Hospitals begin to grapple with tariff fallout

Posted on by • Posted in 2026 Mid Term Election Issues, 2028 Election Issues, Health System, Hospital, Hospital Industry, Operating Expenses, Rural Health, Rural Health Clinics (RHC), Rural Hospital, Shortages, Supply Chain, Supply Costs, Supply Shock, Tariff Fallout, Tariffs • Leave a comment
https://www.axios.com/2025/05/01/hospitals-struggle-tariff-impacts?utm_source=newsletter&utm_medium=email&utm_campaign=newsletter_axiosvitals&stream=top

Hospitals across the country are starting to reckon with the effects President Trump’s tariffs are having on medical supplies like syringes and PPE, and in some cases freezing spending and making other contingencies.

Why it matters: 

A global trade war could bring a return to pandemic disruptions if imported goods that health systems purchase in high volumes from China can’t be replenished. And there’s still the prospect of Trump’s tariffs on pharmaceuticals.

  • Ultimately, experts warn, supply disruptions and price hikes could drive up the price of patient care.

“Tariffs have the potential to add a layer of complication to [hospitals’] ability to get all of those medical goods, the drugs and the devices that they need to deliver care,” said Akin Demehin, the American Hospital Association’s vice president of quality and patient safety policy.

State of play: 

So far, there have been no widespread shortages or price spikes.

  • What most concerns the providers is a reliance on medical gear from China. Enteral syringes used to deliver drugs or nutrition through feeding tubes have no alternative sources and are subject to a 245% tariff, according to group purchasing organization Premier.
  • “With the consumables — the gowns, the gloves, masks … hospitals go through an enormous volume of those every year. Certainly there is some risk there,” said Kyle MacKinnon, senior director of operational excellence at Premier.

The pandemic spawned more domestic manufacturing of medical gear — and an anticipated reduction in dependence on overseas suppliers. But many of the startups have since disappeared, the New York Times reported, leaving the health system once again vulnerable to supply shocks amid threats like measles outbreaks and avian flu.

Between the lines: 

The situation could be further complicated by tariffs on pharmaceuticals that could weigh particularly hard on imported generics.

  • Cancer and cardiovascular medications, as well as immunosuppressives and antibiotics, are of great concern to hospitals, per a letter the American Hospital Association sent earlier this year to Trump. MD Anderson Cancer Center in Houston instituted a hiring freeze due to uncertainty, in part, from the tariffs’ impact on drug prices.
  • Medical devices are also facing a high level of exposure with roughly 70% of U.S. marketed medical devices manufactured exclusively outside the U.S., Premier wrote.
  • The American Hospital Association on Wednesday pointed to data that found 82% of health care experts expect tariff-related expenses to raise hospital costs by at least 15% over the next six months.
  • 94% of health care administrators expected to put off equipment upgrades, in response.

Reality check: 

Many hospitals may still be insulated from the worst effects because of long-term purchasing contracts.

  • Universal Health Services CFO Steve Filton said during an earnings call that three-quarters of the company’s supply chain had fixed contracted prices, Fierce Healthcare reported.
  • The company had begun to see “fees or stipends” on invoices with vendors with fixed contracted prices but had been ignoring them. “At the moment, it feels like there’s not a great deal of pressure,” he said.
  • But a dramatic reduction in goods from a major trading partner will eventually hit multiple players needing to replenish inventories, experts predict.

What to watch: 

Hospitals are among trade groups lobbying for tariff exemptions for critical medical supplies, including drugs. One question is whether pharmaceutical manufacturers can limit their exposure by “reshoring” more intellectual property in order to pay more U.S. taxes, Leerink Partners wrote in an investor note on Wednesday.

  • As supplies that have been stockpiled by hospitals begin to run low or as contracted prices expire, the true costs will begin to be felt.
  • “We especially worry about the potential impacts to vulnerable and to rural health care providers who already are operating on thin margins, and for whom changes in the cost of those kinds of goods could have a disproportionate impact,” Demehin said.

Federal judge extends block on public health cuts 

Posted on by • Posted in Dept of Health and Human Services (HHS), District Court, Essential Health Services, Essential Service, Federal Judge, Grant Funding, Lawsuit, Pandemic Funding • Leave a comment

https://nxslink.thehill.com/view/6230d94bc22ca34bdd8447c8nre7h.e6c/dab7c0dc

Judge Mary McElroy of the U.S. District Court for the District of Rhode Island ruled Friday to extend a temporary restraining order she issued last month that barred the Trump administration from wiping out pandemic-era funding to Washington D.C., and 23 Democratic-led states.  

States behind the lawsuit argued that HHS acted unlawfully by abruptly ending the grant funding without any analysis of the move’s benefits or consequences.  

HHS said that the $11.4 billion worth of grant funding was mainly used to pay for testing, vaccines and hiring community health workers to combat COVID-19. And the agency argues since the pandemic is over, state and local health agencies no longer need that money.  

Although the grants were initially authorized by COVID-19 relief legislation, the funds were allowed to be spent on other efforts like combating the ongoing measles outbreak in Texas. State and local health departments said the funds were already being used for such efforts.  

McElroy ruled that the agency does not have the legal right to unilaterally withhold the grant funding that has already been allocated to localities, especially in states where that funding has been used to build essential health programs.  

She wrote in her ruling that the funding cuts would “result in devastating consequences to their local jurisdictions … would constrain the States’ infectious disease research, thwart treatment efforts to those struggling with mental health and addiction, and impact the availability of vaccines to children, the elderly and those living in rural areas.” 

Moodys Downgrades US Credit Rating

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https://finance.yahoo.com/news/moodys-downgrades-us-aa1-rating-204908886.html

Moody’s on Friday downgraded its credit rating of the United States by a notch to “Aa1” from “Aaa”, citing rising debt and interest “that are significantly higher than similarly rated sovereigns.”

The rating agency had been the last among major ratings agencies to keep a top, triple-A rating for U.S. sovereign debt, though it had lowered its outlook in late 2023 due to wider fiscal deficit and higher interest payments.

“Successive US administrations and Congress have failed to agree on measures to reverse the trend of large annual fiscal deficits and growing interest costs,” Moody’s said on Friday, as it changed its outlook on the U.S. to “stable” from “negative.”

Since his return to the White House on January 20, President Donald Trump has pledged to balance the U.S. budget while his Treasury Secretary, Scott Bessent, has repeatedly said the current administration aims to lower U.S. government funding costs.

The administration’s mix of revenue-generating tariffs and spending cuts through Elon Musk’s Department of Government Efficiency have highlighted a keen awareness of the risks posed by mounting government debt, which, if unchecked, could trigger a bond market rout and hinder the administration’s ability to pursue its agenda.

The downgrade comes as Trump’s sweeping tax bill failed to clear a key procedural hurdle on Friday, as hardline Republicans demanding deeper spending cuts blocked the measure in a rare political setback for the Republican president in Congress.

“We do not believe that material multi-year reductions in mandatory spending and deficits will result from current fiscal proposals under consideration,” Moody’s said, while forecasting federal debt burden to rise to about 134% of GDP by 2035, compared with 98% in 2024.

The cut follows a downgrade by rival Fitch, which in August 2023 also cut the U.S. sovereign rating by one notch, citing expected fiscal deterioration and repeated down-to-the-wire debt ceiling negotiations that threaten the government’s ability to pay its bills.

The Costs of Insufficient Insurance Coverage

Posted on by • Posted in Bankruptcy, Health Insurance Coverage Adequacy, Health Policy, High Deductible Health Plans, Medical Debt, Medical Debt Financing, Out of Pocket Expenses, Underinsured, Uninsured • Leave a comment

https://mailchi.mp/rooseveltinstitute/roosevelt-rundown-what-could-be-the-most-important-tax-case-of-the-century-9770494?e=c0285a8bc9

Whether they owe providers directly or carry the financial burden in long-term loans and credit card bills, an estimated 41 percent of Americans hold some form of medical debt.

“Medical debt is not inevitable. Rather, it is the product of decades of dysfunctional health-care policy, a market-oriented insurance system, and a patchwork of safety net programs with notable gaps,” writes Stephen Nuñez, Roosevelt’s director of stratification economics, in a new brief. 

Health-care policy permeates every stage of American life—whether it’s students applying for Medicaid, workers struggling to find insurance coverage between jobs, or the elderly signing up for Medicare—and the scale of the resulting debt crisis is massive. But these problems are also solvable.

“Biden administration efforts over the past several years have shown that our health-care system can be strengthened to extend insurance to millions more working-class people and help millions more upgrade their insurance coverage with better plans, at incrementally small costs,” Nuñez explains. “But the Trump administration is now poised not only to undo these steps but to enact savage cuts to federal health-care spending that will supercharge the medical debt crisis and together leave millions of people, disproportionately Black and Hispanic, uninsured and underinsured.”

Ultimately, a crisis created by policy choices must also be solved by policy choices:

  • In 2025, Congress should protect Medicaid and the American Rescue Plan tax credits.
  • In upcoming state legislative sessions, the 10 states withholding federal Medicaid funds from their residents should expand coverage as stipulated in the Affordable Care Act.
  • In the coming years, the federal government should implement a comprehensive plan to close the gaps in the American health insurance system.


Read the full brief: “The US Medical Debt Crisis: Catastrophic Costs of Insufficient Health Coverage”

Medicaid provider taxes throw off sparks

Posted on by • Posted in 2026 Mid Term Election Issues, 2028 Election Issues, Medicaid, Medicaid Cuts, Medicaid Provider Taxes • Leave a comment
https://www.axios.com/newsletters/axios-vitals-f38c1060-319b-11f0-b1d7-7f66ec2f46a7.html?utm_source=newsletter&utm_medium=email&utm_campaign=newsletter_axiosvitals&stream=top

Congress and the Trump administration are trying to limit how much states can tax hospitals, nursing homes and other providers to help cover the cost of their Medicaid programs.

  • That could tie governors’ and legislatures’ hands at a critical moment.

Why it matters: 

The taxes have been a friction point for decades, but they’re deeply ingrained in the safety net program. Every state except Alaska levies at least one type of provider tax to help cover the non-federal part of Medicaid spending.

How it works: 

States typically cover about 30% of Medicaid costs annually and use general funds along with taxes on hospitals, nursing homes and even managed care organizations. The more they collect, the more they receive in federal matching funds.

  • That’s key in the current debate over federal Medicaid spending, with projections showing that limiting provider taxes could reduce federal outlays by hundreds of billions over a decade.

The stakes are particularly high for red states. Mississippi, South Carolina, Utah and Alabama would all lose more than one-third of their federal Medicaid funding without the ability to levy provider taxes.

State of play: 

The House Energy and Commerce Committee on Wednesday advanced a sweeping overhaul of Medicaid that would prevent states from establishing new provider taxes and freeze those taxes already on the books at their current rates.

  • Democrats unsuccessfully fought the move during a marathon 26-hour markup. But the committee ultimately advanced the restrictions and the rest of the legislation along party lines.
  • The Congressional Budget Office estimated the restrictions would save about $87 billion through 2034.

Meanwhile, the Trump administration this week proposed additional restrictions on how states can structure their provider taxes. Seven states currently have waivers for provider taxes that would have to be restructured under the new policy, mostly for taxes on insurers.

  • That proposal alone, which mirrors another provision in the House reconciliation bill, would reduce federal Medicaid spending by $33 billion over five years, CMS estimates.
  • “Every state is going to have a really different situation in front of them,” said Morgan Craven, a director in ATI Advisory’s state program and policy practice.
  • “Because it’s been such a part of the fabric of how so many states finance and deliver care, undoing that is going to be really complex, and states will need time and will need a really strategic lens for how they can sustainably undo these policies,” she added.

Zoom out: 

Hospitals and patient advocates are concerned about the effects of such a foundational change in Medicaid financing.

  • “By freezing the taxes, the proposal ignores circumstances that drive increased health care costs including inflation, increased labor and drug costs, increased utilization and increased population demand for service,” the American Hospital Association wrote in a statement to the Energy and Commerce Committee this week.

Yes, but: Hospital stocks actually gained, on the premise that the House’s Medicaid changes could have been more onerous, per the Wall Street Journal.

  • And the CMS proposal suggested that the Trump administration won’t further try to dock provider taxes outside of congressional efforts — good news for hospital investors, Capstone senior vice president Wylie Butler wrote in an analyst note.

What to watch: 

There are some signs that Senate Republicans aren’t as interested in cracking down on provider taxes as their counterparts in the House.

  • “It’s not that I think that provider taxes are good; it’s that the Medicaid reimbursements have been insufficient,” Sen. Susan Collins (R-Maine) told reporters this week.
  • “Our rural hospitals in my state and across the country are really teetering.”

Millions could lose coverage under potential GOP Medicaid policies: CBO

Posted on by • Posted in Congressional Budget Office (CBO), Health Insurance Coverage Adequacy, Health Policy, Medicaid, Medicaid Cuts, Medicaid Disenrollment, Medicaid Eligibility, Preexisting Conditions, Terminated Health Insurance, Underinsured, Uninsured • Leave a comment

https://www.healthcaredive.com/news/medicaid-coverage-losses-gop-policies-cbo/747615/

Dive Brief:

  • Millions of people could lose coverage under potential policy changes to Medicaid under consideration by Republicans in Congress, according to a letter sent to lawmakers this week from the Congressional Budget Office. 
  • One option, reducing the federal government’s share of costs for enrollees covered under Medicaid expansion, would reduce the federal deficit by $710 billion over the next decade. But in 2034, 5.5 million people would be removed from the safety-net program, with 2.4 million of these enrollees becoming uninsured, according to the CBO.
  • Another potential policy, placing a per-enrollee cap on federal spending, would remove 5.8 million people from Medicaid. Nearly 3 million of those people would lose coverage entirely. The policy would reduce the deficit by $682 billion, the analysis found.

Dive Insight: 

Debates surrounding potential cuts to Medicaid — and their implications for patients and providers — have been heating up in Congress for weeks. 

Last month, lawmakers approved a budget resolution that called for the House Energy and Commerce Committee, which oversees Medicare and Medicaid, to find $880 billion in savings. That budget goal is likely impossible to hit without targeting major healthcare programs under the committee’s purview, according to an earlier analysis published in March by the CBO.

The committee is expected to meet next week to mark up its portion of the reconciliation package and hash out legislation.

However, cutting Medicaid is a politically contentious move for Republican lawmakers. Some legislators have pushed back on potential cuts, and others have argued they’ll preserve Medicaid for the most vulnerable by targeting fraud, waste and abuse in the safety-net insurance program. 

But Rep. Frank Pallone Jr., D-N.J., and Sen. Ron Wyden, D-Ore., who requested the latest CBO analysis, said the policies will ultimately limit benefits and result in coverage losses.

“This analysis from the non-partisan, independent CBO is straightforward: the Republican plan for health care means benefit cuts and terminated health insurance for millions of Americans who count on Medicaid,” Wyden said in a statement. “Republicans continue to use smoke and mirrors to try to trick Americans into thinking they aren’t going to hurt anybody when they proceed with this reckless plan, but fighting reality is an uphill battle.”

The letter from the CBO analyzes five potential policy options for Medicaid: setting the federal matching rate for the expansion population at the same rate as other enrollees; limiting state taxes on providers; setting federal caps on spending for the entire Medicaid population or just the expansion group; and repealing two regulations linked to eligibility and enrollment. 

Most of the options reduce the funds available to states, according to the CBO. The agency expects states will replace about half of the reduced support with their own resources, and then reduce spending by cutting provider payment rates, reducing optional benefits and cutting enrollment. 

For example, if Congress decides to limit provider taxes, where states levy taxes that finance a portion of their Medicaid spending, that would result in 8.6 million fewer people enrolled in Medicaid in 2034, including nearly 4 million becoming uninsured. The move would ultimately lessen the federal deficit by $668 billion, as the government would offer reimbursement for lower state spending, the analysis found.

Another option, placing a cap on federal spending for the expansion population, would save $225 billion — but 3.3 million people would lose Medicaid coverage. Repealing regulations that aim to reduce barriers to enrollment and simplify the renewal process would reduce the federal deficit by $162 billion over the next decade, but 2.3 million fewer people would be enrolled in Medicaid, the CBO found.

Democrats urge Republicans to focus on Medicare Advantage upcoding instead of Medicaid cuts

Posted on by • Posted in Center for Medicare and Medicaid Services (CMS), Fraud and Abuse, Health Insurance Coverage Adequacy, Health Policy, Medicaid, Medicare Advantage, Medicare Advantage Overpayments, Medicare Advantage Upcoding, MedPAC, Out of Pocket Expenses, Preexisting Conditions, Underinsured, Uninsured • Leave a comment

https://www.healthcaredive.com/news/democrats-urge-republicans-focus-medicare-advantage-upcoding/747627/

Dive Brief:

  • Democrat lawmakers are urging Republicans debating cuts to Medicaid to focus instead on fraud, waste and abuse in another federal healthcare program: Medicare Advantage.
  • Curbing upcoding in the privatized Medicare plans, wherein insurers exaggerate the health needs of their members to inflate government reimbursement, is a better avenue for saving federal dollars than restricting benefits or cutting eligibility in Medicaid, the 36 Democrats wrote in a letter to GOP leadership on Wednesday.
  • The letter was addressed to Senate Majority Leader John Thune, R-S.D, and House Speaker Mike Johnson, R-La., and comes as Republicans debate different policies to reach savings targets.

Dive Insight:

Republicans in Congress are aiming to extend tax cuts from President Donald Trump’s first term. Their budget directs the House Energy and Commerce Committee to cut $880 billion in spending — a goal that’s impossible to reach without touching Medicaid, which (along with its sister program for children) provides safety-net insurance to some 80 million Americans.

Now, Democrats in both chambers are urging Republicans to redirect their attention from Medicaid to MA, privatized plans for Medicare seniors that can provide additional benefits but also restrict care in a way traditional Medicare is not allowed to do. Still, the plans have steadily grown in popularity and now cover more than half of the 68 million Americans in Medicare.

“Your directive to cut federal health care spending should come from reducing waste, fraud, and abuse like upcoding by for-profit insurance companies, not by cutting health care benefits for American families who rely on Medicaid to make ends meet,” the Democrats’ letter reads.

The letter cites a Wall Street Journal investigation into upcoding published last year that found MA insurers frequently added diagnoses for their members for which their members never received treatment or that went against doctors’ observations. The practice drove a total of $50 billion in additional payments to the private insurers over three years, according to the investigation.

Similarly, influential congressional advisory group MedPAC found CMS paid MA insurers $84 billion more in 2024 than the government would have if those members had been in traditional Medicare. Upcoding was responsible for almost half of those overpayments.

Traditionally, Republicans broadly support MA, which was created on the premise that private insurers could help the government manage Medicare more economically. However, there’s been rising bipartisan support for reforming the program in light of growing evidence of practices like upcoding that inflate government reimbursement to plans without helping enrollees.

In his confirmation hearing, Dr. Mehmet Oz, the surgeon and television personality tapped by Trump as the administrator of the CMS, agreed that tackling fraud, waste and abuse in MA was a “rational” way of lowering federal healthcare spending.

“We’re actually apparently paying more for Medicare Advantage than we’re paying for regular Medicare. So it’s upside down,” Oz said in front of the Senate Finance Committee in March.

Republicans in the House are currently trying to figure out how to achieve desired savings without slashing Medicaid, given the program’s political popularity, including among Republican voters.

GOP leadership recently appeared to rule out two Medicaid policies that would cause significant upheaval for enrollees in the program: lowering the portion of Medicaid costs borne by the federal government for the Medicaid expansion population, and per-capita caps on benefits for beneficiaries in expansion states.

More moderate policies Republicans are considering include requirements tying eligibility to work, education or volunteering hours or curbing financing arrangements that allow states to draw more funds from the federal government. Policies on the table would still result in millions of Americans losing Medicaid coverage.

“Moving forward with this dangerous plan to rip health care away from low- and middle-income Americans would be a man-made disaster for the health of the nation and the economy,” the Democrats’ letter reads. “We urge you instead to listen to Administrator Oz and tackle real fraud, waste, and abuse by private, for-profit health insurers in MA.”

House E&C is expected to hold its reconciliation markup next week.

The Value-based Care Agenda in Trump 2.0 Healthcare

Posted on by • Posted in 2028 Election Issues, Accountable Care Organization (ACO), Alternative Payment Model, Center for Medicare and Medicaid Services (CMS), Center for Medicare and Medicaid Innovation (CMMI), Fee for Service Reimbursement, Medicare, Medicare Advantage, Pay for Performance, Physician Burnout, Physician Incentives, Physician Leadership, Physician Practice Management, Risk-Based Compensation, Risk-Based Contracting, Value Based Care Model, Value-Based Care Functions, Value-Based Contracting, Value-Based Healthcare • Leave a comment
The Value-based Care Agenda in Trump 2.0 Healthcare

This week, the House Energy and Commerce and Ways and Means Committees begins work on the reconciliation bill they hope to complete by Memorial Day. Healthcare cuts are expected to figure prominently in the committee’s work.

And in San Diego, America’s Physician Groups (APG) will host its spring meeting “Kickstarting Accountable Care: Innovations for an Urgent Future” featuring Presidential historian Dorris Kearns Goodwin and new CMS Innovation Center Director Abe Sutton. Its focus will be the immediate future of value-based programs in Trump Healthcare 2.0, especially accountable care organizations (ACOs) and alternative payment models (APMs).

Central to both efforts is the administration’s mandate to reduce federal spending which it deems achievable, in part, by replacing fee for services with value-based payments to providers from the government’s Medicare and Medicaid programs. The CMS Center for Medicare and Medicaid Innovation (CMMI) is the government’s primary vehicle to test and implement alternative payment programs that reduce federal spending and improve the quality and effectiveness of services simultaneously.

Pledges to replace fee-for-service payments with value-based incentives are not new to Medicare.  Twenty-five years ago, they were called “pay for performance” programs and, in 2010, included in the Affordable Care as alternative payment models overseen by CMMI. But the effectiveness of APMs has been modest at best: of 50+ models attempted, only 6 proved effective in reducing Medicare spending while spending $5.4 billion on the programs. Few were adopted in Medicaid and only a handful by commercial payers and large self-insured employers. Critics argue the APMs were poorly structured, more costly to implement than potential shared savings payments and sometimes more focused on equity and DEI aims than actual savings.

The question is how the Mehmet Oz-Abe Sutten version of CMMI will approach its version of value-based care, given modest APM results historically and the administration’s focus on cost-cutting.

Context is key:

Recent efforts by the Trump Healthcare 2.0 team and its leadership appointments in CMS and CMMI point to a value-agenda will change significantly. Alternative payment models will be fewer and participation by provider groups will be mandated for several. Measures of quality and savings will be fewer, more easily measured and and standardized across more episodes of care. Financial risks and shared savings will be higher and regulatory compliance will be simplified in tandem with restructuring in HHS, CMS and CMMI to improve responsiveness and consistency across federal agencies and programs.

Sutton’s experience as the point for CMMI is significant. Like Adam Boehler, Brad Smith and other top Trump Healthcare 2.0 leaders, he brings prior experience in federal health agencies and operating insight from private equity-backed ventures (Honest Health, Privia, Evergreen Nephrology funded through Nashville-based Rubicon Founders). Sutton’s deals have focused on physician-driven risk-bearing arrangements with Medicare with funding from private investors.

The Trump Healthcare 2.0 team share a view that the healthcare system is unnecessarily expensive and wasteful, overly-regulated and under-performing. They see big hospitals and drug companies as complicit—more concerned about self-protection than consumer engagement and affordability. They see flawed incentives as a root cause, and believe previous efforts by CMS and CMMI veered inappropriately toward DEI and equity rather than reducing health costs. And they think physicians organized into risk bearing structures with shared incentives, point of care technologies and dependable data will reduce unnecessary utilization (spending) and improve care for patients (including access and affordability).

There’s will be a more aggressive approach to spending reduction and value-creation with Medicare as the focus: stronger alternative payment models and expansion of Medicare Advantage will book-end their collective efforts as Trump Healthcare 2.0 seeks cost-reduction in Medicare.

What’s ahead?

Trump Healthcare 2.0 value-based care is a take-no prisoners strategy in which private insurers in Medicare Advantage have a seat at their table alongside hospitals that sponsor ACOs and distribute the majority of shared savings to the practicing physicians. But the agenda will be set, and re-set by the administration and link-minded physician organizations like America’s Physician Groups and others that welcome financial risk-sharing with Medicare and beyond.

The results of the Trump Healthcare 2.0 value agenda will be unknown to voters in the November 2026 mid-term but apparent by the Presidential campaign in 2028. In the interim, surrogate measures for performance—like physician participation and projected savings–will be used to show progress and the administration will claim success. It will also spark criticism especially from providers who believe access to needed specialty care will be restricted, public and rural health advocates whose funding is threatened, teaching and clinical research organizations who facing DOGE cuts and regulatory uncertainty, patient’s right advocacy groups fearing lack of attention and private payers lacking scalable experience in Medicare Advantage and risk-based relationships with physicians.

Last week, the American Medical Association named Dr. John Whyte its next President replacing widely-respected 12-year CEO/EVP Jim Madara. When he assumes this office in July, he’ll inherit an association that has historically steered clear of major policy issues but the administration’s value-based care agenda will quickly require his attention.

Physicians including AMA members are restless: at last fall’s House of Delegates (HOD), members passed a resolution calling for constraints on not-for-profit hospital’ tax exemptions due to misleading community benefits reporting and more consistency in charity care reporting by all hospitals. The majority of practicing physicians are burned-out due to loss of clinical autonomy and income pressures—especially the 75% who are employees of hospitals and private-equity backed groups. And last week, the American College of Physicians went on record favoring “collective action” to remedy physician grievances. All impact the execution of the administration’s value-based agenda.

Arguably, the most important key to success for the Trump Healthcare 2.0 is its value agenda and physician support—especially the primary care physicians on whom the consumer engagement and appropriate utilization is based. It’s a tall order.

The Trump Healthcare 2.0 value agenda is focused on near-term spending reductions in Medicare. Savings in federal spending for Medicaid will come thru reconciliation efforts in Congress that will likely include work-requirements for enrollees, elimination of subsidies for low-income adults and drug formulary restrictions among others. And, at least for the time being, attention to those with private insurance will be on the back burner, though the administration favors insurance reforms adding flexible options for individuals and small groups.

The Trump Healthcare 2.0 value-agenda is disruptive, aggressive and opportunistic for physician organizations and their partners who embrace performance risk as a permanent replacement for fee for service healthcare. It’s a threat to those that don’t.

The Next 100 Days: What Healthcare Should Expect

Posted on by • Posted in Economy, Funding, Health Insurance Industry, Health System, Hospital, Hospital Industry, Investing, Investment, Medicare, Medicare Advantage, Public Health, Public Opinion, Public Perception, Supreme Court, Wall Street • Leave a comment
The Next 100 Days: What Healthcare Should Expect

The Trump administration is moving into its second 100 days facing conditions more problematic than its first 100. For healthcare, this period will define the industry’s near-term future as changes in three domains unfold:

  • The Economy: The economy is volatile and consumer confidence is waning. The impact of tariffs on U.S. prices remains an unknown and escalating tension between the Ukraine and Russia, Israel and Palestine, Pakistan and India are worrisome. Household debt is mounting as student loans, medical debt and housing costs imperil financial security for more than half of U.S. households. The 3 major stock indices remain in the red YTD, prospects for a recession are high and investors are increasingly cautious. Net impact on healthcare organizations and public programs: negative, especially those without strong balance sheets and access to affordable private capital.
  • The Courts: Recent opinions by the Supreme Court and District Courts suggest a willingness to challenge the administration’s Executive Orders on immigrant deportation and due process, threats and funding cuts aimed at law firms and universities considered “woke” and layoffs initiated by DOGE and more. Court challenges will slow the administration’s agenda and create uncertainty in workplaces. Net impact: negative. Uncertainty paralyses planning and operations in every public and private healthcare organization.
  • The Public Mood: The afterglow of the election has dissipated and the public’s mood has shifted from guarded optimism to anxiety and despair. The public’s uncertain about tariffs and worried about household expenses. Net impact: negative. Healthcare affordability and prices are major concerns to consumers: the majority (76%) think the system is more concerned about profitability than patient care (Jarrard).

Current events in these areas portend headwinds for most public and private healthcare organizations where attention in the next 100 days will be focused in these areas:

  • Oversight: New rules, programmatic priorities, key personnel appointments and re-organization in HHS, CMS, the FDA and VA: RFKJ’s MAHA plans and Commission appointees, Oz’ affinity for Medicare Advantage predisposition toward value-based care and Makary’s overhaul of the FDA’s drug oversight process will be “on the table” in the next 100 days.
  • Funding: Healthcare funding in the FY 2026 federal budget. The GOP-controlled House and Senate can pass a budget with minimal support from Dem’s that reflects a serious effort to reduce the federal debt ($37 trillion/123% of GDP– up from $20 trillion in 2017). Healthcare cuts expected to be significant though rumored massive cuts to Medicaid unlikely.
  • States: State healthcare referenda and executive actions: states are evaluating price controls on drugs and hospitals, reparations from insurers for delays and prior-authorizations, scope of practice restrictions and more. Topping the watchlist in most states is Medicaid funding and potential fallout from discontinued ACA marketplace subsidies factored into the FY 2026 budget being finalized by the GOP-led Congress in DC.
  • SCOTUS: Supreme Court decisions will be handed down or before June 30 when SCOTUS’ 2024 term ends including Braidwood Management v. Becerra which will determine whether the Affordable Care Act’s requirement that private insurers cover preventive services without cost-sharing will continue. The court will also opine to the authority of the HHS secretary to appoint members of the U.S. Preventive Services Task Force. The potential impact of these decisions on coverage, insurance premiums and access to preventive health services is pervasive.
  • Financial markets: Capital markets are in a watchful waiting mode as US trade policy unfolds, inflation fluctuates, the fed’s interest rate determination is disclosed and consumer spending reacts. Private investing in healthcare remains opportunistic though deal flow is shifting and risk thresholds tightening.
  • Polls: Polls draw the attention of media and elected officials. They influence how organizations prioritize advocacy strategies, address consumer complaints and concerns and manage reputations. As reflected in numerous national polls, trust in the system and its key players—insurers, hospitals, drug companies—is at a historic low.

Each sector in U.S. healthcare will be impacted differently: Three face the strongest headwinds:

  • Hospitals: Hospitals face enormous financial challenges, especially not-for-profits, safety net, rural and veteran’s hospitals. Last week’s unfavorable SCOTUS decision against hospitals alleging DSH under-payments will cost $1 billion per year. Congressional adoption of site neutral payment policy could cost $15 billion/year. Drug prices, labor costs, insurer payment cuts and red-tape will negate operating margins and lower investment income knee-capping growth and innovation plans. Complicating matters, employed physicians will demand higher pay and more control.  And Congressional budget-creators believe the sector’s 31% share of total healthcare spending makes it ripe for cuts attributable to “waste, fraud and abuse”.
  • Insurers: Medicare Advantage (which enjoys support by key administrators including CMS’ Mehmet Oz) has become a lightening rod of insurer criticism alongside prior authorization policies that restrict care. Coverage remains key to household financial security but insurers are seen as barriers to rather than facilitators of evidence-based cost-effective care. And the concentration of power in corporate titans (United, Humana, Cigna, CVS, Centene and others) is viewed with skepticism.
  • Public Health: Public health is not a priority in the U.S. health system despite recognition that social determinants account for 70% of the system’s $5 trillion spending. Most programs are funded by state and local governments with federal support limited. Public health is not seen as an investment and, in some settings treated with disdain as welfare or waste. As Mayors and Governors develop plans for the rest of 2025 and through 2026, public health cuts will be likely as federal co-funding becomes scarce.

The next 100 days will define the national agenda for the mid-term election in November 2026, reflect the solidarity of the MAGA movement and show the impact of tariffs on inflation, consumer prices and the public’s mood.

Healthcare leaders will be watching closely. All will be impacted.