The VBC Paradox: How Health Systems Can Balance Inpatient Revenue With Value-Based Care Goals

By Dr. Samyukta (Sam) Mullangi – When the conversation shifts toward value-based care (VBC), hospital systems find themselves in a delicate balancing act. On one hand, VBC strategies compel providers to prioritize preventive, coordinated, and holistic care to improve outcomes and reduce avoidable acute care utilization. On the other, hospital systems are largely embedded in a fee-for-service (FFS) environment, where inpatient admissions and emergency department visits often represent core revenue streams. This begs the question – are value-based care strategies at odds with hospital systems revenue goals? Read Full Article...

HVBA Article Summary

1. Value-Based Care (VBC) and Hospital Revenue Are Not Inherently at Odds: While VBC's focus on reducing avoidable hospitalizations might seem to conflict with hospital revenue models based on admissions, many health systems are realizing that preventable admissions often lead to inefficiencies, longer stays, and lower patient satisfaction — even within fee-for-service models. Reducing these admissions aligns with broader system goals of quality, efficiency, and patient outcomes.

2. Hybrid Payment Models Are Driving Strategic Alignment Toward VBC: Most hospitals now operate within mixed reimbursement environments, combining fee-for-service with value-based contracts. Wraparound services (e.g., care management, behavioral health integration) are essential for success in VBC models, even if they don't yield immediate fee-for-service revenue. Hospitals are adapting by using tools already in place to support both clinical performance and future VBC readiness.

3. Sustaining VBC Amid Financial Pressures Requires Strategic Investment and Innovation: Policy changes and economic pressures threaten hospital margins, making investment in VBC infrastructure difficult. However, leaders can mitigate these challenges through partnerships and vendor collaborations that convert fixed costs into variable ones. The successful shift to VBC will depend on rebalancing utilization — emphasizing outpatient, home-based, and preventive care — while transforming business models to reward outcomes over volume.

Employers brace for 6.7% increase in health benefits costs next year: Mercer

By Paige Minemyer - Employers expect to see health benefits rise by 6.7% in 2026, reaching more than $18,500 per employee on average, according to a new report. Analysts at Mercer estimate that health costs in 2025 reached an average of $17,496 for each employee, growth of 6%. That's a rate that outpaced inflation and wage growth, according to the report. The increase was driven by a sharp spike in prescription drug spending, which increased by 9.4% on average for large employers, or firms with at least 500 employees. Read Full Article…

HVBA Article Summary

1. Increased Coverage of GLP-1 Drugs and Rising Healthcare Costs: In 2025, 49% of large employers are expected to offer coverage for GLP-1 drugs used for weight loss, up from 44% in 2024. At the same time, a projected 6.7% increase in total healthcare costs is anticipated, which is likely to result in significantly higher cost-sharing burdens for employees. This trend highlights growing affordability challenges for both employers and their workforces.

2. Broader Plan Offerings to Support Affordability and Choice: To address cost concerns while meeting diverse employee needs, employers are expanding the variety of medical plans available. As of 2025, 67% of large employers now offer three or more plan options at their largest worksites, compared to 60% in 2023. These include innovative, nontraditional plans that focus on cost management strategies, such as directing care to high-performing, narrow provider networks.

3. Emphasis on Program Performance and Chronic Condition Management: A growing number of employers are prioritizing the evaluation of their health plan offerings, with 77% of large firms planning to focus on measuring healthcare program performance over the next three to five years. In parallel, many are implementing specialized programs targeting priority health conditions—such as diabetes (32%), musculoskeletal disorders (28%), and fertility care (23%)—to improve health outcomes and control long-term spending.

Managing Health Care Costs, Providing Value to Employees are Top of Mind for Health Systems

By Emily Boyle – Managing rising employee health care costs has surpassed providing access to mental health services as the top priority for U.S. hospitals, according to Aon’s 2025 Benefits Survey of Hospitals. U.S. employer health care costs have surged to historic highs, with an expected 9.5% increase in 2026—bringing the total cost per employee to more than $17,000 from $15,860 in 2025, Aon found. With that, the cost of GLP-1 medications for diabetes and weight loss now represents half of the top 10 drugs by spending. Read Full Article...

HVBA Article Summary

1. Cost Management Returns as the Top Concern for Health System Employers in 2025: Managing health care costs is the top concern for 93% of health system employers in 2025, the highest since 2020. Employers are working to balance affordability for employees with controlling rising benefit expenses. Many offer structured plan designs, with nearly 75% providing three coverage tiers and 63% offering high-deductible health plans. Additionally, 33% have separate plans for out-of-area employees to better manage costs while expanding access.

2. Improving Employee Understanding of Benefits is a Rising Priority: Only 14% of employers believe employees understand the value of their total rewards, a decline of 11 percentage points from 2024. Improving benefits comprehension is now the second-highest priority for health systems, rising seven ranks from the previous year. Employers are focusing on multi-channel communication, targeted messaging, and onboarding support, especially for new nurses. To support retention and clarity, 62% offer career advancement programs and 9% are considering them.

3. Retention Strategies Extend Beyond Traditional Benefits to Emphasize Flexibility and Culture: While 70% of employers cite compensation and 69% cite benefits as top retention tools, culture and flexibility follow closely at 62% each. Flexibility initiatives include flexible hours for non-clinical staff (55%) and compressed workweeks (36%). Recognition programs are in place at 62% of organizations to highlight employee contributions and values. Employers are also supporting well-being with mental health access (rated a high priority by 79%) and financial incentives over $500 annually for engagement in wellness programs.

Rethinking open enrollment: Why plan design needs provider performance data

By Al Codalbu – Every fall, millions of Americans make a big decision when they choose their health plan for the year ahead. During open enrollment, employees pay closer attention to their benefits than at any other time. But while the act of enrollment gets the spotlight, the choices that matter most are those that shape cost, quality and access to care. In reality, open enrollment is an intentional combination of strategic plan design decisions before an employee ever sees their plan options. Read Full Article... ^{_{(Subscription required)}}

HVBA Article Summary

1. Plan Design Drives Cost and Care Quality More Than Plan Selection: While employees typically focus on choosing a health plan during open enrollment, they rarely select specific providers at that stage. This behavior makes plan design — not plan choice — the more critical factor in influencing health outcomes and controlling costs. Without integrating provider performance data, plan networks may inadvertently direct members to lower-quality, higher-cost care, leading to complications, misdiagnoses, and long-term financial impacts for both employers and employees.

2. Embedding Provider Performance Data Improves Plan Effectiveness: The integration of objective provider performance metrics — such as clinical appropriateness, treatment effectiveness, and cost efficiency — into plan design enables employers to build high-performing, value-based networks. This approach steers members toward top-tier providers, resulting in improved health outcomes, reduced waste, and more equitable access to high-quality care. It transforms the health plan into a proactive tool for improving care delivery while managing costs.

3. Open Enrollment as a Strategic Opportunity, Not an Administrative Task: Traditionally viewed as a routine administrative process, open enrollment has the potential to become a powerful strategic moment when supported by data-driven plan design. By ensuring plans are built around high-performing providers, employers can give members confidence that their health coverage connects them to quality care. This strategic alignment at the enrollment stage sets the foundation for a more effective, affordable, and outcome-focused healthcare experience throughout the year.

Trump’s tariff rollbacks: What to know

By Mackenzie Bean – President Donald Trump recently scaled back tariffs on certain food products and reached a new trade deal with Switzerland to lower the country’s levy rate in exchange for U.S. economic investments. Read Full Article...

HVBA Article Summary

1. Tariff Exemptions on Certain Agricultural Imports: On November 14, President Trump signed an executive order granting exemptions from previously imposed reciprocal tariffs on specific agricultural products. These exemptions primarily apply to goods not typically produced domestically, such as coffee, bananas, and beef. The move aims to ease trade tensions and reduce costs for American consumers and businesses relying on these imports.

2. U.S.–Switzerland Trade Agreement Reduces Tariffs: As part of new trade negotiations, the U.S. will lower its tariff rate on Swiss imports from 39% to 15%, aligning with European Union standards. This reduction applies to a range of products, including pharmaceuticals, and reflects an effort to strengthen economic ties with Switzerland by easing one of the highest tariffs previously placed on a developed nation under the current administration.

3. Major Swiss and Liechtenstein Investment in U.S. Economy: Under the same trade deal, companies based in Switzerland and Liechtenstein have committed to investing a minimum of $200 billion in the U.S. across various industries, notably pharmaceuticals and medical devices. Of this, at least $67 billion is planned for investment by 2026. This follows earlier announcements by major Swiss firms like Novartis and Roche, which have outlined substantial U.S. expansion plans in manufacturing and research infrastructure.

Tirzepatide May Suppress Brain Signals Tied to Food Cravings

By Marilynn Larkin - A first-in-human study suggested that tirzepatide — a dual GLP-1 and glucose-dependent insulinotropic polypeptide (GIP) receptor agonist — modulated abnormal activity in the brain’s nucleus accumbens, thereby reducing food cravings and inducing weight loss in a patient with severe obesity. Read Full Article... 

HVBA Article Summary

1. Preliminary Evidence of Brain Signal as Biomarker: In two patients with severe obesity, deep brain stimulation (DBS) of the nucleus accumbens led to a noticeable reduction in delta-theta brain activity and a corresponding decrease in food-related preoccupation. These findings suggest that this specific brain signal may serve as a useful biomarker for identifying and potentially treating food cravings and impulsive eating behavior in select individuals.

2. Tirzepatide's Temporary Effect on Brain Activity: A third patient, who received tirzepatide for diabetes management following bariatric surgery, showed a reduction in food cravings and related brain signals during the initial two to four months of dose escalation. However, this benefit diminished over time, even while maintaining the maximum dose, implying that the drug’s effect on food-related brain activity may be temporary in some cases.

3. Study Limitations and Caution Against Overgeneralization: The study’s small scale—focused on only three unique patients—limits its applicability to the broader population. Experts emphasize that while the findings are methodologically interesting, they cannot be generalized to all individuals with obesity or those using incretin-based therapies. Confounding factors, such as surgical recovery or unrelated behavioral shifts, may also have influenced the observed outcomes.

U.S. stuck with D+ in preterm-birth report

By Carly Mallenbaum – The U.S. has earned a D+ for its preterm-birth rate for the fourth straight year in an annual report from March of Dimes, with the national rate stuck at 10.4%. Why it matters: The report underscores persistent gaps in equity, access and maternal care. It should be a "wake-up call" that change is needed in the U.S., says Michael Warren, the chief medical and health officer of March of Dimes, a nonprofit focused on ending preventable preterm birth and infant death. Read Full Article...

HVBA Article Summary

1. Mixed Progress in Preterm Birth Rates Across States: Recent CDC-based data reveals a divided trend among U.S. states: 19 showed improvements in preterm birth rates, while 21 saw increases. South Dakota achieved the largest improvement with a 10% decrease, whereas Washington, D.C. had the steepest rise at 8%. The report graded states based on how closely their rates aligned with the national goal of 8.1%. New Hampshire earned the highest grade (A-) with a 7.9% rate, and Mississippi received the lowest (F) due to its 15% preterm birth rate.

2. Persistent and Concerning Racial Disparities in Preterm Births: The report highlights ongoing racial disparities in preterm birth outcomes. Non-Hispanic Black mothers had a preterm birth rate of 14.7%, significantly higher than the 9.5% rate among white mothers. Experts emphasize that these differences are not due to biology but are strongly influenced by systemic issues like poverty, discrimination, and housing instability—factors that can negatively impact maternal and infant health.

3. Significant Gaps in Maternal Health Care Access: Access to maternity care remains a critical issue nationwide. Many pregnant individuals miss essential prenatal care due to provider shortages. A March of Dimes report found that over one-third of U.S. counties lack a single obstetric clinician. This lack of coverage contributes to so-called "maternity-care deserts." There is concern that funding cuts under President Trump’s administration could further reduce access, deepening disparities in maternal health care across the country.