What ‘federal funding cuts’ really mean for health systems

By Erica Cerutti, Madeline Ashley, Jakob Emerson, and Elizabeth Casolo – Historically, hospitals and health systems have rarely pointed to federal policy shifts as a factor in decisions around closures, layoffs or service reductions. That is starting to shift, with healthcare leaders increasingly linking difficult business decisions to federal funding cuts. The term encompasses several key pressures, from sweeping Medicaid reductions under the One Big Beautiful Bill Act, to the expiration of ACA subsidies and looming 340B drug pricing changes. Read Full Article...

HVBA Article Summary

1. Impact of Medicaid Reductions Under the One Big Beautiful Bill Act: The One Big Beautiful Bill Act includes over $911 billion in Medicaid spending cuts over ten years, affecting hospitals differently by state. States like Oregon and Illinois face significant funding losses, leading hospitals to anticipate increased bad debt and charity care as more patients lose Medicaid coverage. These financial pressures have already caused layoffs, service reductions, and halted capital spending in some health systems, signaling a broader trend nationwide.

2. Expiration of ACA Subsidies and Its Consequences: The impending expiration of enhanced ACA premium tax credits at the end of the year threatens to increase the uninsured population and raise premiums substantially. Millions could lose affordable coverage, forcing hospitals to absorb more uncompensated care costs. This situation is expected to worsen healthcare access, especially in rural areas, and exacerbate workforce shortages and emergency department delays.

3. Challenges with Medicare Advantage and 340B Program Changes: Hospitals face growing difficulties with Medicare Advantage plans due to administrative burdens, claim denials, and slow reimbursements, which threaten financial stability for some providers. Additionally, proposed changes to the 340B drug pricing program, including accelerated clawbacks and a shift to post-sale rebates, are expected to strain hospital finances further. These policy shifts collectively increase operational challenges for hospitals, particularly safety-net and rural providers.

Cuts to Medicare Advantage Benefits and Service Area Reductions are Business Decisions Made by Insurance Companies to Maintain Profits

By David Lipschutz – Medicare’s annual coordinated election period (AEP), sometimes known as open enrollment or fall enrollment, the time of year when Medicare beneficiaries can make changes to their Medicare Advantage (MA) or Part D plans for the following calendar year, is upon us. While insurance companies have made announcements about some planned changes, in the coming weeks we will all learn more about changes that MA plan sponsors will be making to the benefits they offer. Read Full Article...

HVBA Article Summary

1. Medicare Advantage Enrollment and Costs: Enrollment in Medicare Advantage (MA) plans has more than doubled since 2010, now covering 54% of Medicare beneficiaries, with projections to reach 64% by 2034. However, MA plans cost the Medicare program significantly more than traditional Medicare, with payments to MA plans being about 20% higher, resulting in an $84 billion cost in 2025 alone. This increased spending also leads to higher Part B premiums for all Medicare beneficiaries, including those not enrolled in MA plans.

2. Insurance Companies Prioritize Profit Over Benefits: Insurance companies offering MA plans receive rebates when their bids are below local benchmarks, which they use to provide supplemental benefits and reduce cost-sharing to attract enrollees. Despite this, recent announcements from major insurers indicate plans to cut supplemental benefits, exit unprofitable markets, and drop product lines to maintain profitability. This shift suggests that insurers are prioritizing profits over maximizing enrollment and benefits for Medicare Advantage enrollees.

3. Impact on Medicare Advantage Enrollees: The reduction in benefits and service area exits by insurers mean that many MA enrollees may face diminished coverage or need to switch plans. Insurers’ focus on profitability may lead to fewer supplemental benefits and higher out-of-pocket costs for beneficiaries. The article raises concerns about the suitability of relying on private businesses to provide healthcare when profit motives can lead to reduced access and benefits for patients.

HSA/HRA policy momentum slows after OBBBA

By Allison Bell – The chances of passing the health account provisions cut out of the One Big Beautiful Bill Act in the next few months are probably low. Rep. Blake Moore, R-Utah, a strong supporter of health savings accounts, health reimbursement arrangements and related health accounts, gave that assessment recently during a policy forum organized by the Employee Benefit Research Institute. The health account topic has traditionally been one where Democrats and Republicans have been able to find common ground. Democrats and Republicans often team up to introduce bills that could make the HSA and HRA programs simpler and more generous. Read Full Article... ^{_{(Subscription required)}}

HVBA Article Summary

1. Political Challenges to Health Account Provisions: The article highlights that despite bipartisan support historically for health savings accounts (HSAs) and health reimbursement arrangements (HRAs), current political dynamics, especially opposition from senior Democrats on the House Ways and Means Committee, are slowing momentum for passing related provisions. Some newer Democrats may support HSAs but are unlikely to overcome leadership opposition, making near-term legislative progress unlikely.

2. Financial and Legislative Obstacles: One major hurdle is the potential cost to the federal government from proposals like the 'Roth HSA,' which could reduce tax revenue. Additionally, many popular funding mechanisms ('pay-fors') were already used to finance the One Big Beautiful Bill Act (OBBBA), making it difficult to find resources to support new health account legislation. These financial constraints contribute to the low probability of passage in the near future.

3. Partial Success and Future Outlook: Although many health account provisions were removed from the final OBBBA package, three key provisions survived, including allowing HSA funds to pay for direct primary care fees and telehealth services. Advocates like Rep. Jimmy Panetta see the inclusion of these provisions as a foundation for future improvements. The Employee Benefit Research Institute (EBRI) is working to demonstrate the benefits of HSAs to skeptical lawmakers, emphasizing their value to low- and middle-income individuals as well as higher earners.

Where the AI Action Plan falls short on healthcare trust

By Lauren Spiller – In a recent opinion piece published by The Hill, Drs. John Whyte and Margaret Lozovatsky laud the current U.S. administration’s AI Action Plan as an exciting first step toward building trust in healthcare AI. They claim the plan “evinces close attention to building public and professional trust for AI technology through transparent and ethical oversite [sic] and to accelerate national standards for safety, performance and interoperability.” To be clear, AI does hold great promise for healthcare. And there are aspects of the plan worth praising, like the acceleration of AI innovation in diagnostics and treatment options, expansion of public-private partnerships, and emphasis on interoperability. But these benefits are overshadowed by three key concerns that will disproportionately impact vulnerable populations if the plan is implemented as written. Read Full Article...

HVBA Article Summary

1. Privacy Risks of Unified Health Records: The AI Action Plan proposes a data tracking system to facilitate easier sharing of personal health information among providers, but this centralization increases the risk of large-scale data breaches. Such breaches could expose sensitive medical data of millions simultaneously, disproportionately affecting patients served by providers with limited cybersecurity resources, such as community health centers. These vulnerable populations also tend to have lower digital literacy and face greater consequences from health data breaches, including discrimination in employment or insurance.

2. Vague Regulatory Standards and Insufficient Oversight: The plan advocates for deregulation by removing what it terms “burdensome AI regulations” without clearly defining these terms, potentially penalizing states that enact protective measures for patients. It prioritizes rapid AI development over safety, which is particularly risky in healthcare where errors can have serious consequences. Additionally, the plan lacks mandatory post-deployment monitoring of AI systems, relying instead on voluntary industry practices, which may allow evolving biases and errors to negatively impact patient care, especially in under-resourced communities.

3. Amplification of Healthcare Disparities Due to Removal of DEI Requirements: The plan eliminates diversity, equity, and inclusion (DEI) mandates from AI oversight frameworks, ignoring well-documented cases where AI bias has led to poorer health outcomes in underserved populations. Examples include AI models underestimating breast cancer risk in Black women and diagnostic tools failing to accurately assess pain or heart disease in minority groups. Without enforced testing of AI algorithms across diverse populations, these disparities are likely to worsen as AI adoption in healthcare expands.

The critical role of employee benefits in facilitating financial security

By Amy Friedrich – Employers across the United States are committed to helping protect their employees' health and financial security. They are offering more benefits than ever before and are continuing to cover an average of 80% of healthcare premium costs, according to the Bureau of Labor Statistics. Many are also paying for portions of dental, vision, and other insurance coverages. Not only is this the right thing to do, it's good for business: Research shows that offering a comprehensive benefits package to employees helps with talent attraction, retention, employee health and overall employee satisfaction with their employer. Read Full Article... ^{_{(Subscription required)}}

HVBA Article Summary

1. Comprehensive Benefits Offer Tangible Value and Broad Coverage: Employers are increasingly offering a wide range of benefits, covering significant portions of healthcare premiums and other insurance coverages. Nearly two-thirds of business owners surveyed in the Principal Business Owner Insights want to offer even more benefits to employees. These offerings are linked to improved talent attraction, retention, and overall employee satisfaction, demonstrating that robust benefits packages are both a moral and strategic business decision.

2. Rising Costs and Health Emergencies Expose Financial Vulnerabilities: The prevalence of high-deductible health plans means annual deductibles can range from $1,500 for individuals to over $4,000 for families. Bankrate's 2025 Annual Emergency Savings Report found that 37% of U.S. adults used emergency savings in the past year, with many withdrawing between $1,000 and $2,499. Furthermore, nearly 1 in 4 Americans will experience a disability before retirement, underscoring the importance of benefits like disability, accident, and hospital indemnity insurance to help employees bridge financial gaps caused by unexpected health events.

3. Education, Voluntary Benefits, and Policy Support Expand Access: Employers often overestimate the cost of benefits by up to three times the actual amount, according to Principal 2025 SMB Behavioral Insights, which can limit their willingness to expand offerings. Voluntary benefits, paid by employees via payroll deduction, enable employers to provide additional protection without significant expense. Government policies, such as the Employer Credit for Paid Family and Medical Leave and Secure 2.0 tax credits, further support employers—especially small and midsized businesses—in offering new or expanded benefits, helping to increase coverage and improve long-term financial security for workers.

PBMs draft voluntary changes to stave off federal action

By John Tozzi and Rachel Cohrs Zhang – Pharmacy middlemen are working on a proposal to voluntarily change some of their business practices in an effort to avoid new regulation from the Trump administration, according to people familiar with the discussions. The main lobbying group that represents so-called pharmacy benefit managers, the Pharmaceutical Care Management Association, has drafted proposals to bring to the Centers for Medicare and Medicaid Services, according to a document viewed by Bloomberg News. Read Full Article... ^{_{(Subscription required)}}

HVBA Article Summary

1. Voluntary Proposal to Avoid Regulation: Pharmacy benefit managers (PBMs) are drafting voluntary changes to their business practices to preempt new regulations from the Trump administration. The Pharmaceutical Care Management Association, the main lobbying group for PBMs, is preparing proposals to present to the Centers for Medicare and Medicaid Services (CMS). These proposals include measures to protect patients from paying more than uninsured prices, promote the use of lower-cost biologic drugs, and increase support for rural and independent pharmacies.

2. Industry and Government Interaction: CMS regularly engages with healthcare industry stakeholders but does not disclose details of these discussions. PBMs face bipartisan pressure in Washington to increase transparency and impose stricter rules on how they negotiate drug discounts on behalf of health plans and employers. The three largest PBMs control 80% of the market and are part of larger health insurer and pharmacy conglomerates, which adds complexity to regulatory oversight.

3. Skepticism from Pharmacy Groups: The National Community Pharmacists Association criticized the PBMs’ voluntary proposal as a strategic move that should not be trusted by the administration. They argue that PBMs could have implemented these changes earlier but chose not to, and therefore the administration should be cautious in accepting self-regulation efforts. This reflects ongoing tension between PBMs and independent pharmacies regarding business practices and regulatory accountability.

Best use of emerging tech in health systems from 50 leaders

By Scott King – Emerging technologies have greatly improved efficiency at most health systems. Over 50 healthcare leaders spoke with Becker’s about their best uses of tech in the past year. The leaders featured below are speaking at Becker’s 10th Annual Health IT + Digital Health + RCM Conference, Sept. 30-Oct. 3, 2025, at the Hyatt Regency Chicago. Read Full Article...

HVBA Article Summary

1. Wide Adoption of Ambient AI for Clinical Documentation: Many health systems have implemented ambient AI technologies, such as AI scribes and ambient note documentation tools, to reduce the administrative burden on clinicians. These tools automate clinical documentation during patient encounters, allowing providers to focus more on patient care, reduce burnout, and improve overall efficiency. The adoption of these technologies has shown measurable benefits including reduced documentation time, improved provider satisfaction, and enhanced patient experience.

2. Expansion of Virtual Care and Remote Monitoring: Health systems have increasingly invested in virtual care platforms, including virtual nursing, telemedicine, and remote patient monitoring. These technologies help extend care beyond traditional settings, improve patient access, and optimize resource utilization. Virtual monitoring tools also support early detection of patient deterioration and safety risks, contributing to better clinical outcomes and reduced staff stress.

3. Strategic Use of AI and Data Analytics for Operational and Clinical Improvements: Organizations are leveraging AI-driven tools and advanced analytics to enhance various aspects of healthcare delivery, including revenue cycle management, patient access, clinical decision support, and operational efficiency. Examples include AI-enabled billing and coding software, machine learning for credit balance resolution, and AI governance frameworks to ensure safe and effective deployment. These initiatives demonstrate a commitment to integrating technology responsibly to drive measurable improvements in quality, compliance, and financial performance.

High-markup hospitals also have worst patient outcomes

By Alan Goforth – High-markup hospitals, which tend to be for-profit and located in large metropolitan areas, charge up to 17 times the true cost of care, a new study from UCLA found. “Hospital prices affect everyone -- patients, families, employers, taxpayers and government programs, and when hospitals charge excessively, these costs ripple across the health system,” said Sara Sakowitz, a researcher at the university’s David Geffen School of Medicine who led the study. “Patients may be stuck with high out-of-pocket bills, sometimes leading to financial toxicity or even medical bankruptcy. For those with insurance, inflated prices translate into higher monthly premiums and deductibles, which affect families, employers and taxpayers alike.” Read Full Article... ^{_{(Subscription required)}}

HVBA Article Summary

1. High Markups and Patient Outcomes: The UCLA study found that hospitals charging significantly above the true cost of care, often up to 17 times more, tend to have worse patient outcomes. These high-markup hospitals, mostly for-profit and in large metropolitan areas, showed higher rates of complications and readmissions compared to hospitals with average markups. This indicates that higher prices do not equate to better quality of care, raising concerns about the value patients receive for the costs they incur.

2. Impact on Patients and the Healthcare System: Excessive hospital pricing affects a broad range of stakeholders including patients, families, employers, taxpayers, and government programs. Patients may face high out-of-pocket expenses that can lead to financial hardship or medical bankruptcy. For insured individuals, inflated hospital prices contribute to increased premiums and deductibles, thereby affecting the overall affordability and accessibility of healthcare.

3. Need for Transparency and Regulation: The study highlights the lack of price transparency and the difficulty patients face in comparing hospital costs and quality, especially in urgent care situations. Currently, only Maryland and West Virginia regulate hospital pricing. Researchers advocate for public, standardized reporting of hospital markups linked to patient outcomes as a critical step toward a fairer, safer, and more accountable healthcare system. Further research is also needed to understand why high-markup hospitals have poorer outcomes.