Healthcare Reading Tea Leaves

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https://www.semafor.com/newsletter/11/05/2026/semafor-healthcare-reading-tea-leaves

It’s healthcare costs, stupid. Washington is still collecting itself after a blue tsunami delivered House and Senate majorities on Tuesday — but Democrats are already gearing up a healthcare agenda to goad President Donald Trump into vetoing policies voters support.

Easy initial targets include rolling back Medicaid cuts and restoring Affordable Care Act enhanced tax credits that the GOP allowed to lapse, two policies hitting household budgets as healthcare premiums spike. But lawmakers will need to figure out how to pay for those efforts, and California voters demonstrated this week that even in a blue wave, raising taxes on wealthy Americans is challenging.

Other legislative pushes could preview what Democrats run on in 2028.

Progressives will inevitably demand a House vote on a Medicare for All bill, even if Rep. Hakeem Jeffries, the expected House speaker, would prefer to first have a “family conversation.” Trump’s propensity to support most-favored-nation drug pricing legislation could mean Democrats could attempt to codify paying what other wealthy nations offer for drugs.

“Democrats and President Trump talk similarly about addressing drug prices, so there may be opportunities for a strange-bedfellows kind of deal,” said Larry Levitt, who will become the CEO of KFF in January.

Sen. Bernie Sanders, I-Vt., will try to use his likely perch atop the Senate Health Committee to add dental, vision, and hearing coverage to Medicare. And expect a fight over whether to reauthorize user fees that fund roughly half the FDA — legislation that pharma considers must-pass and that Sanders has opposed for decades.

Of course there’ll be a contingent of Democratic lawmakers intent on using this moment to drag health insurer and drugmaker executives before Congress and slow-roll Trump nominees in open roles atop the FDA and HHS.

But the real opportunity for Democrats is to lay out what they will do if they take control of the presidency.

Democrats put healthcare at the center of their “affordability” message in key races. Democratic candidates, party committees, and outside groups spent a combined $226 million on healthcare-related TV ads supporting Democrats in competitive House and Senate races — dwarfing all other issues, including Donald Trump ($151 million), inflation ($141 million), and taxes ($185 million), according to an analysis of AdImpact data by the nonpartisan Cook Political Report.

Democrats sought to tie the 2025 Republican tax bill, which cut Medicaid and allowed subsidies for Affordable Care Act premiums to expire, to voter worries about rising healthcare costs as they pressed their affordability agenda. Democrats used a similar playbook in 2018, winning control of the House on a message of protecting the ACA from repeal.

Voters have historically trusted Democrats more than Republicans on healthcare. A recent Conference Board survey found Democrats held an 18-point advantage over Republicans on the question of healthcare affordability. NBC found Democrats held a 22-point advantage on “handling healthcare.”

This week’s blue wave wiped out Republican policymakers who’d been vying to define the party’s health agenda.

Sen. Roger Marshall, R-Kansas, a physician and founder of the MAHA Caucus, lost to Democrat Adam Hamilton on Tuesday. (Hamilton aired ads featuring patients who Marshall sued for unpaid medical bills.) Marshall was arguably the strongest ally of HHS Secretary Robert F. Kennedy, Jr. in the Senate. He was also in contention to become the top Republican on the powerful Senate health committee, where he could have prioritized MAHA legislation and oversight priorities if Republicans had retained Senate control.

Sen. Susan Collins, R-Maine, who was defeated this week, and Sen. Bill Cassidy, R-La., who lost a primary to a Trump-backed candidate this spring, are both Kennedy critics who led key health-related committees. Collins, the chair of the Appropriations Committee, protected funding at the NIH and CDC as the White House pushed for further cuts over the last two years. Cassidy, a physician, chaired the health committee, where he regularly challenged Trump nominees during nomination hearings. We reported earlier this year that Sen. Josh Hawley, R-Mo., may emerge the frontrunner for the top Republican spot on the health panel, as other contenders may prefer to take top GOP seats on other committees.

Reps. Mariannette Miller-Meeks, R-Iowa, and Richard Hudson, R-N.C., also both lost reelection, and their absences will erode the Republican bench on the House Energy and Commerce Committee in the next Congress.

Democrats will have a pediatrician in the Senate after Annie Andrews emerged victorious in South Carolina. Andrews ran on a detailed, wonky healthcare platform that includes increasing scrutiny of hospital mergers, setting site-neutral Medicare payments to standardize reimbursement, reforming Medicare Advantage payments, and replacing prior authorization with a new system.

Other new Democratic faces like Michigan Sen.-elect Abdul El-Sayed, an epidemiologist and former Detroit health director, and Troy Jackson of Maine, a logger-turned-politician, campaigned on Medicare for All. El-Sayed and Jackson were two of the only Democrats in competitive states to run on it. Americans increasingly support the concept of a single-payer system, long championed by the Democratic Party’s progressive wing: In October, 66% of respondents told KFF they supported Medicare for All, up from 53% six years ago. But when told such a program may require paying higher taxes, support dropped to 35%.

State healthcare ballot initiatives tested the public’s mood on abortion rights, Medicaid and new approaches to healthcare funding. Voters largely supported existing abortion rights and Medicaid programs, but were reluctant to try novel tax schemes to pay for healthcare.

In Nevada and Virginia, voters established state constitutional rights to abortion, though the measures didn’t expand access. In Missouri, voters struck down an attempt to reverse a constitutional right to abortion passed two years ago, as well as a ban on gender care for minors. Idaho voters, by contrast, rejected a measure to expand abortion access by restoring rights eliminated by a near-total ban that took effect in 2022.

In South Dakota, voters blocked a measure that would have allowed the state legislature to end funding for a Medicaid expansion approved by voters in 2022 if the federal government were to cover less than 90% of the cost.

But there are limits to what voters will support to bolster Medicaid: A tax on billionaires in California never got the traction organizers had hoped, and the measure remains far behind in the ballot count. The one-time, 5% levy was supposed to shore up existing healthcare programs and compensate for 2025 Medicaid cuts. In New Mexico and Rhode Island, meanwhile, voters endorsed a more conventional approach to funding narrower healthcare programs: They approved new bonds.

CVS unwinding its 2018 purchase of Aetna is not quite the biggest, fastest corporate M&A about-face of all time, but it’s close. The breakup, which essentially calls time on the $69 billion merger that aimed to create a healthcare giant across insurance and pharmacies, joins the top tier of corporate M&A whoopsies. It’s also a warning signal to other healthcare companies trying to read the tea leaves in Washington.

The original thesis of the CVS deal was that combining Aetna’s insurance data and CVS’ 10,000 retail pharmacies would cut costs and make care more seamless. But the savings were small relative to the deal’s price tag, and its drug-middleman business became a political drag on the retail arm. A new era of healthcare consolidation ensued, lacing together huge swaths of an uber-regulated industry into a conglomerate that critics said led to less competition and higher consumer prices.

Now, as Democrats take Congress, healthcare companies are only bracing for more regulatory scrutiny and political pressure.

“We believe, based off of where we are and how we’re performing, the businesses are best served by splitting,” CVS CEO David Joyner told The Wall Street Journal. A sign that he, indeed, is reading the room.

The Election Ends Tonight. Their Campaign Starts Tomorrow.

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https://healthcareuncovered.substack.com/p/the-election-ends-tonight-their-campaign

Health care costs dominated the midterms. The industry that profits from those costs has spent decades learning how to make voters’ demands disappear once the ballots are counted.

After the votes are counted, the candidates and their exhausted staffs will finally get some rest. The people I used to work with in the insurance business won’t. Inside that world, an election was never the end of a fight over health care. It was the start of a new phase, and it was usually the phase that mattered most.

If I were still in my old job, I likely would soon be sitting in a briefing with Bill McInturff and some of his colleagues at Public Opinion Strategies, the Republican polling firm he co-founded, which had insurers’ lobbying and PR group AHIP as a client when I was in the industry. They would walk us through their latest poll results, not just on the candidates but on what people were saying about the issues, especially health care. At that briefing or one soon after, they would tell us how various talking points and phrases were likely to resonate. We used that advice in our speeches, press releases and media statements and in the talking points we wrote for our lobbyists.

McInturff’s firm has been doing this kind of work for a long time. It did the message and ad testing for the Harry and Louise commercials, which were widely credited with helping defeat the Clinton health plan in the 1990s, and it calls its specialty “combat message development.” McInturff also conducts the NBC News poll with Democratic pollster Jeff Horwitt, and their final survey before today’s election gave Democrats a 52% to 45% lead among registered voters. “Democrats are in total control of the 2026 issue agenda,” McInturff told NBC, noting that only voters who see immigration as a top issue are breaking for Republicans right now. I don’t know whether his firm still works for AHIP, but I would be surprised if the industry weren’t getting this kind of briefing from someone this week.

None of my former colleagues have leaked this year’s strategy memos to me, but I know how the industry has responded to elections like this one, and it has plenty of reasons to be nervous right now.

What voters said

Candidates in both parties spent this year talking about affordability because voters left them little choice. Health care ranked second in political ad spending in competitive Senate and House races, according to the Cook Political Report, as STAT noted this morning. In KFF’s final tracking poll before the election, conducted in September, six in 10 voters said they were worried about affording health care. Health care tied with gas as their top money worry, and voters trusted Democrats over Republicans on health care costs by 42% to 22%.

Only 15% of adults said our health care system works well enough to need minor changes or none at all. Support for Medicare for All reached 66%, the highest KFF has recorded and up from 53% in 2020. What the industry will find especially alarming is that more than half (52%) said they would favor Medicare for All even if it eliminated private insurance companies. In 2020, only 37% said that.

I can assure you the industry has never seen numbers this bad before. And those numbers and history tell me what my former colleagues will do next.

We have seen this movie

The best guide to the coming months is what happened after the 2018 midterms, when health care also helped drive the results. At least 48 incoming freshmen had campaigned on Medicare for All or something similar. Insurers and its allies had already seen that coming and formed the Partnership for America’s Health Care Future over the summer.

Internal documents obtained by The Intercept and Documented showed that as soon as the results were in, the Partnership began telling reporters that candidates who embraced Medicare for All had lost too, pointing to races like Kara Eastman’s in Nebraska. It used research from Third Way, a business-friendly Democratic think tank, to argue that the winners hadn’t really won on that issue. (Third Way is already signalling it will try to do the same thing this cycle by trying to point the finger of blame at “the government.”) “’Medicare for All’ didn’t win,” an insurance brokers’ lobbyist whose group backed the Partnership told The Intercept. The group also hired consultants with deep Democratic ties and planned a speakers bureau of former Democratic officials who could argue that expanding Medicare was bad policy and bad politics.

Two years later, the Partnership announced new ads to run during the Democratic National Convention, aimed at the party’s public option pledge. Within 24 hours, The Lever reported, anonymous Democratic aides were telling The Hill that the party would likely start with more modest fixes to the Affordable Care Act if Biden won. No federal public option ever became law.

The pattern goes back much further. I was still at Cigna in 2007 when AHIP hired the PR firm APCO to blunt the impact of Michael Moore’s Sicko and make sure any government-run health plan or option looked politically impossible. And in 2009 and 2010, while the industry was publicly claiming a seat at the reform table and insisting it could be trusted to work in good faith with President Obama and Congress, AHIP quietly sent about $100 million to the U.S. Chamber of Commerce to help fund the fight against the Affordable Care Act. While the industry couldn’t kill the ACA, it was able to call on a friend, Senator Joe Lieberman of Connecticut, who caucused with the Democrats, to get the public option stripped out of the bill. Killing the public option was always Job One for the industry.

What to watch for

Here is what I would expect to see in the weeks and months ahead, regardless of which party comes out on top:

  • A quick verdict on what the election meant: Watch for stories, op-eds and think tank memos (like those from Third Way) declaring that voters want modest, practical fixes and that candidates who promised more ran too far ahead of the public. Some of these will be sincere analysis pieces. Others will trace back to people paid to reach that conclusion, so it’s always worth asking who funded the study.
  • Fear, aimed exactly where the polling says it works: The industry reads polls closer than anyone. KFF found that 76% would oppose Medicare for All if they heard it could mean delays in tests and treatment, 64% if it meant higher taxes and 61% if it threatened the current Medicare program. You will hear about waiting lines, taxes and seniors. You will also hear that the current system offers “choice,” a word my colleagues and I loved because it tested so well. That messaging obscures the reality that your employer or your insurer’s narrow network usually does the choosing, but the messaging works with many people.
  • Messengers you might trust: People tend to discount what an insurance executive says, which is why the executives rarely say it themselves. When Congress was considering a Patients’ Bill of Rights in the late 1990s and early 2000s, I worked behind the scenes with industry peers and our PR firm, Porter Novelli. Our big coup came when we got the National Federation of Independent Business to carry our message. Readers saw small business owners worried about costs. They didn’t see us. Expect to see doctors, small business owners, former officials and friendly Democrats playing that role again.
  • A deal that looks like a win: The industry prefers a voluntary pledge to a new law. Last year, AHIP announced with great fanfare that insurers would voluntarily ease prior authorization, and its message to Washington was that no one needed to pass a law to make them behave. The industry also doesn’t mind legislation that sends more public money to insurers. Some of those proposals may well help people. The question to ask about any of them is whether it changes how insurers make their money or just gives them more of ours. The research firm Capital Alpha is already telling clients to expect “deal-making by threat of regulation.” STAT also reports some bipartisan support for restoring at least part of the enhanced Affordable Care Act premium subsidies, though Republicans would demand reforms in return. Any such deal deserves the same question.
  • Division and misdirection: Progressive Democrats will be set against moderates, and Republican voters will keep hearing that fraud is the real problem. Blame will land on hospitals, physician practices and drug makers, and some of it will be deserved. All of it helps if it keeps anyone from looking closely at what the seven biggest for-profit insurers have become.

The money behind it

All of this is expensive, but the industry has boatloads of the money we pay in premiums and taxes to fund its war chest. AHIP reported $5.32 million in federal lobbying in the first quarter of this year, which was its highest quarterly total on record at the time. It spent $17.23 million in 2025, up from $11.77 million in 2024. When I added up lobbying by the big insurers and four of their trade and advocacy groups last year, I found $476.5 million in just over five years. Those totals don’t include most of the advertising, and all of it ultimately comes out of our premiums and our taxes.

And you’ll see from the latest update to the Health Insurance Influence Tracker, a project of the Center for Health & Democracy that I lead, that the campaign money reaches both parties too. The tracker tallies that ten health insurer PACs gave about $4.2 million directly to candidates on this year’s congressional ballot. But the money wasn’t spread around evenly, about 97% went to incumbents, regardless of party, while challengers and candidates running for open seats shared just about $128,000. In only two of the 470 House and Senate races did both candidates receive money from those PACs. The industry wasn’t betting on who would win, but the folks who already hold power.

The first test

We won’t have to wait for the new Congress to see how this plays out. Government funding runs out on Dec. 11, and more than a dozen health care policies expire at the end of the year, making year-end spending legislation the likely vehicle for health care measures in the short term. Lobbyists do some of their best work on bills like that, which tend to come together quickly and with little public attention.

What you can do starting tomorrow

The industry’s strategy depends on the rest of us moving on, so here are a few questions to put to the winners, whichever party they belong to.

  • Will you take insurer PAC money? You can look up your members of Congress and see what they have received so far.
  • What are your plans to address the amount of money people actually pay? Ask about premiums, deductibles and copays together, because a lower premium can hide a higher deductible.
  • Will you scrutinize how insurers make their money – and do something about it? That includes prior authorization, Medicare Advantage overpayments and the pharmacy benefit managers that insurers own.
  • Will you hold public hearings on insurers’ business practices? Insurers should have to explain them on the record, and voters should get to watch.
  • Who wrote your talking points? When a lawmaker tells you voters don’t really want big changes, ask where that idea came from.

When I was in the industry, we knew that public anger over health care came in waves. We also knew the anger usually receded when Congress turned to other things and the news moved on, and we planned our work around that. For a long time, we were right to count on it. Whether we are right this time depends on what voters do after today.

Signs of the Times: True Leadership

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A powerful leader doesn’t fear questions—they fear losing control. 🧠

True leadership requires the courage to face criticism, welcome different perspectives, and prioritize truth over personal power.

Plato’s philosophy reminds us that wisdom begins with questioning, not blind obedience.

Understanding human nature, developing critical thinking, and recognizing the difference between authority and wisdom can transform how we see leadership.

Get Your Healthcare at … Costco?

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Large companies have been spending the last several years getting into—and sometimes subsequently shrinking—their footprint in the healthcare business. Some of them, such as pharmacy retailers like CVS and Walgreens, could be considered “healthcare adjacent” because of their pharmacy component, which is already considered healthcare. As discussed below, these entities have been entering the healthcare space in a few different ways—although primarily through the expansion of primary care and clinic services. This blog provides a high-level overview of how and where these expansions have taken place, how Costco’s latest venture differs from others, and considers important questions for policymakers that these shifts raise.

Both Walgreens and CVS began providing “direct-to-consumer” retail healthcare clinic services within their stores in 2013 and 2016, respectively. Over time, Walgreens expanded the ability of its clinics to provide not just primary care but services for people with chronic health conditions in 2013. Then, in 2020/2021, they created a partnership with an entity known as VillageMD to staff and run hundreds of their healthcare clinics. The growth of these clinics has reversed in recent years, with many closings happening across the country after the company was acquired by private equity firm Sycamore Partners in 2025. As of August 2026, Walgreens was still operating in the neighborhood of 8,000 clinics nationwide.

In the case of CVS, it began providing primary care clinic services in 2016 through the acquisition of MinuteClinic. According to its website and the National Retail Federation, CVS grew to be the largest provider of “retail” healthcare in the US. Perhaps more significant for CVS was its acquisition in 2018 of Aetna health insurance company. The intent of the merger was to provide more coordinated care to a larger share of the population, building on Aetna’s and CVS’s respective strengths. Additionally, in 2023, CVS acquired Oak Street Health, which focuses on helping older adults stay healthy through routine primary care like vaccinations and screenings.

But the growth of these large entities may slow. Just this week, it was reported that CVS plans to split its insurance and pharmacy businesses. David Joyner, the current chairman and CEO of CVS Health, noted of the reason behind the move that “each company will have greater flexibility to adopt the technologies that best fit its needs, improve efficiency and more effectively adapt to the regulatory and other dynamics.” This kind of decision may therefore draw in part from broader public concerns that the size of such entities may result in further scrutiny on the insurance side of their business.

Other big retail companies, such as Walmart and Amazon, have also launched healthcare services. Walmart was operating health clinics as well, but began discontinuing and closing retail clinic services in 2024 because of financial losses. Currently, however, they still provide pharmacy services as well as preventive and health insurance coverage services. Amazon, on the other hand, dramatically expanded its footprint in 2023 when it partnered with One Medical to offer AI-powered in-person and virtual care options with various health systems across the US.

Another way these companies are entering the healthcare space is through partnerships with or acquisition of existing healthcare companies. The latest company to do so via a strategic partnership is Costco, a large wholesale membership company known for selling groceries and other items such as gasoline, eyeglasses, and pharmacy products, at lower cost. In August 2026, Costco announced a partnership with the SCAN Group, which, according to SCAN’s website, provides new ways to deliver evidence-based patient-centered care to older adults. SCAN, a not-for-profit, has several companies that provide everything from healthcare for the unhoused, in-home care, insurance coverage, and primary care—all focused on older adults. They operate in states such as California, Nevada, Texas, Washington, and New Mexico.

What is different about Costco’s arrangement compared to CVS, Walgreens, Amazon, or Walmart is threefold: Costco’s venture into healthcare is (1) not-for-profit, (2) focused on the aging/senior population, and (3) delivering services in the long-term care space such as care management and insurance products (including a Medicare Advantage plan).

With all these nontraditional entities entering the healthcare space in various forms, there are important questions for policymakers and regulators to consider. These include:

  • What are the goals of these entities that are more recently entering the healthcare space versus traditional healthcare providers?
  • What is the impact of these entities on the healthcare marketplace?
  • What is the impact of these healthcare entities on health outcomes for people, and is this a good or bad development generally?
  • What other role should government play as it relates to these changes?
a large sign spins on top of a Caduceus. the five panels of the sign show the logos of amazon, CVS, Costco, Walmart, and Walgreens.
What are the goals of these entities that are more recently entering the healthcare space versus traditional healthcare providers?

The goals of these companies’ ventures into healthcare are not always explicitly stated. For some, the goal was to expand customized consumer experiences. Presumably, each saw a need/demand by customers for more services. For others, entering healthcare may be part of an overall business growth strategy. Still, for others, it may be about integrating care and moving toward value-based outcomes. In the case of Costco, it is targeting a specific market (the aging population) in a different way (insurance). Given the footprint of these entities in healthcare, policymakers may want to consider what is in the best interest of the public good and whether such organizational ventures are resulting in positive or negative impacts—or perhaps a little of both. This leads one to ask a few more questions…

What is the impact of these entities on the healthcare marketplace?

The entry of these entities is seen as disruptive to the traditional healthcare system. But disruption may be viewed as both a positive and negative development for the industry. Disruption can force innovation and broaden choice. At the same time, it is possible it may shift where and from whom consumers access healthcare. One such example is the company created by Mark Cuban, Cost Plus Drugs, which is meant to disrupt the pharmacy industry and lower costs for consumers. Developing a rubric and measures by which to gauge impacts on things such as quality, cost, and outcomes in health should be a consideration for policymakers. Policymakers may also choose to allow new marketplace entrants to see if there might be a positive impact, such as more choice of providers by consumers or a better consumer experience. Monitoring these impacts may be difficult, but some states have started such efforts by better understanding who is entering the market. They are doing so by requiring the reporting of what are known as “material transactions” (i.e., purchases or acquisitions between businesses of a certain amount). Ultimately, if a venture is not needed, is not sustainable, or is done suboptimally, consumers may “vote with their feet” and choose not to use the service.

What is the impact of these healthcare entities on health outcomes for people? And relatedly, is this a positive development generally?

Many of the objective analyses on the entry of nontraditional companies into healthcare have focused on market impacts and not necessarily overall outcomes for consumers. This is, in part, because population health impact is harder to track. But the individual companies that have entered healthcare have done their own monitoring of outcomes. For example, CVS reports that they saw an average reduction in A1C of 1.9 percent (i.e., lower blood sugar, which reduces harm from Type 2 Diabetes) through their Transform Diabetes Care initiative and a 44 percent reduction in hospital admissions through Oak Street Health, which provides primary and specialty care for older adults. One broader positive impact has been on increasing access—primarily to primary care and pharmacies—although many companies have pulled back on their in-person retail clinics. Policymakers could consider requiring any entities in healthcare, including those considered to be nontraditional, to report all the same quality measures that traditional providers do. These measures are largely overseen nationally by the National Committee on Quality Assurance. States also mirror these quality and outcome reporting requirements with their state-based quality measurement systems, such as New York’s Quality Assurance Reporting Requirements.

What other roles should government play as it relates to the growth of nontraditional healthcare providers?

Traditional healthcare (e.g., hospitals, nursing homes, federally qualified health centers, etc.) is highly regulated. To bill for services, providers must enroll in programs to get a National Provider Identifier (NPI number) and be credentialed. In some cases, companies may do this themselves, while others have chosen to buy or partner with entities that are already enrolled providers.

In the case of Costco’s latest venture with SCAN to serve the 65+ year-old Medicare population, the service being offered is itself different because it is a Medicare insurance product. These products have regulations governing participation, marketing practices, and compliance. Should any of the aforementioned companies decide to serve the Medicaid population, which is primarily lower-income individuals or people with disabilities, the regulatory requirements may vary by state because this program is jointly administered by the federal and state government.

Conclusion

As this blog reflects, a growing number of companies that are not traditional healthcare providers have been entering the healthcare marketplace. As discussed, there are new ways companies are entering this space (from retail healthcare to pharmacy to insurance for aging services), and there are potential pros and cons to this development. To ensure that the entry of these companies into healthcare is a more positive development, policymakers may want to consider more evenly applying regulatory requirements and oversight across the marketplace. They may also want to more closely monitor impacts on access to services, costs, and outcomes for consumers to the same degree as is done for traditional providers. In the meantime, it will be interesting to watch how and to what extent these larger retail companies evolve in the healthcare marketplace.

Campaign 2026 and Health Industry Issues: What’s Next?

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Campaign 2026 and Health Industry Issues: What’s Next?

Election day is finally here though final results may not be known this week due to election protocols and likely challenges in states. Per polls and commentary across the ideological spectrum, Campaign ‘26 is unprecedented for the money spent ($11.9 billion per Open Secrets), the acrimony between candidates and the blatant disinformation featured in campaigns on both sides.

Like most, I am happy it’s behind us. I value civil debate. I don’t think complex issues are explained in soundbites.  I value data that’s not cherry-picked and polls that are honest. I hate campaigns that justify any means necessary to win. I respect candidates willing to debate. And I worry that statesmanship in local, state and federal policy-setting has been sacrificed to political brinksmanship.

But while uncertainty may dog the outcome this week and potentially in the weeks ahead, there’s certainty for healthcare in the lame duck session of Congress starting next week and in states:

  • State ballot measures and fed mandates will get immediate attention by Governors and state legislatures: implementation of Medicaid work requirements in every state, abortion rights (ID, NV, VA) and referenda that address healthcare funding, school health, vaccines and more in others. CA, CO, MA, MO, NM, NC, RI, SD, WA, and WI). And governors in every Blue State and a few Red States will revisit recission of Medicaid cuts in the Big Beautiful Bill (HR1) slated to start January 1, 2027.
  • Trade associations will update their 2027 advocacy agendas and health committee profiles to prepare for the 120th Congress starting in 60 days.
  • Lobbyists and consultants will be active with their clients–trade groups, special interests, single issue advocacy 501C3s, municipalities, corporate interests et al—around (1) potential low-hanging legislative wins before the 119th Congress adjourns, (2) potential regulatory shifts in 2027 and (3) extension/expansion of their contracts with clients.
  • And the Executive Branch will sequester its key leaders across its agencies (HHS, CMS, FDA, FTC, USDA, DOJ, Commerce, et al) to protect its priorities via prepare Executive Orders, Administrative Actions, Court filings, budget appropriations and key appointments. Price transparency, competition, lower drug costs, less consolidation and stepped-up fraud, waste and abuse efforts will be its emphasis.

Looking to 2027, healthcare will be lightening rod in legislative circles and posturing by White House hopefuls in Campaign 2028. Importantly, two overarching realities will frame politics and policy discussions:

Healthcare is a major contributor to household affordability concerns. Healthcare is one of four major sources of affordability pressure on households along with housing, fuel and groceries. But unlike the other three, healthcare costs are considered unmanageable to voters because they’re often unpredictable, inexplicable and rarely transparent. It’s an issue that garners bipartisan repudiation in politics and unflattering attention to the industry’s opaque business practices.

Healthcare is seen as big business, not public service. The persona of rural hospitals, primary, behavioral and public health, nursing and home care and others is typified by many that struggle and the few that prosper. Stoked by disgruntled employees, physicians and large self-insured employers, bipartisan criticism of consolidation, vertical integration, private equity ownership, board independence, executive compensation, non-profit tax exemptions and more. Corporatization in every sector and regardless of ownership (non-profit, for-profit, or public) will be blamed and capital deployment in healthcare will reflect caution.

Healthcare will be prominent in the election post-mortem this week. Industry leaders face headwinds in the public square with voters and legislators in local, state and federal chambers. Some operate on the assumption that voters will defend the U.S. system against major changes believing it the world’s best. It’s been a safe bet historically, but the future may not be a repeat of the past.

How Democrats’ Big Win Could Reshape Health Care

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https://mailchi.mp/e7ac0bb13b2c/how-democrats-big-win-could-reshape-health-care?e=ad91541e82

Some people are calling the 2026 midterms a “blue tsunami” or even a “Democratic wildfire.”

Whatever you call it, Democrats will have big majorities in the House and the Senate for the end of President Trump’s second term, which could have major implications for health policy over the next two years and beyond.

Democrats have their sights set high. They’ve pledged to repeal Republicans’ health care cuts in their first 100 hours in power — starting with restoring enhanced premium subsidies for people who buy insurance through Obamacare marketplaces and reversing nearly $1 trillion in Medicaid cuts and coverage restrictions set to take effect in January.

Achieving any of that will still require support from at least a few Republicans in Congress and President Trump. But even if they fail to roll back Republican cuts, Democrats will have far more power to influence the country’s health policy conversation, says Katie Keith, director of the Center for Health Policy and Law at Georgetown Law and a contributing editor at Health Affairs.

We spoke with Keith on Wednesday morning about Democrats’ health care affordability agenda in Washington and what the party’s strong showing at the state level could mean on issues such as abortion rights and Medicaid.

Here are some of the key takeaways from our conversation:

  • Republicans and Democrats could become “strange bedfellows” on certain health care issues — like lowering prescription drug costs or even delaying some changes to Medicaid. The size of Democrats’ margins in Congress could allow them to add pieces of their health care agenda to must-pass legislation. The question, Keith says, is, “What is the trade that could bring President Donald Trump along to agree to that?”
  • Democrats have a chance to take control of the health care agenda ahead of the 2028 presidential election — communicating to voters that “Congress hears the concerns of the American people and is doing something about it,” Keith says. She compared it to Republicans’ repeated attempts to repeal the Affordable Care Act after routing Democrats in 2010. Others have drawn comparisons to Democrats’ 2006 midterm victory, which put health care center stage in 2008 and led to the creation of Obamacare.
  • Beyond legislation, Democrats in Congress are likely to go big on oversight and transparency, Keith says, to scrutinize the actions of the Trump administration and the private health sector. For example, Congress could subpoena drug manufacturers for copies of the deals they’ve made with the White House to, among other things, charge state Medicaid programs less than they charge in other countries around the world. The specifics of these deals, which have been cut with more than two dozen drugmakers, have been kept private.
  • Democratic gains in state elections could have big implications for Medicaid. Democrats gained full control in at least five states and won a majority of races for governor and attorneys general. Keith says this red-to-blue shift could mean “a completely different approach to implementing Medicaid work requirements, eligibility and redeterminations.” New blue leadership in Wisconsin, Texas and Georgia could even, theoretically, open the door to Medicaid expansion. “The fact that you could even say maybe it’s something to look at was not something I was expecting to say the morning after [the election],” Keith says.

I hope you’ll listen to our entire episode or read the transcript.

Midterm Elections Won’t Fix Hospitals’ Financial Challenges in 2027

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https://www.healthleadersmedia.com/ceo/midterm-elections-wont-fix-hospitals-financial-challenges-2027

Democratic healthcare priorities could ease some financial pressures facing providers, but congressional constraints will limit the changes lawmakers can make.

KEY TAKEAWAYS

Hospitals will continue to face financial headwinds from federal healthcare policy changes already enacted.

Medicaid and ACA Marketplace coverage remain central to Democrats’ efforts to address the financial impact on providers.

Congressional oversight and budget negotiations give lawmakers avenues to influence policy implementation even when a full reversal is out of reach.

The midterm elections will give Democrats greater influence over federal healthcare policy, creating an opening to address some of the financial pressures facing hospitals.

Party leaders have signaled interest in restoring funding for programs affected by the One Big Beautiful Bill Act (OBBBA), particularly Medicaid and the Affordable Care Act (ACA) Marketplace. Those priorities could offer some relief to hospitals as they prepare for 2027.

However, Democratic control of Congress does not guarantee a reversal of the healthcare provisions already enacted, leaving hospitals and health systems to contend with the financial consequences of those policies.

“While the election has changed who controls Congress, it doesn’t change the financial challenges hospitals will face in 2027,” Chris Van Gorder, president and CEO of Scripps Health, said in a statement. “Democrats won’t have the votes to simply reverse major federal health care cuts over a presidential veto. But Congress is far from powerless. Lawmakers can use their oversight and budget authority to press for changes in how those cuts are carried out, protect critical health care funding where possible and work across party lines to ease the growing financial pressures on hospitals and impact on patients.”

Democrats could offer a lifeline

Two areas of potential focus are Medicaid and ACA Marketplace coverage. Democrats have indicated they want to address cuts to these programs, which could have direct consequences for hospitals’ finances.

Reversing or mitigating Medicaid reductions could limit the number of people who lose coverage and help hospitals avoid further growth in uncompensated care. For health systems serving large Medicaid populations, changes to eligibility and federal funding can affect both patient coverage and the reimbursement hospitals receive for care.

Restoring enhanced ACA premium tax credits is another potential priority. The expiration of those subsidies could make Marketplace coverage more expensive for many enrollees, potentially leading some to drop their plans. A congressional effort to restore the subsidies could help preserve enrollment and reduce the number of patients who arrive at hospitals without insurance.

The financial effects will depend on the scope of any legislative changes and how quickly they take effect. Even if Democrats pursue these priorities, hospitals should not assume that coverage losses or funding reductions already set in motion will be fully reversed.

Congressional authority has limits

Democratic control of Congress gives the party greater power to mold the legislative agenda and scrutinize the administration’s implementation of federal healthcare policy. Reversing major provisions of OBBBA, however, would face significant obstacles.

Even with majorities in both chambers, Democrats would need enough votes to overcome a presidential veto. The party’s Senate majority falls short of the two-thirds threshold required, making a wholesale reversal of the law unlikely while President Trump remains in office.

Congressional Democrats could still use committee oversight and budget negotiations to influence how federal healthcare policies are carried out. They could press the administration on implementation decisions and pursue targeted legislation where bipartisan support exists.

For hospital leaders, the election changes the policy environment, but the financial outlook for 2027 remains difficult. Medicaid funding reductions and changes to Marketplace coverage will continue to influence hospitals’ financial planning as the new Congress considers its priorities. Any relief will depend on what lawmakers can pass and what the administration allows to take effect.

Risant Health’s Integris Deal Tests its Value-Based Care Strategy

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https://www.healthleadersmedia.com/ceo/risant-healths-integris-deal-tests-its-value-based-care-strategy

The acquisition allows Risant to keep growing while giving Oklahoma’s largest nonprofit health system access to technology and investment resources.

KEY TAKEAWAYS

Integris Health would become the third health system to join Risant Health, following Geisinger and Cone Health.

Risant has committed billions of dollars to capital investments and implementation support at its existing health systems.

Risant reports gains in operating margin at Geisinger and reduced clinician documentation time at Cone Health as it seeks to extend its value-based care model.

Risant Health’s planned acquisition of Integris Health will expand its network of community-based health systems and test its ability to spread value-based care practices across differing organizations.

The two systems have signed a definitive agreement, giving Integris access to technology and other resources through Risant, a nonprofit created by Kaiser Permanente to help health systems transition toward value-based care.

For Integris CEO Timothy Pehrson, the arrangement could accelerate investments that would be difficult to achieve independently.

“These are investments and capabilities we couldn’t make or build on our own, not at this scale and not this fast,” Pehrson said in the announcement.

Oklahoma City-based Integris operates 20 hospitals and has the state’s largest physician network. The acquisition would make it the third health system to join Risant, following Geisinger in Pennsylvania and Cone Health in North Carolina.

Risant’s strategy depends on spreading technology and clinical practices across its member organizations while allowing them to retain their local identities. Kaiser Permanente CEO Greg Adams described the goal as moving “from siloed, episodic care to a value-based care approach with an increased focus on evidence-based care that achieves healthier outcomes for more people.”

The acquisition raises questions about how Risant will translate its strategy into results across distinct health systems. Integris reported $3.3 billion in operating revenue and a $22.3 million operating loss in fiscal 2025, highlighting the importance of investments that can support its long-term performance.

Risant points to early results at its existing health systems as evidence of progress. Geisinger has realized benefits equivalent to nearly a 1% improvement in operating margin since joining Risant, according to the organization. At Cone Health, Risant reports that ambient clinical documentation technology has reduced the time clinicians spend on notes per patient encounter by almost 14%.

Those examples illustrate the potential of shared resources to affect clinical workflows and financial performance. The results at Geisinger and Cone Health, however, do not establish how quickly Integris could achieve similar gains.

Risant’s operating revenue reached $6.7 billion in the first half of 2026, up 9.9% from $6.1 billion in the same period a year earlier. Its financial results do not separately disclose operating income for Risant, making it difficult to assess the overall financial performance of its model.

Risant has made substantial capital commitments to its existing health systems. It has pledged to make at least $2 billion available to Geisinger through 2028 and committed at least $1 billion in capital over five years to Cone Health, along with up to $400 million for integration and implementation of its value-based care platform and up to $300 million for growth over the following decade.

For Integris, the immediate appeal is access to investment capacity and capabilities. The longer-term test will be whether those resources help Integris advance value-based care while strengthening its operations.

The agreement remains subject to regulatory approval.

The Cost-Control Mirage: What State Spending Caps Mean for CFOs

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https://www.healthleadersmedia.com/cfo/cost-control-mirage-what-state-spending-caps-mean-cfos

State health spending growth benchmarks were designed to rein in rising healthcare costs. But a new JAMA Network Open study finds little evidence they have lowered hospital revenue, prices or insurance premiums.

KEY TAKEAWAYS

State benchmarks were not associated with statistically significant reductions in hospital revenue or prices.

Enforcement mechanisms and additional cost-control policies could change the financial equation over time.

Operational efficiency, service-line economics and scenario planning remain essential.

Ambition meets limited results

CFOs have spent years preparing for a policy environment that’s focused on affordability, and state spending growth benchmarks are one response: They set targets for how quickly healthcare spending should grow, with the aim of slowing cost increases without necessarily cutting access to care.

But are these benchmarks actually working?

In a recent study published in JAMA Network Open, researchers from RAND Corporation examined whether state spending growth benchmarks were associated with lower hospital revenue, hospital prices or health insurance premiums. The analysis covered 4,813 hospitals and 3,108 counties, comparing eight states that implemented benchmarks with areas in states without them. The researchers used a case-control design and difference-in-differences models, with up to seven years of postimplementation data for relevant outcomes.

The findings challenge the assumption that setting a spending target will, by itself, produce meaningful cost containment.

Across the study, benchmarks were not associated with statistically significant changes in inpatient hospital revenue per discharge, outpatient revenue per discharge equivalent, standardized inpatient or outpatient prices, or individual- and small-group-market premiums. The estimated changes in these measures were small relative to their uncertainty, and premium findings varied over time rather than demonstrating sustained reductions. Rhode Island was an exception for outpatient prices, where researchers identified a statistically significant reduction.

The central finding: Establishing a benchmark is not the same as changing the financial incentives that drive healthcare spending. The researchers point to limited enforcement and the absence of complementary policies as possible explanations. Of the eight states analyzed, only Vermont, Oregon and California had enforcement mechanisms, and California’s program was too new to provide much evidence on hospital outcomes.

Of course these results do not prove that benchmarks can never work. Differences in implementation, limited follow-up for some states and other policy changes complicate the picture. But still, the study offers little support for expecting benchmarks alone to generate near-term savings.

The CFO To Do

Treat spending benchmarks as a regulatory constraint to monitor, not a savings plan to underwrite.

First, build state-specific scenarios into multiyear financial planning. Model what happens if revenue and commercial prices continue along current trajectories, if regulators intensify scrutiny, or if future enforcement imposes corrective plans or penalties. Avoid assuming that affordability initiatives will automatically reduce market prices—or that existing pricing power will remain untouched.

Second, focus on controllable economics. Strengthen service-line contribution-margin analysis, evaluate labor and supply costs, improve capacity utilization and scrutinize low-margin contracts. If policymakers eventually impose tighter limits, organizations with a clear understanding of their underlying cost structures will be better positioned to respond without indiscriminate cuts.

Third, elevate regulatory intelligence as a finance function. CFOs should work with government affairs, managed-care contracting, and strategy teams to track benchmark performance, enforcement rules and emerging state-level reforms. Market-entry decisions, capital investments and acquisition models should reflect the possibility that today’s voluntary targets become tomorrow’s enforceable requirements.

Finally, distinguish revenue protection from genuine cost transformation. Don’t only think about preserving prices, but build a financially resilient delivery system that can sustain quality and access under tighter affordability expectations.

Policy targets alone have not demonstrated reliable cost containment, so CFOs should prepare for regulation to evolve while making their organizations less dependent on continued price growth to protect margins.