrast to a 7K-nurse strike in 2023 that resolved in three days with the nurses winning most of their demands, this strike has proven considerably more contentious, both at the negotiating table and in the battle for public opinion.
Contract talks, which have reportedly stalled, have centered around pay and benefits, staffing levels, and workplace violence protections; meanwhile, the health systems are spending over $100M on travel nurses to maintain patient services amid the strike

TrustWorks Take: Reporting on labor negotiations is always a game of “he said, she said.” The systems claim their nurses already make over $160K annually, and would earn about $250K annually after three years under the union proposal, which NYSNA says is exaggerated. (Base salaries in their expired contracts were around $120K last year, but that excludes overtime, experience differentials, and other add-ons.) For this contract, NYSNA began negotiations asking for 10 percent annual wage increases, whereas the systems were offering a flat $4,500 annual increase per nurse to wages and benefits. Minimum staffing ratios, which resulted in significant fines for some of these hospitals after violating the previous contract, have been another point of contention.

One reason behind the bitter intensity of this strike is that the financial picture of health systems has changed since the last time these nurses’ contracts expired three years ago. Instead of enjoying a recent infusion of pandemic relief funds, hospitals are now bracing for significant Medicaid cuts and an increase in uncompensated care, without much financial breathing room. Through Q3 of 2025, Montefiore posted an operating loss, Mount Sinai barely broke even, and NewYork-Presbyterian earned a 4.5 percent margin. The striking nurses may rightly feel that their work continues to be undervalued, but their employers are finding themselves near their breaking points as well.

3. ACA enrollment down about five percent at first look.

Last week, the Centers for Medicare and Medicaid Services (CMS) released preliminary data on 2026 ACA enrollment through January 3, ahead of the open enrollment period ending for most states on January 15.
As of January 3, 2026, ACA enrollment for all exchange plans sits at 22.7M, down 1.4M from the end of open enrollment last year, or down about 800K from last year’s comparable early snapshot.

TrustWorks Take: The Congressional Budget Office estimated that a failure to extend the enhanced ACA subsidies would cause 2M people to lose insurance in 2026. These early numbers appear more favorable, especially considering that at least some of 1.4M net reduction in ACA signups may have found coverage elsewhere. However, ACA enrollment may change more than usual as the year progresses, once people start receiving invoices for higher premiums. An act of Congress to address healthcare affordability, such as funding HSAs for bronze-tier enrollees, could incentivize more people to remain on their plan, but nothing on the table is expected to replace in full the impact of the expired subsidies.

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Beyond the Whiteboard

Visualizing key trends from the healthcare industry

Healthcare Growing Faster than Rest of Economy
In 2024, the US economy spent $5.3T on healthcare, an all-time high according to recently released data from CMS. Occupying 18 percent of the US economy, healthcare’s share of GDP in 2024 was only topped by 2020 and 2021, when COVID spiked our health spending and tanked the rest of our economy. According to CMS actuaries, “non-price factors were the driver” of growth, meaning that the volume and complexity of care increased more than the prices paid for that care. Relatedly, spending on care services, over 40 percent of which is hospital care, grew at more than double the rate of non-service spending. (The non-service category includes drugs and medical devices, commercial insurance overhead, and the government’s healthcare administration costs.) Moreover, across 2023-2024, personal healthcare spending grew at its fastest two-year rate since 1991-1992. There is no simple explanation for this sustained growth in the use of health services. Instead, it appears to result from some combination of temporal factors, like the uninsured rate hitting an all-time low and a post-COVID care rebound, coinciding with more systemic factors, including an aging population, the introduction of new and expensive pharmaceuticals, and the lack of effective price controls on healthcare services.

Infographic Tags:

NHE, utilization, CMS, inflation, economy

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Dialing In

Sharing insights from our work with clients

Training Doctor Chatbot
I first heard about Mercor late last year at an onsite with a multispecialty group, when a physician approached me during a break. She’d received a cold message on LinkedIn asking if she was interested in a highly paid, part-time, flexible gig using her medical expertise to improve the responses of a healthcare-focused AI application. She wanted to know if I could shed any light on this company, Mercor, which seemed to me like a nice way to make some easy money, but possibly too good to be true. Now that Mercor’s been subject to a Wall Street Journal article, I’m convinced of its legitimacy, but left wondering about its implications for healthcare.

A company like Mercor sits at the intersection of two ideas I’ve been hearing a lot these days: “AI is only as good as the data that trains it," and "Horizontal AI gets the attention, but vertical AI will get the returns." Unlike a "horizontal" product like ChatGPT, which knows a good bit about everything by training on the entire internet, Mercor’s promising to help assemble training data for “vertical” AI products, which go deep on a specific skillset or industry. In healthcare, that means paying physicians, who command high salaries, a lot of money to train these algorithms.

However, the massive debts AI developers are incurring to build data centers and train their data are premised on eventually charging the end user for these tools. In the long run, the hospitals and physician groups subscribing to these tools will have to derive a value greater than the costs it took to create them, plus the returns AI investors expect for their troubles along the way, for it all to be worth it. Where will providers find that value? Under a fee-for-service system, it all depends on delivering more care using fewer resources.

Inuulluaritsi (best regards),
Anthony D'Eredita and TrustWorks Collective

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Back in the New Year Groove

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Back in the New Year Groove

January 13, 2026

Welcome to TrustWorks On Call, here with your healthcare business and strategy 411 for the week for the first time in 2026. After a restful and restorative holiday, we’re excited to hit the ground running on what’s sure to be an eventful year, both for TrustWorks and the healthcare sector. 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 to illustrate where the Rural Health Transformation Program’s funds are going, and we’re Dialing In on how healthcare investors are feeling about 2026. But first, we’re giving you our TrustWorks Take on the news stories stealing headlines as 2026 kicks off:

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Newsletter Tags:

AI, Congress, ACA, vaccines, rural health

*|END:IF|*

Behind the Headlines

Unpacking the forces driving healthcare’s biggest stories.

1. OpenAI introduces ChatGPT Health.

Last week, OpenAI announced ChatGPT Health, a new product built into ChatGPT that will track and analyze a user’s health data across integrated apps and chatbot conversations in order “to support, not replace, medical care.”
According to OpenAI, ChatGPT Health pairs these new health data integrations, including medical records and Apple Health data, with enhanced data protections and privacy safeguards, such as a firewall that separates chat histories and protects medical conversations from becoming training data.
ChatGPT Health is only available on a limited waitlist for now, but the product is expected to roll out fully in the coming months.

TrustWorks Take: If OpenAI is to be believed, 230M people globally are asking health-related questions to ChatGPT every week, meaning a dedicated product tailored to the sensitivities of healthcare data was an inevitability. There’s clear demand among consumers for AI agents to dispense personalized medical advice, whether it’s a supplement to or a replacement for seeing a physician. OpenAI is not the only company trying to meet this moment, as Anthropic announced its Claude for Healthcare product just this week.

We have many questions about how companies can responsibly meet this demand. First, can a company like OpenAI be trusted with your health data? It claims that your health conversations won’t be used to train other models, but it will certainly use your health data to iterate and improve on the ChatGPT Health product itself. How will OpenAI’s privacy policies change as it introduces more advertisements or seeks new revenue streams to become profitable? (OpenAI is currently losing billions on operations each year).

Next, how will ChatGPT Health handle mental health issues? Tragic anecdotes are starting to amount into a narrative that the complimentary, people-pleasing nature of AI chatbots is feeding dangerous delusions among at-risk people resulting in violence and self-harm. OpenAI continues to release new mental health safeguards, but research has shown that AI chatbots systematically violate standards of practice even when prompted to follow certain guidelines. As long as developers keep pushing (and consumers keep adopting) this technology faster than regulators can create effective guardrails, our policy and legal frameworks will be responses to tragedies we failed to prevent.

Finally, how will ChatGPT Health resolve the tension between its users wanting clear answers to their medical problems and “responsible” medicine demanding cautious conservatism? The more caveats it includes, the less users will like ChatGPT Health’s answers, but also the less liability OpenAI would face for when people inevitably do use the tool as a replacement for seeing the doctor (despite the repeated disclaimers in the press release). This tension will only grow as OpenAI introduces advertising and other revenue streams, which could degrade the consumer experience. We expect ChatGPT Health to be a compelling product with widespread appeal, but watching how it evolves will tell us a lot about the business viability of consumer-facing AI agents.

2. Congress revives fight over ACA subsidies.

Last Thursday, the House of Representatives voted 230-196 to extend the lapsed Affordable Care Act (ACA) enhanced subsidies for three years, with 17 Republicans joining all House Democrats in support of the bill.
This bill is not expected to pass the Senate, where a moderate caucus is still working on its own bipartisan solution, and President Trump suggested he may veto an extension bill if one made it to his desk.

TrustWorks Take: Congress begins the new year the same way it closed out last year, debating over several competing plans to extend or replace the ACA subsidies, none of which appear to have the votes to pass both the House and Senate. We can expect the rest of this midterm election year to look a lot like this, as both parties may focus more on getting the other side on the record voting against popular initiatives, like addressing healthcare affordability, rather than working together on bipartisan causes.

Congress also faces urgent deadlines to keep the government open, as most federal agencies are only funded through the end of January on a continuing resolution. Fresh off the heels of the longest government shutdown in US history last fall, neither party wants to trigger another shutdown, but Congress has less than three weeks to pass seven appropriations bills. With the Senate on recess next week and the House on recess the week after, averting a partial shutdown will be a close call.

3. RFK Jr. updates food pyramid, childhood vaccine schedule.

Last Wednesday, Health Secretary Robert F. Kennedy Jr. unveiled a new food pyramid that’s been turned upside down to encourage the consumption of protein, dairy, and healthy fats, along with fruits and vegetables, while discouraging excess consumption of highly processed carbohydrates; alcohol guidelines were relaxed from a specific limit per day to a general encouragement to “consume less.”
Earlier last week, the Centers for Disease Control and Prevention (CDC) announced changes to the schedule of vaccines recommended to American children, reducing the number of diseases kids should be inoculated against from 17 to 11.

TrustWorks Take: An election year usually means Congress won’t accomplish much in terms of health policy, but we can expect Secretary Kennedy’s Department of Health and Human Services to stay busy promulgating rules to “Make America Healthy Again.” These two actions to kick off the new year, a relatively innocuous albeit unscientific change to dietary guidelines and a severe blow to our vaccine recommendations that will leave more children exposed to disease, represent Secretary Kennedy’s two main preoccupations in office. In both cases, the net result of his agency’s actions is to further undermine trust in the public health consensus and contribute to the polarization of Americans’ health information diets. When federal guidance becomes polarized, clinicians inherit the confusion, as they too often lack the bandwidth for complex conversations and shared decision-making. Patients, left to make their own decisions on conflicting information, will inherit the risk.

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Beyond the Whiteboard

Visualizing key trends from the healthcare industry

Rural Health Program Lacks Funds for Transformation

At the end of last year, the Trump administration announced the first year of awards for the Rural Health Transformation Program, doling out $10B of the program’s total $50B. The allocation formula guaranteed half the funds be evenly split between all states, and half the funds be awarded based on a state’s rurality and health needs, along with a state’s willingness to implement the “Make America Healthy Again” agenda. Because of this formula, the fewer rural residents a state has, the more dollars per rural resident it received. So, while Texas was given the most money for having the largest rural population, it only amounts to about $53 per rural resident in 2026. Rhode Island, on the other end of the spectrum, received one of the smallest awards, but (depending on how you calculate the rural population of such an urbanized state) it’s receiving thousands of dollars per rural resident. Even for the low-population, highly rural states like Alaska, Wyoming, and Montana that the program was successfully designed to favor, the funding amounts lack the scale to be transformative. The $50B pot over five years pales in comparison to the $137B estimated reduction in Medicaid spending on rural areas over the next ten years, both of which were scheduled by last summer’s budget reconciliation law. Rural healthcare is looking to stop the bleeding, and a one-time cash infusion paired with even deeper cuts will not be enough to recover, let alone transform.

Infographic Tags:

rural, Medicaid, MAHA, innovation

*|END:IF|*

Dialing In

Sharing insights from our work with clients

Deal Flow Picking Up Speed in 2026
Ending 2025 in NYC with a flurry of strategy-setting sessions, I had one of those weeks where the city’s networking functions came alive, making me believe in the heightened expectations being laid for 2026. Investor interactions seemed more purposeful, as multiple breakfast introductions turned into a dozen separate conversations by dinner with folks from PE, VC, and strategic investors. Everyone was hunting for healthcare opportunities to feed the 2026 capacity awaiting deployment, leaving me to wonder what’s different about now.

Some first-of-year follow-ups have convinced me that investors’ stores of dry powder, or excess capital, have been largely restored, but they’ve also learned some lessons from 2021-2022, when our zero-interest rate policy meant it didn’t cost much to make a bad bet. The 2021–2022 cycle funneled investment dollars into telehealth, digital front doors, subsidized growth, and mere rollups. When funding tightened, a lot of that speculation came down to earth.

I now see 2025 as a reset year, in which the first six months were marked by relative caution as we adjusted to Trump 2.0, and the second half saw an investment boom as the pro-business policies, AI advancements, and interest rate cuts took hold. We now head into 2026 with more clarity and direction. Interest rates are down and steadier, so underwriting doesn’t feel like guesswork. Liquidity means more than just relying on an IPO or straight sale, as investors have regained flexibility through sales to new secondary buyers, continuation funding, or refinancing, which keeps capital recycling. And of course, every funding conversation features AI, but less as the product itself, and more as fuel to supercharge their problem-solving pitch. One investor summed it nicely: 2025 was “Does it work,” and 2026 is looking like “How fast can it scale, and how much of the engine is AI driven?”

Be Good,
Anthony D'Eredita and TrustWorks Collective

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Healthcare’s Naughty and Nice List

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Healthcare’s Naughty and Nice List

December 16, 2025

Welcome to TrustWorks On Call, here with your final healthcare business and strategy 411 for the year. We’ll be taking off the rest of 2025 to unplug, unwind, and enjoy the holidays with our families, and we hope our readers get to do the same. But if you do happen to find yourself talking healthcare at a holiday party, please consider giving the gift of mentioning our newsletter and encouraging them to subscribe!

This week is a special Christmas edition. First, we’re sharing Santa’s list for who was “naughty” and who was “nice” in healthcare in 2025. Then, we close out the year with our healthcare-themed version of 12 Days of Christmas, made the old-fashioned way (without AI assistance). After a year of discussing news that tended toward dreary and dismal, we thought it was worth ending the year by spreading some good cheer! But first, the naughty list:

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Newsletter Tags:

vaccines, policy, tariffs, GLP-1s, special

*|END:IF|*

Behind the Headlines

Unpacking the forces driving healthcare’s biggest stories.

The 2025 Healthcare "Naughty" List

Congress: For its action on Medicaid cuts and inaction on health insurance affordability.
Tariffs: For raising costs for patients and providers and creating mass strategic uncertainty.
Insurance costs: For their rapid growth, not just in the Affordable Care Act (ACA) exchange population, but for employer-sponsored insurance and Medicare coverage as well.
Measles: For their worst outbreak in over 30 years, totaling over 1,900 cases, 218 hospitalizations, and three deaths, setting up the US to lose elimination status next month.
Robert F. Kennedy, Jr.: For orchestrating the Make America Healthy Again agenda that undermines vaccines and discredits public health experts.

TrustWorks Take: This year saw the most Congressional attention on healthcare since the late Senator John McCain spared the ACA in 2017, and the results were not favorable. This summer’s One Big Beautiful Bill Act scheduled an unprecedented $1T of healthcare cuts over the next decade, and Congress followed that up by failing to extend the enhanced ACA subsidies. All told, an estimated 16M people could lose health insurance by 2034 because of the choices made by Congress this year. That'll get you on the naughty list.

Tariffs and insurance costs go hand-in-hand to end up on this side of the list, as insurers named the pricing impact of tariffs on pharmaceuticals as a common justification for requested rate increases this year. Even if most pharmaceuticals end up exempted from any tariff, the uncertainty alone drives up the cost of doing business for the entire sector. Insurance costs could probably make healthcare’s naughty list every year, but the addition of unnecessary trade restrictions and loss of federal subsidies puts them over the top.

Continuing the theme of national self-sabotage, the last two naughty listers are both responsible for the ongoing outbreak of measles across the country: the measles disease itself, which is caused by the Rubeola virus, and Health Secretary Robert F. Kennedy Jr., who has done more than anyone to mainstream anti-vaccine beliefs. To include a highly contagious, sometimes-deadly disease on healthcare’s naughty list is not surprising, but is extremely frustrating when we have a highly effective vaccine for it. The only thing more frustrating has been watching our Health Secretary realize his dream of destroying our vaccine infrastructure under the guise of restoring “public trust” and “safety.”

The 2025 Healthcare "Nice" List

Dr. Susan Monarez (on behalf of all the civil servants pressured out of government): For standing up for vaccines, public health, and evidence-based science at personal sacrifice.
Biomedical researchers: For breakthroughs on the likes of custom gene editing and xenotransplantation despite research funding cuts.
GLP-1 drugs: For delivering on their "wonder-drug" reputation, with new indications, better formulations, and lower prices.
Hospital-at-home programs: For exemplifying how good healthcare policy can spur health system innovation.
The Affordable Care Act: For holding strong, after so many challenges, as the focal point and high-water mark of all healthcare legislating.

TrustWorks Take: In a difficult year for scientists and civil servants, the federal workers who stuck to their beliefs at the cost of losing their jobs deserve extra commendation. Former Centers for Disease Control and Prevention (CDC) Director Dr. Susan Monarez, fired weeks after her Senate confirmation because she wouldn’t accept Secretary Kennedy's vaccine recommendations, became the most high-profile example of a civil servant standing up for science, but she’s joined by the other CDC officials who resigned after her, ousted top vaccine regulator at the Food and Drug Administration Dr. Peter Marks, and the over 1,000 current and former Department of Health and Human Services workers who called for Secretary Kennedy to resign. Especially for those who have struggled to find new employment, may their stockings be full this time of year.

Biomedical researchers have also inspired us this year, in spite of mass funding cuts to federal research grants. Thanks to federal support at every step of the way, a baby was treated for his life-threatening genetic disorder using a revolutionary CRISPR therapy, and he's enjoying a happy and healthy life eight months later. Elsewhere, a man in New England lived for six months with a kidney grown in a genetically modified pig, which is seen as a major step forward even though he returned to dialysis. The support of the US government, which has funded almost 90 percent of biomedical research grants in recent years, was essential for these breakthroughs to occur, and the withdrawal of US research funding could deprive us of untold future breakthroughs.

While the likes of pig-organ transplants and CRISPR therapies remain relatively niche, GLP-1 drugs solidified their place as healthcare’s latest miracle drugs. There’s still concern over their prices, which are driving up insurance premiums, but President Trump's GLP-1 pricing deals for tariff relief, robust competition between Eli Lilly and Novo Nordisk, and the introduction of new oral formulations should help improve affordability and access for these drugs.

Our final two nice listers exhibited impressive resilience. First, we want to commend the resilience of hospital-at-home programs, which were suspended during the government shutdown, as we discussed last month in a great interview with Dr. Taki Michaelidis, the medical director for UMass Memorial’s hospital-at-home program. But nothing matches the resilience of the defining healthcare legislation of our era, the Patient Protection and Affordable Care Act, which celebrated its 15th birthday in March. Labeled the “most challenged statute in American history” since at least 2020, the ACA survived another Supreme Court ruling this year, which upheld the preventive services requirement. The ACA took some hits with the massive Medicaid cuts and the expiration of enhanced subsidies, but it remains the focal point for all healthcare policymaking and a reminder that things used to be worse.

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Beyond the Whiteboard

Visualizing key trends from the healthcare industry

“Nice” Reasons for Hope in Healthcare
Although nothing compares to the operational challenges of 2020 as COVID swept the nation, 2025 was as difficult a year for healthcare strategy as any in recent memory. Nearly every organization we work with put their big decisions on hold for the first half of the year, as we watched the Trump administration reshape the federal government, impose and revise massive trade restrictions, and slash federal healthcare spending. Since then, the second half of the year has felt like a mad scramble to prep for an oncoming hurricane, as we can see the consequences of cutting Medicaid, ACA funding, and research grants on the horizon, but for now the air is still relatively calm and dry. The one good thing about living in such cloudy times is the presence of so many silver linings. Vaccines are under attack, but public health officials are standing up for them. Research grants are being cancelled, but we’re still finding new and amazing ways to save patients’ lives. Congress can’t agree on much of anything with healthcare, except that hospital-at-home programs are working and worth extending. Focusing on the small victories doesn’t make our big problems go away, but it does make them more bearable.

Infographic Tags:

ACA, policy, strategy, optimism, special

*|END:IF|*

Dialing In

Sharing insights from our work with clients

Twelve Days of (Healthcare) Christmas
On the twelfth day of Christmas
My healthcare system gave to me
Twelve AI apps for labor savings
Eleven startups seeking funding
Ten ASCs a-opening
Nine rural hospitals closing
Eight PE platforms growing
Seven MA plans disbanding
Six nurses striking
Five vac-cines
Four tariff changes
Three telehealth extensions
Two board retreats
And less patients in the ED

Thank you for tuning into the final TrustWorks On Call of the year. For our next round of TrustWorks Takes, you will have to wait until January 13, 2026. Thank you for your help all year in supporting TrustWorks On Call. We are so excited for the bigger and better things we have planned for next year, and we hope you stick with us as we grow. And if you ever need help thinking through a healthcare problem, don’t hesitate to reach out to us.

Best Regards,
Anthony D'Eredita and TrustWorks Collective

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Children’s Vaccine Defense

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Children's Vaccine Defense

December 9, 2025

This week, we go Beyond the Whiteboard to illustrate how the healthcare lobby’s spending compares to other industries, and we’re Dialing In on what autonomous vehicles can teach us about AI adoption. But first, the news, leading off with a story about exactly what we feared would happen under the leadership of a man who used his nonprofit, Children’s Health Defense, to push vaccine skepticism for decades:

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Newsletter Tags:

vaccines, policy, hospital-at-home, ACA, AI

*|END:IF|*

Behind the Headlines

Unpacking the forces driving healthcare’s biggest stories.

1. ACIP ends hepatitis B vaccine recommendation for newborns.

Last Friday, the Advisory Committee on Immunization Practices (ACIP) voted 8-3 to no longer recommend that all newborns receive hepatitis B vaccines; instead, mothers who test negative for hepatitis B should consult their healthcare provider on whether to vaccinate their newborn against the disease.
ACIP now suggests that parents without hepatitis B wait at least two months to administer the first dose of the hepatitis B vaccine to their child, instead of within 24 hours after birth, and that antibody tests should be used to help determine whether the second dose is needed.
The recommendation to vaccinate, within 12 hours of delivery, the children of mothers testing positive for hepatitis B remains unchanged.

TrustWorks Take: Ever since Health Secretary Robert F. Kennedy Jr. fired and replaced every member of ACIP with hand-picked vaccine skeptics in June, a rollback of the childhood vaccine schedule has felt inevitable. In September, ACIP dipped its toes into these waters by ending its recommendation of the combination measles, mumps, rubella, and varicella/chickenpox (MMRV) vaccine, favoring instead the separate MMR and varicella vaccines, which are more common anyway. After punting on the hepatitis B schedule last time, the committee has now replaced its recommendation, which had stood for 35 years and proved itself to be effective and safe, with an arbitrary and evidence-free standard that leaves newborns unprotected for the first two months of their life. Infants infected with hepatitis B have a 90 percent chance of contracting the chronic form of the disease, and a quarter of them will go on to die prematurely because of it. Instituting universal hepatitis B vaccinations reduced the number of US children contracting the disease each year from 18K to under 1K.

Under Secretary Kennedy’s leadership, which culminates his 20-year career of opposing vaccines, more changes to the childhood immunization schedule are inevitable. This hepatitis B decision is not expected to impact insurance coverage, but future recommendation changes might. Many state and local vaccine policies, such as those governing schools and private insurers, are tied to ACIP's recommendations, and ACIP decides which vaccines poor children can get for free. Some states may have to change their laws if they want to unlink their policies from ACIP’s recommendations. Even where formal policies don’t change, the loss of public trust in vaccines and public health authorities will do their own damage. Federal policy tilting away from evidence and toward ideology leaves clinicians, payers, public health agencies, and patients in confusion as they respond to the instability.

2. House passes five-year extension for hospital-at-home waiver.

Last week, the House of Representative voted unanimously to extend the Medicare Acute Hospital Care at Home waiver program until September 30, 2030, after the waiver program was allowed to expire during the 43-day government shutdown.
The bill still needs approval from the Senate, where it enjoys bipartisan support but does not yet have a voted scheduled; the bill must be signed into law before January 30, 2026 in order to avoid the hospital-at-home waiver expiring again.

TrustWorks Take: Health systems, telemedicine groups, and all the other stakeholders involved in hospital-at-home care finally got what they’ve been asking for in a five-year extension (caveat on the Senate voting the bill through in time). Prior to this, the longest extension of the Medicare waiver had been for two years, back in 2022, which has presented challenges given that the process of setting up a hospital-at-home program can take upwards of a year. Despite this, over 400 hospitals were participating in the program prior to the government shutdown, and many others are expected to launch their own programs now that they have the regulatory certainty needed to secure multi-year contracts and capital. Going forward, hospital-at-home should no longer be considered a pilot project, but rather an operating-model decision.

3. Congress scrambles on subsidy replacement plan.

According to the latest reporting, Congress's response to the expiration of the Affordable Care Act (ACA) enhanced subsidies has taken the form of at least three competing plans: a “clean” three-year extension backed by Democrats, an unreleased plan to fund health savings accounts (HSAs) endorsed by House Republican leadership, and another unreleased plan currently being drafted by more moderate members of each caucus that could involve a diminished subsidy extension.
Senate Majority Leader John Thune (R, SD) has promised Senate Democrats a vote on the clean extension this Thursday, but its prospects of passing are very low; the other plans are expected to receive votes before the year is over and the subsidies officially expire, but the details behind each plan are still unclear.

TrustWorks Take: There’s very little hope left for an extension of the enhanced subsidies into 2026, and even if a miracle passed through Congress, the complications of applying the subsidies this late into open enrollment would negate many of their benefits. Instead, Congress will either do something superficial to help healthcare affordability on the margins, like expanding funding for HSAs, or it will do nothing to help the millions of Americans facing skyrocketing healthcare costs. In response to the subsidies expiring, one in four ACA enrollees expect to go without health insurance, while others will try to cut back on healthcare services and other household spending.

Moderate House Republicans are leading the charge for doing something, anything to take home to their constituents in anticipation of affordability being a deciding factor in next year’s midterm elections. It will be a very tight needle to thread, crafting legislation that is bipartisan enough to win 60 votes in the Senate while appealing to a majority of the Republican-controlled House. President Trump’s endorsement could become the difference-maker for any hopeful bill, but so far his only directive has been to “give money directly to the people,” which leaves room for interpretation.

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Beyond the Whiteboard

Visualizing key trends from the healthcare industry

More Dollars than Results for the Healthcare Lobby

Healthcare policy has occupied center stage on Capitol Hill at many points this year, and the money spent by healthcare companies and interest groups on lobbying reflects that. According to OpenSecrets, corporate contributors representing pharmaceuticals, providers, and health insurers spent nearly $700M in the first nine months of 2025 to influence the direction of health policy in Washington, upping last year's spending through that point by over 15 percent. The healthcare products (i.e. pharmaceuticals) and healthcare services (i.e. providers) lobbies are only surpassed by energy and natural resources lobby (think Big Oil) in spending this year. Although the health insurers’ lobby may seem small in comparison, Blue Cross Blue Shield ($21M) and UnitedHealth Group ($10M) were two of the highest-spending companies in any industry.

All this money begs the question, what is it buying? Setting aside questions of potential corruption, it’s hard to map the money spent on healthcare lobbying this year to favorable policy. Hospitals were uniformly opposed to the $1T of Medicaid cuts in this summer’s budget reconciliation package, and yet it passed. Providers and payers alike would prefer to see the ACA enhanced subsidies extended, but they are unlikely to get their wish. One explanation for the diminishing influence of the healthcare lobby could be rising partisanship. For hospitals, their pitch as vital employers serving district needs are losing their power, as members of Congress focus more on national headlines and party directives.

Infographic Tags:

policy, Congress, lobbying, pharma, providers

*|END:IF|*

Dialing In

Sharing insights from our work with clients

From AI Drivers to AI Doctors?
I was thinking about the clinical applications of healthcare AI while reading a recent New York Times piece highlighting safety data from Waymo’s autonomous vehicles (AVs). Across 100-million miles of sample size, Waymo’s AVs experienced 91 percent fewer severe crashes and 80 percent fewer injury-related crashes compared with human drivers on the same roads. If a clinical treatment produced that level of benefit, we’d stop the trial early and adopt it system-wide, but the problem is that we are instinctually much less tolerant of machine errors compared to mistakes made by humans. The consequences of human error (23 deaths per 100-million miles driven) we accept as the cost of driving compared to the relatively rare instances of AV error (2 deaths per 100-million miles driven) is just one example, as this dynamic also plays out in healthcare.

The most AI-forward groups I work with have been happy to outsource administrative tasks to AI assistants, but they’ve guarded their tasks of clinical judgment much more carefully. As one physician told me, “If I make a mistake, I can explain why. If a machine makes a mistake, no one wants to hear the explanation.” This fear of machine failure means the boldest advances in clinical AI will likely come from outside our health system, particularly lower-income countries with much less access to specialist physicians. As with driving, it may feel like our clinical practices are working just fine, only for a new way of doing things to emerge and save lives on a staggering scale.

Best Regards,
Anthony D’Eredita and TrustWorks Collective

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Policy Shakeups, Governance Wakeups

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Policy Shakeups, Governance Wakeups

December 2, 2025

To celebrate our return from Thanksgiving break, we’re featuring another tool in the TrustWorks Collective toolkit: our Annual Board Assessment Survey. You can learn more about how it works in our Dialing In section, where we interview its creator and TrustWorks Collective Senior Advisor, Laura Sebastyn. And our Beyond the Whiteboard section takes a look at the booming GLP-1 market. But first, the news:

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Newsletter Tags:

policy, vaccines, site-neutral, pharma, governance

*|END:IF|*

Behind the Headlines

Unpacking the forces driving healthcare’s biggest stories.

1. GOP struggling to unite around healthcare plan.

Last week, President Trump was expected to announce a new policy framework that would have extended the Affordable Care Act (ACA) enhanced subsidies for two years with limitations, including new income caps and minimum premium payments, only to abandon the plan amid pushback from Congressional Republicans.
The Senate is committed to voting next week on a healthcare proposal, but elected Republicans are reportedly divided between a centrist camp supporting a limited subsidy extension, which could resemble the President’s pulled framework, and a more conservative wing that prefers to continue rolling back the ACA while redirecting some funding to Health Savings Accounts (HSAs).

TrustWorks Take: Rep. Marjorie Taylor Greene’s surprise retirement announcement has become an unexpected canary in the coal mine for broader Republican dysfunction on healthcare. After criticizing her party for allowing the ACA subsidies to expire without an alternative plan, Rep. Greene announced she will be retiring on January 5, 2026. Reportedly, she’s one of many House Republicans who feel disrespected by the White House and party leadership. Healthcare policy is at the center of these disagreements, as the White House has failed to craft a unifying plan that satisfies both moderate Republicans, worried that premium spikes will hurt their reelection campaigns, and party hardliners, who view ACA subsidy extensions as a nonstarter.

Because extending the ACA subsidies is so popular, with even half of Republican voters in favor, elected Republicans have put themselves between a rock and a hard place. Attempting to thread the needle (and fulfill President Trump's call to send healthcare subsidies “directly to the people”), Senate Republicans are exploring ways to redirect funds toward HSA-style accounts, but HSAs can’t be used to pay for premiums, which have become the focal point for rising healthcare costs. Any measure that can clear both chambers at this point would likely be too little, too late to address voters’ sticker shock on healthcare premiums. With retirements shrinking the Republicans’ House majority, their room for error on crafting such a measure has never been smaller.

2. FDA connects COVID shots to child deaths ahead of vaccine meeting.

A Food and Drug Administration (FDA) internal memo, written by the director of the FDA’s vaccine division Dr. Vinay Prasad, claimed without evidence that “at least 10 children have died after and because of receiving COVID-19 vaccination,” and outlined planned revisions to vaccine approval processes.
Dr. Prasad wrote the memo, leaked last Friday, in advance of the Advisory Committee on Immunization Practices (ACIP) meeting this week, in which the recently reconstituted committee will be discussing and potentially amending the childhood vaccine schedule.

TrustWorks Take: The FDA has yet to produce any supporting evidence for its claim that the COVID vaccine directly caused the deaths of at least ten children. The agency has only stated that these deaths were recorded in the Vaccine Adverse Event Reporting System (VAERS) and ignored or covered up by the Biden administration. A chorus of experts have expressed skepticism over these causal claims, which are difficult to prove from self-reported VAERS cases and need to face peer review by a medical journal. However, for an administration that wants to promote vaccine skepticism, this memo could provide sufficient cover for any upcoming changes to the childhood vaccine schedule.

Under Health Secretary Robert F. Kennedy Jr.’s leadership, the Trump administration keeps finding new ways to undermine vaccine confidence. Once-trusted regulatory bodies like ACIP have become politicized, and official government sources are now promoting debunked theories around vaccines and autism. Dissenters, such as former Centers for Disease Control and Prevention (CDC) Director Dr. Susan Monarez, are pushed out and replaced by vaccine critics, like the CDC's new deputy director. These moves, which are damaging in their own right, have also laid the groundwork for ACIP to upend the childhood vaccine schedule in its meeting later this week. This would trigger a cascade of changes to state and local vaccine policies impacting requirements for schools, childcare centers, and pediatric practice standards.

3. OPPS final rule eliminates Inpatient-Only List.

Last month, the Centers for Medicare and Medicaid Services (CMS) published its 2026 Hospital Outpatient Prospective Services Payment System (OPPS) and Ambulatory Surgery Center (ASC) final rule, headlined by a 2.6 percent Medicare pay bump, up slightly from the proposed rule.
The final rule confirmed that Medicare will be phasing out over three years the Inpatient-Only (IPO) List, which currently bars 1,731 billing codes from being performed in outpatient settings.
In another push toward site neutrality, hospital-owned outpatient facilities will be paid to administer medications at the same rate as physician offices, which CMS projects will save $290M next year.

TrustWorks Take: In the final year of the first Trump administration, CMS promulgated a rule to phase out the Medicare IPO List, only for the Biden administration to undo those changes and restore the IPO List in 2022. So, it’s no surprise that the second Trump administration picked up where it left off by reissuing this policy. Trump's CMS has made it clear that it does not recognize a patient-safety distinction between the inpatient and outpatient procedures, and it will be far more permissive toward procedures performed at ASCs. This has huge implications for hospitals because, as evidenced by knee and hip replacements, procedures tend to migrate quickly to their lowest-cost allowable settings. And once Medicare covers something on an outpatient basis, commercial payers are quick to follow.

Many health systems are still holding onto inpatient procedural revenue as an important cross subsidy, but the march toward site neutrality feels inevitable. The transition can be slowed down or sped up, but it’s going in only one direction. The only remaining strategic question is how quickly systems can prepare for it. For this reason, we created our Site-Neutral Payment Calculator, which allows providers to quantify the financial implications of site-neutral reform across their own procedures and care settings.

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Beyond the Whiteboard

Visualizing key trends from the healthcare industry

Imagining a Ceiling for GLP-1 Spending
Starting with the FDA’s approval of Ozempic to treat Type 2 Diabetes in 2017, the hype around and demand for GLP-1 drugs has skyrocketed, driven by the breadth of conditions they can treat and the impressive results they return, especially for weight management. In addition to Type 2 Diabetes, GLP-1 drugs have now received FDA approval to treat obesity, cardiovascular disease, chronic kidney disease, serious liver disease, and sleep apnea, and they’ve shown promise with other conditions like substance use disorder and osteoarthritis. (There’s also been hope that GLP-1s could treat Alzheimer’s, but Novo Nordisk just announced unsuccessful early trial results on that front.) List-price sales of GLP-1s increased from $14B in 2018 to $72B in 2023, with sales growth accelerating over that period as obesity-indicated GLP-1s started hitting the market.

In light of such rapid growth, it’s worth exploring how much our healthcare system could spend on GLP-1s at their peak. As of May 2025, about 12 percent of US adults had ever taken a GLP-1 drug, and another 14 percent were interested in taking them. That works out to about one in four adults, or 66M people, who can be considered in the market for GLP-1s. Prices vary widely based on insurance, but if each of these 66M adults paid the TrumpRx cash-pay price of $350 per month for their supply, that would amount to a collective $277B spent on GLP-1s per year. For comparison, US net pharmaceutical spending reached $487B in 2024. Of course, a variety of practical limitations would prevent a single class of drugs from ever comprising over half of all drug spend. However, Eli Lilly’s Mounjaro and Zepbound have been found to be cost-effective at TrumpRx pricing (but not current prices), suggesting that, at a societal level, the averted cases of obesity, diabetes, and cardiovascular disease would generate significant returns on investment.

Infographic Tags:

pharma, GLP-1, diabetes, obesity, forecast

*|END:IF|*

Dialing In

Sharing insights from our work with clients

Three Questions with Laura Sebastyn, MSM
Principal and Senior Advisor, TrustWorks Collective

1. What inspired you to create our Annual Board Assessment Survey?
Anytime we take on work with a physician group or health system, I’m always paying close attention to their governance. Organizations often engage us to address visible challenges that, once you peel back the layers, stem from a governance structure that isn’t fully aligned with the group’s current needs. Governance gaps can show up in many ways: interpersonal tensions, limited engagement, process inefficiencies, or simply having too many voices involved in every decision. It’s helpful when we can see these patterns, but real progress requires the board to see them too. That’s what sparked the idea for the Board Assessment Survey. We designed a self-assessment tool that provides both quantitative and qualitative insight into how the board views its own performance. It’s become an incredibly effective tool for constructive dialogue and meaningful improvement.

2. What makes this Board Assessment Survey different from others?
Most board assessment tools fall into one of two traps: they are either overly complicated and buried in too much theory and jargon, or so generic that they fail to reveal anything meaningful let alone actionable. We built our survey very intentionally to avoid both pitfalls. It's streamlined, but not simplistic. Every question is designed to generate insights boards can act on, and the data it creates allows them to rank and tailor their focus as appropriate.

Once we determine who should participate—typically the full board of directors, but also often committees, advisory boards, and physician leadership—we gather emails and administer the survey electronically. The survey questions are grouped by theme, covering areas such as meeting effectiveness, clarity of roles, conflict resolution, and decision-making discipline. After we gather the responses, we analyze the results, which include input from individual confidential discussions, and present a synthesis back to the board, highlighting strengths, misalignments, and practical recommendations. Much of the survey’s impact comes from bringing issues to the surface in a structured, neutral way. Once the board has that shared understanding, finding the right solutions becomes a lot easier.

3. What kinds of lessons do boards learn from taking this survey?

The survey works by holding up a mirror to the board, so there’s as many lessons to learn as there are challenges in physician group and health system governance. One big theme, though, is recognizing when the governance structure hasn’t evolved alongside an organization’s growth. Many organizations create their governance structure early on and rarely revisit it, even as their size, strategic direction, and organizational complexity change. For example, I once worked with a multi-specialty group that guaranteed every specialty a seat on the board. That worked just fine in the beginning, but as new specialties were added, the board grew large enough that decision-making became cumbersome. The assessment revealed that most people on the board recognized the need to streamline its structure, and because this insight came from the members themselves, it served as a foundation for making that change. This is exactly why we advocate for annual assessments, to ensure governance remains adaptive, responsive, and aligned with where the organization is headed.

Best Regards,
Anthony D’Eredita and TrustWorks Collective

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Open Enrollment Blues

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Open Enrollment Blues

November 18, 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!

One programming note, we’ll be off celebrating Thanksgiving next week, meaning you’ll have to wait until Tuesday December 2 for your next TrustWorks On Call. In the meantime, we are wishing for all our readers to have a restful, grateful, and delicious Thanksgiving break. We are thankful as always for your readership.

This week, we’ve got double coverage on health insurance. First, we go Beyond the Whiteboard with a graphic the growth of employer health plan costs, then we’re Dialing In on the expansion of catastrophic coverage in the ACA market. But first, the news:

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Newsletter Tags:

telehealth, policy, mergers, innovation, insurance

*|END:IF|*

Behind the Headlines

Unpacking the forces driving healthcare’s biggest stories.

1. Telehealth flexibilities briefly extended as government reopens.

As part of last week’s “minibus” bill to end the government shutdown, Congress extended Medicare telehealth flexibilities and hospital-at-home waivers, which had lapsed for the 43-day shutdown, until January 30, 2026.
The Drug Enforcement Agency (DEA) also published a notice last week that flexibilities allowing the teleprescription of controlled substances will be extended for a fourth time, which is expected to last through the end of 2027.
An $8B cut to Medicaid Disproportionate Share Hospitals (DSH), scheduled by the Affordable Care Act (ACA) and continuously delayed since 2014, briefly took effect during the shutdown, but Congress has again delayed these cuts until the end of the current continuing resolution on January 30, 2026.

TrustWorks Take: The deal to reopen the government kicked the can down the road for several healthcare policy items, but not very far. Providers' collective exhale of relief over the reinstatement of Medicare telehealth flexibilities, hospital-at-home waivers, and averted DSH cuts will be immediately followed by another round of collective breath-holding as the same provisions hang in the balance during funding negotiations this January. The DEA managed to extend teleprescriptions of controlled substances without a lapse, but the Trump administration has not made public progress on a permanent framework since it rescinded a proposed rule issued by the outgoing Biden administration.

These repeated, short-term extensions are bad policy because they inhibit large-scale, long-term investments from provider organizations, which are necessary for initiatives like hospital-at-home programs to reach full scale. The Medicare telehealth flexibilities enjoy bipartisan support, negligible fiscal impacts, and widespread industry backing, specifically for an extension of at least five years. However, as long as Congress keeps legislating against the funding clock, we’re likely to keep getting short-term thinking instead of long-term extensions.

2. Indiana approves COPA hospital merger against FTC wishes.

Last week, Indiana Governor Mike Braun announced that the state health department had approved Union Hospital’s acquisition of Terre Haute Regional Hospital from HCA Healthcare under the state’s first-ever Certificate of Public Advantage (COPA), which bypasses federal antitrust regulation in exchange for stronger state oversight.
Union Health lobbied Indiana to pass its COPA law in 2021, specifically so that it could acquire Terre Haute Regional, for which it submitted an application in 2023, before pulling that application amid pushback from federal regulators.
Union Health’s resubmitted application in 2025 was still opposed by the Federal Trade Commission (FTC) and Indiana’s attorney general, but the Indiana Department of Health found that the benefits of the merger outweighed the harms, which include creating a “monopoly for inpatient acute care services in Vigo County.”

TrustWorks Take: COPAs are premised on the idea that regulation can replace competition as the primary constraint keeping hospital prices low and quality high. Although this could be true in theory, hospital mergers that used COPAs have posted a bad track record, according to FTC research. For example, the 1995 COPA that created Mission Health in North Carolina from two competitor hospitals included margin and cost controls, but the system was still found to have increased its commercial inpatient prices by over 20 percent more than its peers during its first decade under the COPA. Then, after Mission Health lobbied North Carolina to repeal its COPA, its prices increased by another 38 percent. Not only are COPA regulations often ineffective at controlling price growth, but also when COPAs expire (as is the case in Indiana), they leave behind an unregulated monopoly.

Despite some disappointing results, state governments keep turning to COPAs because they are an imperfect answer to an important question: how can we support and sustain struggling hospitals? Other research has found that “COPA regulation, if properly designed, can effectively constrain prices in the absence of competition among providers.” The problems arise because it is very difficult for state governments to design a regulatory scheme that prevents evasion while being flexible enough to allow for industry changes over the full COPA duration. Still, for many state legislators, the logic is that it’s better to try a regulated monopoly, with price increases perhaps higher than ideal, than risk an inpatient care desert due to a hospital closure.

3. Researchers find answer to pig-kidney transplant rejections.

A team of researchers at NYU Langone Health identified and reversed a set of immune reactions that drive the human body’s rejection of genetically modified kidneys grown in pigs for human use, a process known as xenotransplantation.
By mapping the immune activity around the transplant, the researchers identified that organ rejection was driven by antibodies and T cells that could be tempered with Food and Drug Administration-approved drugs.
Their report, published last week in Nature, was based on monitoring the transplantation of a genetically engineered porcine kidney into a brain-dead recipient, with a beating heart and on a ventilator, for 61 days after surgery.

TrustWorks Take: At this year’s International Xenotransplantation Association conference held last month, scientists celebrated the success of the first two patients to live with porcine-grown kidneys for at least six months (one of which has since been removed), as well as the launch of clinical trials for xenotransplantation in the US and other countries. The field still faces challenges around minimizing rejections by moderating immune response, which this breakthrough by the NYU Langone researchers helps address, and preventing crossover events of zoonotic diseases, but we’ve reached a turning point now that xenotransplantation is happening successfully.

The stakes behind finding a scalable source for kidney donations are massive. In the US, nearly 555K Americans are on dialysis, and about 90K people are registered on the kidney transplant waiting list, but less than 30K kidney transplants are performed each year. The widespread availability of effective and safe porcine kidney transplants could extend the lives of the thousands of people each year who die waiting for kidney transplants, while also generating significant savings for our healthcare system.Almost one in four dollars Medicare spends goes to treating kidney disease. Spending on dialysis for end-stage renal disease occupies seven percent of Medicare’s budget, despite caring for only one percent of its beneficiaries.

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Beyond the Whiteboard

Visualizing key trends from the healthcare industry

Commercial Insurance Premium Increases Feel Unsustainable
Every fall, KFF publishes perhaps the authoritative account of commercial group-coverage price growth with its Employer Health Benefits Survey. Its lookback on 2025 found that family premiums grew by over 6 percent this year, with employers contributing over $20K to annual family premiums, which now total nearly $27K. That equates to an astounding 32 percent of median household income.

It didn’t use to be like this. Since 2010, employer premium contributions have more than doubled and worker contributions have increased 71 percent, whereas the Consumer Price Index has only risen 48 percent and household income just 22 percent in that time. The result of health insurance costs outpacing inflation growth for so many years is the suppression of profit margins for businesses and wages for workers, putting American firms at a competitive disadvantage to companies abroad. Americans say that “costs” are the most urgent health problem facing this country, so it’s no coincidence that opinions on the state of US healthcare coverage are at a fifteen-year low. With each successive year, we ask the question with new urgency, when will employers reach their breaking point?

Infographic Tags:

insurance, premiums, employers, payers, inflation

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Dialing In

Sharing insights from our work with clients

The Catastrophic Coverage Conundrum
Healthcare is one of those industries where you can’t always avoid taking your work home with you. My family (that is myself, my wife, and our son) recently got our 2026 ACA exchange renewal notice here in Virginia. The same UnitedHealthcare family plan that cost $2,393 per month in 2025 is jumping to $3,310 per month, a 38% increase. We’ve been seriously considering self-insuring and pairing it with a catastrophic-only policy. And as it turns out, the Trump administration was one step ahead of us, having announced in September that it’s now much easier to qualify for a hardship exemption to purchase a catastrophic-coverage ACA plan, which used to be heavily restricted for those 30 and older.

This expansion of catastrophic coverage at a time when healthcare has never been less affordable may seem a little cruel, but it’s also a natural endpoint of trendline we’re on. In 2024, even as the US uninsured rate was near its all-time low, almost one quarter of working-age adults were considered "underinsured,” due to their out-of-pocket cost exposure. As people shift toward lower-premium, higher-deductible plans in response to rising plan prices, we’re encouraging the idea that health insurance is to be had but not used, except in emergencies. Without the ACA subsidies’ premium support, this problem will only intensify, triggering yet another vicious cycle. The problem is that premiums are what make insurance work: everyone pays into a pool, so that those who need help get covered by those who don’t. Instead, we’re losing the point of insurance to the size of the deductible, which the deregulation of catastrophic coverage will only exacerbate. The two groups of people selecting catastrophic coverage this fall will be people of means who can afford to self-insure and those who can’t afford anything but catastrophic coverage, when in a more just system the former would be subsidizing the latter.

Thank you for tuning into this week’s TrustWorks On Call. Please enjoy your Thanksgiving holiday, and we’ll see you the Tuesday after that with another round of TrustWorks Takes. With your help in sharing TrustWorks On Call (subscribe here!), we’re living up to the Collective in TrustWorks Collective. And if you ever need help thinking through a healthcare problem, don’t hesitate to reach out to us.

Best Regards,
Anthony D'Eredita and TrustWorks Collective

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Site (Neutral) Unseen

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Site (Neutral) Unseen

November 11, 2025

This week comes with another special announcement. In service of always finding new ways to empower providers organizations, we’re thrilled to share the launch of the TrustWorks Collective Tools page. This week’s featured tool is our Site-Neutral Payment Calculator: a free, web-based tool that allows hospitals, physician groups, and other stakeholders to compare their Medicare rates to a potential site-neutral payment scenario. You can learn more about how it works in our Beyond the Whiteboard and Dialing In sections. But first, the news:

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Newsletter Tags:

Congress, ACA, Pharma, pregnancy, site-neutral

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Behind the Headlines

Unpacking the forces driving healthcare’s biggest stories.

1. Congress to end shutdown without ACA subsidy extension.

On Monday night, eight senators in the Democratic caucus voted for a Republican plan to reopen the government with a continuing resolution that funds all federal agencies through at least January 30, 2026, but does not address the expiring Affordable Care Act (ACA) enhanced subsidies.
As concessions for their support, Senate Democrats were promised a Senate floor vote to extend the ACA subsidies for another year, and federal workers laid off during the shutdown will be rehired.
The House will take the final vote to fund the government as soon as Wednesday, which would end the longest shutdown in US history after 42 days.

TrustWorks Take: The shutdown began with Senate Democrats taking a stand on preserving affordable healthcare, but for the aisle-crossing Senators, the mounting consequences on air travel, nutritional aid, and the federal workforce ultimately proved more pressing. Even if a one-year extension of the ACA subsidies passes in the Senate, the measure would have low prospects for success in the Republican-controlled House.

Meanwhile, Republican Senators have resurrected talks of the ACA being a “broken system” that may need replacing, and President Trump is calling for insurance subsidies instead to be sent “directly to the people” to purchase their own healthcare, neither of which amount to serious or actionable policy proposals. Republicans have also expressed interest in more marginal policy tweaks, like restoring ACA cost-sharing reductions, and expanding the use of health savings accounts and individual coverage health reimbursement arrangements (ICHRAs). By the time Congress is ready to legislate on healthcare coverage again next year, an estimated 4.8M people will have become uninsured, while costs will have soared for millions more.

2. White House strikes GLP-1 deals with Eli Lilly, Novo Nordisk.

Last Thursday, the White House announced that Eli Lilly and Novo Nordisk have committed to selling their GLP-1 treatments to all Americans in direct-to-consumer (D2C) channels for $350 per month, to Medicaid programs for $245 per month, and to qualifying Medicare beneficiaries, via a pilot program, for a $50 monthly copay; these deals do not apply to commercial drug plans.
The drugmakers also agreed that, if their oral GLP-1 medications receive regulatory approval, the lowest doses of these drugs will be sold D2C for $149 per month.
In exchange, Eli Lilly and Novo Nordisk have been granted three years of tariff relief, and Novo’s oral formulation of Wegovy and Lilly’s orforglipron, which could become the first approved GLP-1 pills, received National Priority Vouchers that fast track regulatory review time.

TrustWorks Take: This seems to be the Trump White House’s most impactful healthcare deal to date. For their products already on the market, Lilly and Novo lowered their D2C prices by between $50 and $150 per month, good for cash-price discounts of 15 to 30 percent. Compared to Wegovy's list price of $1350, Medicare paying $245 for the drug amounts to an 82 percent discount. For reference, that’s a larger discount than any obtained by the first round of the Medicare Drug Price Negotiation Program, which ranged from 38 to 79 percent off list price. It’s not clear how the discounts under this deal will interact with the statutory Medicare drug negotiations, which are taking place for Ozempic and Wegovy this year.

More impactful yet will be the introduction of oral GLP-1 medications at affordable prices. As of May 2025, about 12 percent of Americans had ever taken a GLP-1 drug, and another 14 percent were interested but had yet to, because of issues like cost and coverage. Even if it’s just for the starter dose and paid out-of-pocket, $150 per month for a daily supply of pills to achieve weight-loss results in line with weekly injections should prove incredibly popular with consumers and greatly expand the market of regular users. And we won’t have to wait long to see, as Eli Lilly’s orforglipron is expected to receive regulatory approval by the end of this year.

3. Investigation connects C-section overutilization to fetal heartbeat monitoring.

A New York Times investigation into why the US rate of C-sections is so high identified continuous, electronic fetal-heartbeat monitoring during labor and delivery as a key driver of potentially unnecessary C-sections, as using it increases the likelihood of Cesarean delivery by 63 percent.
Despite a large body of evidence attesting that electronic monitoring does a poor job of detecting fetal distress, a combination of factors have preserved the practice as a mainstay in American hospitals: risk-averse and change-resistant clinical standards, health system investments in remote patient monitoring (RPM), patient expectations for their care, liability protections from malpractice suits, and the allure of cutting-edge healthcare technology, including unproven AI software that analyzes fetal heartbeats.

TrustWorks Take: Our healthcare system’s stubborn commitment to electronic fetal monitoring, which stands in contrast to peer nations, is a telling example of how and why our healthcare system so often fails to achieve value. Obstetricians know that electronic monitoring during labor is ineffective, but its costs are abstracted and externalized to payers and patients, who associate closer monitoring with better care despite its hidden risks to their health and life. Payers’ tools to change provider behavior are also imperfect. In the case of labor and delivery, the RPM may not even be separately billed, leaving payers nothing to deny. Meanwhile, UnitedHealthcare just announced a sweeping and controversial policy to deny coverage for most uses of RPM, not just the lowest-value use cases like fetal monitoring.

Given health systems’ growing interest in scaling care by extending their labor supply, the significant investments they’ve made in RPM, the returns they’re seeing from RPM in its other applications, and the rise of AI algorithms meant to detect important patterns in patient data, the incentives for fetal monitoring may continue to outweigh the evidence against it. Unfortunately, “the worst test in medicine” won’t go away without a fight.

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Beyond the Whiteboard

Visualizing key trends from the healthcare industry

Preparing for Site Neutrality

Medicare’s embrace of site-neutral payments could significantly reshape how hospital outpatient services are reimbursed, with major implications for provider revenue, care delivery strategy, and regulatory planning. Between Congress considering site-neutral payment reforms that could reduce Medicare hospital reimbursements by upwards of $150B over a decade, and the Centers for Medicare & Medicaid Services (CMS) proposing to equalize payments for drug administration at hospital outpatient departments (HOPDs) and physician offices, it is clear that momentum toward site neutrality is accelerating.

Our Site-Neutral Payment Calculator simulates payment differentials under one version of site-neutral payment reform, in which Medicare payments to HOPDs would equal the lower of Physician Fee Schedule (PFS) Facility rate and PFS Non-Facility rate, applied to the combined professional and technical payment for each. For a simulated HOPD orthopedic practice, the impact of this reform would be devastating, leading to a potential loss of 86 percent of Medicare revenue. Much of this revenue loss comes from CPT 29881 (Knee Arthroscopy), which would see its reimbursement fall from $3,602 to $518, an 85 percent reduction driven by the removal of the technical payment of $3,084.

Of course, instead of this worst-case scenario, CMS could lower the HOPD technical payment to the ambulatory surgery center (ASC) facility rate, which would still incur a significant revenue hit. No matter which version of site-neutral reform takes hold, high-technical surgical services will face the greatest exposure, as site neutrality would align total reimbursement to a much-lower benchmark than HOPD facility costs.

Infographic Tags:

site-neutral, Medicare, CMS, outpatient, physicians

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Dialing In

Sharing insights from our work with clients

Three Questions with Michael Levine, MBA
Senior Advisor, Financial and Data Analytics, TrustWorks Collective

1. Why did you build this site-neutral payment calculator?
We were working with a physician group that was planning to expand its hospital-based outpatient footprint and wanted us to model the potential impact of site-neutral payment reform. The CFO viewed site neutrality as a matter of when, not if, and wanted to understand how their projected revenue would change if all outpatient services were reimbursed at office-based rates instead of higher hospital rates. When we looked for a tool to simulate that scenario, we realized there wasn’t one available.

So, I built one. The result is an interactive calculator that allows providers to quantify the financial implications of site-neutral reform across their own procedures and care settings.

2. What assumptions are built into this tool, and how do they shape interpretation?
The challenge in designing any forward-looking model is that CMS has not yet defined a single permanent framework for site-neutral payment reform. The calculator doesn’t predict the future, but it provides a credible, directional view of how payment equalization could affect providers under the policy patterns CMS has used to date.

The core assumption is that CMS will continue to anchor site-neutral reform to the PFS Facility rate, which represents the physician professional payment when a service is performed in a HOPD. Based on recent rulemaking, CMS typically applies a “lower-of” rule. That means capping total reimbursement at the lower of the PFS Facility or Non-Facility rate, rather than averaging rates or raising office payments. Because the PFS Facility rate is usually the lower of the two, it serves here as the standardized benchmark for site-neutral comparison.

It’s also unclear whether any revenue reductions from site-neutral reform would be redistributed to maintain budget neutrality (as CMS could do administratively) or retained as budgetary savings (which would require legislation). In either case, the calculator provides a realistic, evidence-based illustration of what those shifts would mean for specific services in any locality.

3. How can providers use the insights this tool generates?
Using 2025 Medicare rates, the calculator allows providers to input their actual practice data and see the projected financial impact of site neutrality on their organization. It displays, for each code and setting, how payments would change if CMS applied a site-neutral cap, and it aggregates those differences to quantify the overall effect on Medicare revenue.

We intend for this tool to evolve with the policy environment. When 2026 rates are finalized, I’ll be updating the tool to reflect the latest data. I also plan to incorporate ASC facility rates into the model, to allow for comparison across more settings.

Understanding the financial exposure is only the first step. Our goal is to help health systems and physician groups use this information to inform strategic planning—reassessing site-of-service decisions, operational structures, and physician alignment strategies while there’s still time to adapt.

Best Regards,
Anthony D’Eredita and TrustWorks Collective

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