Medicare Advantage enrollees who developed a new complex condition, such as congestive heart failure or Alzheimer’s disease, were more likely to leave their plan for traditional Medicare the next year, according to a study published Aug. 21 in JAMA Health Forum.
Medicare Advantage (MA), the private alternative to traditional Medicare, covered 54% of Medicare beneficiaries in 2025, the study noted. MA plans offer perks traditional Medicare doesn’t guarantee, such as spending caps and built-in drug coverage, but they also use prior authorization and limited networks that can slow down care. Folks with bigger health needs have left MA at higher rates than healthier enrollees.
However, leaving isn’t simple. In most states, insurers don’t have to sell Medigap, the supplemental coverage that fills traditional Medicare’s gaps, to someone who skipped it when they first signed up. That can leave beneficiaries who get sick later stuck without that backup option.
The study was led by Mark K. Meiselbach, Ph.D., of the Department of Health Policy and Management at Johns Hopkins Bloomberg School of Public Health, and his team, who said past studies treated a new diagnosis as simply yes-or-no and mostly tracked switches to traditional Medicare. The researchers wanted to see whether leaving MA increases with the number of new conditions a person develops and to separate switches to traditional Medicare from switches to a different MA plan, something earlier research hadn’t done.
JAMA Health Forum finds Medicare Advantage members with new complex diagnoses increasingly switch to traditional Medicare, highlighting MediGap barriers, state protections, and plan limits.
The retrospective cohort study used Medicare enrollment and claims data from 2016 through 2021, analyzed in late 2025 and early 2026. Researchers tracked beneficiaries who stayed in an MA plan all of 2016 and had no complex condition through 2018. Using a standard federal algorithm, they flagged eight conditions: heart attack, Alzheimer disease, atrial fibrillation, chronic kidney disease, chronic obstructive pulmonary disease (COPD), depression, congestive heart failure and stroke.
A treatment group of 219,942 beneficiaries developed one of those conditions in 2019; a comparison group of 834,984 did not develop one through 2021. Using a difference-in-differences design, researchers compared how disenrollment changed for each group before and after 2019, then checked whether that change depended on how many new conditions someone developed, their state’s Medigap rules, and whether their MA plan was a health maintenance organization (HMO).
Developing any new complex condition raised MA disenrollment by 3.3 percentage points. Almost all of that increase came from people leaving for traditional Medicare rather than switching to a different MA plan. The more conditions someone developed, the more likely they were to leave: 1.4 percentage points with one new condition, up to 12.8 points among the 1,010 people with four or more. A new Alzheimer’s disease diagnosis had the single biggest effect, an 8.6 percentage point increase, while the rest ranged from 2.9 to 5.0 points.
Beneficiaries in the four states with Medigap guaranteed-issue and community-rating rules, Connecticut, Maine, Massachusetts and New York, were 1.5 percentage points more likely to leave for traditional Medicare than beneficiaries elsewhere. Those enrolled in HMO plans were less likely to leave for traditional Medicare but more likely to switch to a different MA plan.
Dual-eligible beneficiaries, who qualify for both Medicare and Medicaid, left for traditional Medicare at higher rates and switched MA plans less often, which the authors said tracks with Medicaid reducing their need for Medigap. Plan star ratings didn’t matter much: those in 4- or 5-star plans left at about the same rate as those in 3-star plans after a new diagnosis, suggesting star ratings don’t capture how well a plan serves sicker members.
“These findings underscore the difficulty of making an initial enrollment decision in Medicare,” the study’s authors wrote in the discussion. “Beneficiaries cannot foresee all of their future health needs when they first enroll in MA, but the consequences of that decision may depend on health events that occur years later.”
Strengths in this study include the tracked disenrollment trends before 2019, not just a single before-and-after comparison, and the study found no sign the groups were already diverging. The results also held up after adjusting for other chronic conditions people developed.
However, there are limits. Since new conditions were identified from claims, which usually show up after a diagnosis, the authors said their numbers likely undercount the true effect rather than overstate it. Counting conditions is also an imperfect stand-in for true complexity, and the group with four or more new conditions was small, just 1,010 people, so those figures carry more uncertainty. The data ends in 2021 and doesn’t reflect newer MA plan designs.
The authors confirmed that state Medigap protections make it easier for more ill beneficiaries to switch to traditional Medicare, but expanding those protections more broadly could push Medigap premiums up for everyone. And MA star ratings, as they currently work, may not reflect how well a plan actually serves members whose health needs have grown more complex.
In a live conversation recorded at Aspen Ideas: Health, executives from a hospital, insurer and pharmacy join a top Trump administration official and leading health economist to discuss how to collectively bring down health care costs.
The debate over how to bring down health care costs often becomes a finger pointing game. Hospitals, insurers and drug companies all say the others are to blame.
Earlier this summer, I moderated a panel that tried to take a more collaborative approach.
We brought together a health system CEO, an insurance executive, a pharmacy leader, a top Trump administration official and one of the country’s leading health economists. The goal was to discuss how everyone in the health care industry can work together to make care more affordable.
The conversation took place at Aspen Ideas: Health, a conference that gathers policymakers, clinicians, researchers and industry leaders to talk about some of the biggest issues in health care.
I hope you listen to the conversation in our podcast feed, read the transcript or watch the video. I moderated another discussion in Aspen with two physicians and an ethicist about how we can better navigate the uncertainty that permeates our health care system, which is also worth checking out.
Funding from the Rural Health Transformation Program is beginning to flow to the states. The purpose is larger, but some say its success should be measured by whether it preserves access to care at rural hospitals.
The Rural Health Transformation Program represents one of the largest federal investments ever made in rural healthcare, with $50 billion authorized over five years to help states improve access, strengthen the workforce, and modernize care delivery in rural areas. Still, as states move from planning to implementation, the program faces an immediate test: Can it deliver meaningful transformation while rural hospitals continue to face mounting financial and operational pressures?
The answer is not so cut-and-dried.
Some rural health advocates view the program as an unprecedented opportunity to rethink how care is delivered in underserved communities. Others caution that although the funding can accelerate innovation, it was never designed to replace revenue that providers could lose because of Medicaid policy changes, such as work requirements.
Alan Morgan is CEO of the National Rural Health Association.
“It’s apples and oranges,” says Alan Morgan, M.P.A., CEO of the National Rural Health Association. “The Rural Health Transformation Program was created to invest in long-term innovation, not to replace Medicaid funding. Comparing the two misses the intent of the legislation.”
At the same time, Morgan acknowledged that rural providers remain deeply concerned about what lies ahead.
“The math just doesn’t work,” he said. “Nearly one-half of rural hospitals already operate at a loss, and hundreds remain at risk of closure if financial pressures continue to mount.”
Innovation versus stabilization
Congress created the Rural Health Transformation Program as part of the One Big Beautiful Bill Act that President Donald Trump signed into law on July 4, 2025. It was added in part to offset the federal Medicaid cuts in the bill, which the Congressional Budget Office estimated will total $911 billion over a 10-year period. The program provides $10 billion annually through 2030 to help states invest in new care models, workforce development, technology and other initiatives intended to improve healthcare delivery in rural areas.
Ryan Cohn is chief strategy officer at Sachs Media.
Ryan Cohn, chief strategy officer at Sachs Media, who has advised multiple states, health systems and healthcare organizations on Rural Health Transformation Program applications, says that the funding is not sufficient to offset the broader financial challenges facing rural healthcare, noting that the fund was created after lawmakers expressed concern that the Medicaid cuts could disproportionately affect rural providers, especially rural hospitals. And once CMS implemented the program, its focus shifted toward transforming healthcare delivery rather than serving as a financial backstop for struggling hospitals.
“The real question isn’t whether $50 billion is enough money,” Cohn comments. “It’s whether we can stand up a new care model fast enough to replace a hospital that may close in the next few years.”
Harold D. Miller, M.S., president and CEO of the Center for Healthcare Quality and Payment Reform, says he believes the program has the potential to preserve services in rural communities, but only if states have enough flexibility to direct funding where it is needed most.
“The $10 billion per year in new funds under RHTP [Rural Health Transformation Program] could go a long way to preventing the loss of services in rural areas if the money could be directed to the hospitals that are currently being underpaid,” Miller observes.
Instead, he adds, CMS has limited the amount states can use for direct provider payments while encouraging investment in new initiatives and technology.
“Although those investments may ultimately prove valuable, technology alone cannot replace essential healthcare services,” he says. “A phone app can’t deliver a baby, draw blood, stitch a wound or do a CT scan.”
Implementation
After months spent developing applications, states are now beginning the nuts-and-bolts work of turning proposals into operational programs.
According to Cohn, five priorities appear consistently across state plans: workforce development; telehealth and data infrastructure; prevention; new payment and delivery models; and bringing care closer to patients through mobile clinics and regional care networks.
Joe Ganley, J.D., vice president of government and regulatory affairs for athenahealth, says rural practices already operate with no room to spare. “The margin for error has essentially disappeared,” Ganley said.
Among those priorities, workforce development stands out as the dominant theme, he says. Many states are investing in residency programs, loan repayment initiatives and “grow your own” workforce strategies that encourage students from rural communities to pursue healthcare careers locally in hopes they will eventually remain there.
Technology investments also extend well beyond telehealth. Cohn says states are focusing on improving interoperability so rural hospitals, clinics and emergency medical services can share patient information more effectively. Others are proposing artificial intelligence for population health, drone delivery of medications and laboratory tests, and technology-enabled transportation programs designed to improve access to care.
Even so, implementation presents significant challenges. “This money was built to move fast,” Cohn says. Some states first had to establish entirely new administrative structures before funding could reach providers. Others continue to develop procurement processes while preparing to demonstrate measurable outcomes that will influence future funding allocations.
Sustainability also remains an open question. “A new residency slot or telehealth program only counts if it outlives the initial RHTP funding,” Cohn says. “Not every plan has a fully formed answer for what happens in year six.”
Financial pressures
Although much of the discussion surrounding the Rural Health Transformation Program focuses on future transformation, many providers continue grappling with immediate financial realities.
Joe Ganley, J.D., vice president of government and regulatory affairs for athenahealth, says rural practices already operate with no room to spare. “The margin for error has essentially disappeared,” Ganley said.
When patients delay appointments, ration medications or postpone treatment because of cost, practices experience more than declining revenue. Patients often arrive later with more complex medical needs, increasing clinical and operational burdens. “Providers feel it immediately — in no-shows, in collections and in the clinical complexity of patients who arrive later and sicker,” Ganley says.
Beyond those financial pressures, Ganley notes that rural physician practices also continue to struggle with workforce shortages and limited interoperability.
“Many rural practices operate with one to two months of reserves,” Ganley said. “That’s not a buffer — it’s a cliff. Any disruption to payment flows, whether from coverage losses, billing delays or reimbursement changes, can threaten the viability of organizations that communities depend on as their only access point for primary care.”
He adds that recruiting and retaining clinicians remains difficult, while limited interoperability makes it harder for rural providers to coordinate care and participate in value-based payment models.
Measuring success
Even as the rural health program dollars begin reaching states, many believe it is far too early to determine whether the $50 billion fund will live up to its name and change rural healthcare for the better. “I think it’s too early to determine, and that’s the honest truth,” says Morgan. Many states are only beginning to release requests for proposals and identify where funding will be directed. Although states must obligate the funds within required timelines, many providers are still waiting to learn whether they will receive support and how they will be permitted to use it. “Our members are concerned,” Morgan adds. “Are we going to receive any of the money? How are we going to be able to use the funds? There’s just a lot yet unknown.”
Miller notes the program’s success should not be measured by the number of grants awarded or technology projects launched. He says he believes there is a relatively simple way to take stock of the program.
“If hospitals continue to close and eliminate services in 2026 and 2027, even with $10 billion in new funds available each year, the Rural Health Transformation Program should be viewed as a failure,” Miller says.
In his opinion, preserving essential healthcare services — including obstetrics, emergency care and primary care — must remain the priority. Even if federal Medicaid policy changes were reversed tomorrow, many small rural hospitals would continue struggling because reimbursement from Medicare Advantage, commercial insurers and other payers often fails to cover the cost of providing care in sparsely populated communities.
The No. 1
Morgan said workforce issues remain the No. 1 concern among rural hospitals, followed closely by financial stability. He’s particularly optimistic about states using the rural health funds to create “grow your own” workforce initiatives that recruit students from rural communities, train them locally and encourage them to practice close to home after graduation.
“I think that’s going to be interesting,” Morgan says, noting that locally trained clinicians are far more likely to remain in rural communities over the long term. Cohn heard similar priorities while working with states on their applications. “Workforce development is in most states’ plans because providers everywhere are facing significant staffing shortages,” he says.
Some states are investing in rural residency programs, loan repayment initiatives and accelerated licensing efforts. Others are combining workforce initiatives with telehealth and regional partnerships designed to extend scarce clinical expertise across larger geographic areas.
Ganley notes that technology can help relieve administrative burdens, but only if it simplifies clinicians’ work rather than adding complexity.
“The practices that will sustain access are the ones that can operate efficiently under financial constraints, reduce administrative burden without growing their administrative head count and connect their patients to the right level of care regardless of where that care is delivered,” he says.
Behavioral health providers are experiencing many of the same pressures. Shannon Werb, CEO of Array Behavioral Care, says that disruptions in Medicaid coverage often interrupt outpatient behavioral healthcare, causing patients to delay treatment until they require crisis care.
“When patients lose coverage or face affordability challenges, they often delay care until their condition reaches a crisis point,” says Werb. “At that stage, the emergency room becomes the default access point for treatment.” The result, he said, is longer behavioral health boarding times, increased uncompensated care and additional strain on hospitals.
The long haul
The biggest question about the infusion of federal funds into rural healthcare is whether the investment will continue paying dividends after federal funding expires. For a problem that has been decades in the making, five years is not that much time, and $50 billion is not that much money.
Because the program is scheduled to end after five years, healthcare leaders repeatedly emphasized the importance of building sustainable systems rather than launching short-lived projects.
“The real measure isn’t dollars spent or programs announced,” Cohn says. “It’s whether a rural patient can access care in 2028 that they couldn’t get in 2025.”
Morgan agrees that outcomes, not spending, will determine whether the initiative succeeds. The first warning sign, he says, would be an increase in rural hospital and rural health clinic closures. He says life expectancy is the ultimate yardstick. “We continue to see a decline in the overall life expectancies of rural communities versus urban. At the end of the day, that’s the measure that really matters.”
A 9.5% 2027 increase would mark the fourth consecutive year of near–double-digit employer medical trend, based on data from 1,100+ employers covering 7.9 million employees.
Utilization growth, chronic-condition burden, and increased high-cost claim incidence are central contributors to accelerating plan spend across employer-sponsored coverage.
GLP-1 costs are rising as use extends beyond diabetes/obesity into cardiovascular disease, sleep apnea, and CKD, with oral options expanding eligibility and limiting employer cost-containment.
Employers funded ~82% of total plan costs in 2026, yet employees still paid $5,297 on average, driven by a 10.2% out-of-pocket increase and leaner plan designs.
Industry variation is material, with 2025–2026 employer cost growth ranging from 6.5% (health care) to 9.8% (finance/insurance), echoing KFF and Mercer trend warnings.
Aon projects a fourth straight year of near double-digit health cost growth for U.S. employers, with 2027 costs set to top $19,000 per worker.
Employer health care costs in the United States may rise 9.5% in 2027, extending a fourth consecutive year of near double-digit increases the longest such stretch since 2007, according to a recent analysis by Aon.
Employer healthcare costs could rise 9.5% in 2027, pushing the average per-employee price tag past $19,000, according to a recent analysis by the consulting firm Aon. If this happens, it will be the fourth year running that cost growth has approached double digits, a run Aon says is unmatched in its trend data since 2007. The company currently has data from more than 1,100 U.S. employers representing 7.9 million employees.
Behind the projected growth is a familiar mix of pressures, including climbing utilization of medical services, a growing share of members with chronic conditions, and more high-cost claims moving through employer plans. Specialty and GLP-1 drug spending adds another layer, which is growing as GLP-1s move beyond diabetes and weight management into cardiovascular disease, sleep apnea and chronic kidney disease. New oral formulations are widening the pool of patients who can access the drugs, which cuts against employers’ efforts to hold the line on pharmacy spend. Aon also flagged providers’ use of AI tools for clinical documentation and coding, which the firm says is contributing to higher billed charges in some cases.
“The organizations best positioned for the future will be those that can proactively identify emerging risks and take targeted action before costs escalate,” Debbie Ashford, North America Chief Actuary, Health Solutions for Aon, also said in the news release. “Health care costs are becoming increasingly difficult to manage through traditional approaches alone. Employers will need better data and deeper insights to understand where costs are rising and how they can make more informed decisions about their health care investments.”
Who absorbs the increase?
Employer health plans don’t pass every dollar of that growth on to workers. Aon’s data shows employers picked up approximately 82% of total plan costs in 2026, a share that’s held roughly steady even as the underlying cost trend accelerated. Employer costs more than doubled from 2022 to 2026: climbing from 3.7% to 8.8% in 2026, respectively.
Employees still felt it. The average worker paid $5,297 toward health care in 2026, split between $3,130 in payroll premium contributions and $2,167 in out-of-pocket spending, up from $4,909 the year before. The out-of-pocket piece grew faster than premiums, up 10.2%, which Aon attributes to both higher utilization and a shift toward leaner plan designs with more member cost-sharing built in.
The picture isn’t uniform across sectors. Aon’s industry breakdown shows a wide spread in how much employer costs grew from 2025 to 2026:
Finance and Insurance: 9.8%
Technology and Communications: 9.1%
Public Sector: 8.8%
Professional Services: 8.7%
Retail and Wholesale Trade: 7.7%
Manufacturing: 7.5%
Health Care: 6.5%
How this compares across the industry
Aon’s numbers land alongside other recent industry data pointing the same direction. KFF’s benchmark survey of employer health benefits found family premiums rose 6% in 2025 to reach nearly $27,000, a jump the group said outpaced general inflation by a wide margin. KFF has separately flagged early signals that 2026 cost trends would run even higher. Mercer and the International Foundation of Employee Benefit Plans have published similar warnings over the past year, with some industry surveys describing the coming increase as among the largest employers have faced in over a decade.
“Employers have now experienced several consecutive years of health care cost increases that are approaching double digits,” Mike Pasterick, North America Health Solutions Leader for Aon, said in the news release. “At this level, rising health care costs become much more than a budgeting challenge and influence organizational decisions from benefits strategy and employee affordability to broader workforce and financial planning priorities.”
Over the weekend, I caught parts of North Carolina’s 15-10 win over TCU in Dublin, Ireland and NC State’s loss to Virginia 34-8 in the ACC opener. All told, the NCAA Week Zero schedule included 8 games with few surprises but a welcome arrival to the sport’s avid followers including me.
As the NCAA commences its Week One schedule with 87 games Thursday thru Monday on tap, I find myself conflicted. I am a college football fan having watched religiously for years. Growing up in Chattanooga, Thanksgiving Day started with worship at Central Church of Christ, lunch at S&W Cafeteria downtown and Chamberlin Field in the afternoon to watch the University of Chattanooga Moccasins take on the likes of Southern MS and Furman. And News Year’s Day Bowl games were equally sacred: the Cotton, Gator, Orange, Sugar and Rose Bowls featured marque teams who’d survived to 10-game seasons and final rankings were determined by sports media. Pop would re-locate our second black and white TV to the den so we could watch 2 at once (provided the rabbit ears were aimed right). And Mimi made unhealthy Vienna sausage wraps so we never had to leave the room.
Those days are gone. That was before NIL (name, image and likeness) money poured in to lure elite athletes to the highest bidders. That was before the 5 major bowl games played on New Year’s Day morphed into 46 bowl games lollapalooza played over 45 days. That was when the Big 10 had 10 mostly midwestern teams (vs. 18 today including Oregon, Washington, USC and UCLA) and the SEC had 12 mostly southeastern teams vs. 16 today which include Teas and Oklahoma this year. And that was when a family of four could afford to attend a game: per StubHub, tickets for my most cherished contests this season will be $550 to $9093 for Texas-Ohio State September 12, and $434 for the “get in” seats to $4657 for the Michigan-Ohio State matchup November 28.
On Bill Maher Saturday night, Wesleyan University President Michael Roth answered the hyper- cynical host’ questions about the value of higher education and left-leaning faculty bias. Wesleyan is among the three “Little Ivies” (along with Amherst and Williams) where the curriculum is liberal arts, tuition is high, intercollegiate athletic competition is modest and politics is decidedly progressive—a “monoculture” per Roth. Maher questioned whether higher education today educates young adults to be informed, critical thinkers or indoctrinates leftist ideology. Roth countered that college faculty engage students to be thoughtful on issues otherwise overlooked/neglected. Maher ended ‘it’s not working.’
Their dialogue might have been about healthcare. The health system, like higher education, faces a crisis of confidence and its future is being defined by its finances. The health system’s version of NIL centers on aim now centers on business models for specialty services in modern facilities. The Big Players in both industries– consolidated hospital systems, big multi-specialty medical groups, corporate insurers and universities with Big Endowments and Big Athletic Department budgets– are doing well while others struggle.
Higher education and healthcare face extinction as we’ve known them. The public thinks their purpose has been compromised by their growing dependence on private capital—boosters, donors, investors, private equity, and corporate partners. Public money plays a small role for the Big Players. The unintended consequences are well documented—higher prices for tuition and services, variable levels of institutional quality based on access to funds, and increased polarization between have’s and have nots.
In healthcare, it’s no secret. Physicians who specialize make 3 times what primary care clinicians earn and 10 times community health worker annual wages. The 2Q earnings of the nation’s multi-hospital systems were robust per Fitch while small and independent hospitals struggled. The same dynamic holds true for nursing homes, health insurers and public health programs—Darwinian reality that money matters (sometimes too much). In healthcare, it’s manifest in a growing number of shifts…
CMS’ crackdown on fraud, waste and abuse to protect public money is healthcare.
Congress’ Bipartisan demand for price transparency and limits on private equity ownership of nursing homes, hospitals and medical practices.
Court challenges to monopolistic-like business practices that control licensing, drug patents or even the CPT coding system.
Public belief that an unforeseen medical bill will bankrupt the average household.
The public’s growing acceptance of embracing alternative sites and methods of care and ways of paying for them.
And recognition by industry leaders that industries like healthcare and higher education face uncertain futures.
I will watch college football this weekend and, no doubt, hear lots about star players one year removed from their previous NIL contracts. They’re usually the highest paid and best known on the team. And, for some of that team’s followers, their performance on the field will matter more than their education off the field and the academic performance of the school.
Healthcare and higher education are institutions of noble, essential purpose to society. Both face criticism they’ve lost their way and their value propositions are suspect.
PS: Last week, Dolly Parton died leaving a legacy of music and philanthropy appreciated worldwide. I first met Dolly and Carl as he inspected the paving job his company completed in my neighborhood and later as a Vanderbilt Medical Center donor ambassador. A life well-lived and worthy of respect and appreciation.
This week, a jury verdict is expected in the trial of Lindsay Clancy that will put the spotlight on postpartum psychosis — a rare, severe psychiatric emergency that causes a rapid loss of touch with reality after childbirth. It’s is not currently included in the Diagnostic and Statistical Manual of Mental Disorders (DSM-5), but there’s momentum to have it added.
Last week, during the U.S. Senate and House recess and back-to-school rush, media attention to healthcare was negligible. Healthcare trade media noted impressive earnings for Moderna and Bon Secours and the WSJ Journal announced a Medicare Advantage partnership between Costco and SCAN. No major Executive Orders from the White House or CMS rule changes. No major clinical breakthroughs, vaccine policy changes or lawsuits. But a couple of new reports frame the existential risk facing the industry: spending.
AON forecast for employer health spending: AON forecasts employers will see a 9.5% increase in 2027–the same as this year after increases of 9% in 2025 and 8.5% in 2024.
U.S. National Debt: The national debt officially passed the $40 trillion mark Wednesday, which includes $2 trillion this year. Note: Healthcare spending is a major contributor representing 27% of total federal spending.
The common theme in both is the steady growth of healthcare spending—faster than wages, higher than inflation and GDP growth and increasingly the result of higher prices for drugs, specialty services, facility modernization, technology and administrative overhead.
The industry’s aversion to transparency, protection of its business-to-business economics and dependence on private investment perpetuate four myths that justify its proclivity for uncontested spending:
Myth One: Healthcare utilization is the result of verifiable (true) demand despite evidence that induced demand from financial incentives is significant and unnecessary care widespread.
Myth Two: Healthcare spending above overall economic growth is necessary because demand is increasing though unit price increases for drugs, specialty care and hospital outpatient services exceed demand routinely.
Myth Three: Healthcare spending growth is unavoidable as the population ages, medical problems become more complex and clinical breakthroughs (like GLP-1 obesity drugs) are integrated in the system though the industry enjoys legal protections to insiders that limit competition.
Myth Four: Healthcare spending in the U.S. system is necessary to our performance as the world’s global leader for quality though at least 15 other systems outperform the U.S. in key measures of mortality, morbidity, life expectancy and satisfaction while spending 30-50% less per capita on healthcare.
As the midterm election November 3 nears, affordability and costs of living will be prominent in campaign rhetoric. Polling indicates healthcare costs, especially insurance premiums, prescription drug costs and hospital care, factor heavily in how voters assess promises on the campaign trail. Both parties espouse the need for systemic change in healthcare citing affordability for their reasoning. Three general solutions have found their way into this election cycle:
Price controls imposed selectively by state/federal government applied to hospitals, insurance premiums, physician services and prescription drugs.
Increased competition enacted through mandatory price transparency, constraints on consolidation and incentives based on value (price + outcome) instead of volume.
Government control of healthcare payments (single payer) to providers to align spending with budgets while lowering administrative costs for participation.
The reality is none of these is without risk, and voters are wildly misinformed about all. But there’s no doubt they’ll be on the table as a majority consensus forms around a better system. They’re sick of the status quo. They see little difference between not-for-profit and for-profit operators and want something better. They see healthcare spending increases as the product of an industry that cares about its profit first and everything else second.
Healthcare spending—contributing factors and mitigation– is a topic every organization in healthcare must address candidly and holistically. There should be no delusion that interest will subside anytime soon. Just as consumers are rewarding organizations in financial services, retail, higher education and organized religion that offer “newer, better” alternatives, the healthcare landscape will be re-defined by those that do more than opine about affordability and conduct business as usual.
As the nation pivoted to its Back-to-School routines last week while the Senate and House were recessed, the new cycle paid attention to familiar stories:
On page one…
US involvement in Iran and Ukraine wars.
Inflation, prices, jobs and costs of living for food, gas and housing.
Mid-term election primary results and surprises.
Weather-related disruptions in Hawaii, Iowa and the persistent heat wave.
On page two…
Courtroom proceedings around Lindsay Clancy (mother of 3 who killed her children), Glen Murdoch (SC lawyer alleged to have killed his wife and son) and Luigi Mangione (alleged killer of UnitedHealth executive Brian Thompson).
Ongoing fallout from proposed vaccine policy changes by HHS.
Data center pushback and everything else.
I am a news junkie. I depend on real-time news feeds across the spectrum from conservative to progressive thru traditional and unconventional sources.
I am a healthcare guy: I study the health system to monitor trends, emergent themes and credible studies that influence its policies, performance and winners and losers.
And I am a consumer: I live a relatively normal life hoping to take care of my family and spend time on matters that matter. Increasingly, that involves the health and wellbeing of those I love.
Last week was inconsequential in the big scheme of healthcare: media attention was limited. The 3 court proceedings carried underlying themes of mental health. Reporting about the economy centered on costs of living sans household health costs chronically overlooked in business reporting. And posturing for the November 3 general election sparked commentary about Democratic socialism and Republican intent to make political points on healthcare.
This week will be no different. Healthcare news will largely be subordinate to Page One headlines unless a pandemic at home is declared or a celebrity’s personal health challenge is disclosed on a slow news day.
National media with few exceptions cover healthcare incompletely and inconsistently. In-depth coverage is rare. Investigative reporting is pre-wired toward misdeeds and corporate greed. Local media is equally inclined but budget limitations limit local coverage.
And social media are all over the place: misinformation, inadequate verification/validation of primary sources, and bias are systemic.
I believe the U.S. health system’s loss of trust and confidence is a direct result of its inadequacy in communicating. That’s not to say it hasn’t tried but it’s strategies and tactics have failed for obvious reasons:
The business of U.S. Healthcare prefers a low profile. Most healthcare companies prefer to promote their successes and hide their failures. Transparency has never been welcome.
The business models that dominate U.S. healthcare are driven by consolidation and corporatization. Access to capital is the gatekeeper. Consolidators are winning and independents aren’t. The industry’s become Big Business to most. It espouses concern for affordability without making it reality.
The public’s at a loss to pursue alternatives. Polls show dissatisfaction with hospitals, drug companies, insurers, et al is at all-time highs. Polls show the majority think the system is fundamentally flawed and a change necessary. But fear of alternatives is even higher, especially a system engineered by the federal government.
Regulation of the industry at the state and federal levels has protected its incumbents and sustained its profitability. Its B2B (business to business) model reinforces value creation for investors and limits B2C (business to consumer) intrusion. Insiders with their trade associations and lobbyists seek incremental changes that protect the status quo and keep others out.
The future of the U.S. health system is uncertain. It faces huge barriers to sustaining its “too big to fail” big brands. Its biggest hurdle will be public support.
The public wants a seamless system that’s easy to navigate and comprehensive, not a patchwork of clinics, specialties, facilities and programs accessible to some but not all.
The public wants a system that’s transparent: clinical evidence, outcomes, errors, business practices, executive compensation, costs and prices easily accessible when needed.
The public wants a system that’s personalized: impersonal service thru automated telephony and AI-generated prompts in the name of efficiency are suspect.
The public wants a system that’s cheaper. It believes there’s a Costco solution in healthcare and they’re not afraid to try it.
The entire industry is now on the defensive. Old playbooks used to tell its stories no longer work. It’s a challenge for most.
