Insights

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• This week’s edition features our Quarterly What’s Next Digest with three predictions for Q4 and beyond: 

  • Regardless of which party controls Congress after the midterms, healthcare policy will favor bipartisan affordability measures, such as price transparency, site-neutral payment, and 340B reform. 

  • Oscar Health is poised to take a larger share of the shrinking market for individual insurance, making it a more consequential player. 

  • AI consumption spend will grow faster than health system IT budgets through 2027, even if average token prices fall. 

Moving on to our market scans: 

• Bon Secours Mercy Health affiliate HealthSpan Partners agreed to acquire and take Surgery Partners private in a deal that values the company at $5.7B, with the transaction expected to close in Q1 pending shareholder and regulatory approvals. 

  • Many of the largest national ASC chains might soon be owned by health systems or payviders like UnitedHealth Group, leaving fewer options for other health systems thinking about copying this playbook for growth. 

• Chicago-based Rush University System for Health and Endeavor Health announced plans to combine into a 12-hospital system. 

  • A key dynamic to watch is the impact on referral flows: the merger could pay off if Endeavor patients who need tertiary and quaternary care go to Rush rather than the academic centers that receive them today. 

• Home-based care operator DispatchHealth is scaling back an offering for health systems that deployed advanced practice clinicians into patient homes to help avoid emergency department visits. 

  • The shift is part of a broader reorganization to separate the company’s clinical staffing business from its logistics and remote monitoring technology offerings. 

  • Clinical staffing is already a core competency for health systems, but technology often isn’t. 

• A new executive order signed by President Trump directs HHS through the NIH to create a Women’s Health Division and creates a White House task force to coordinate federal efforts. 

  • The order emphasizes healthcare research that translates findings into clinical care, but it doesn’t commit any new funds. 

• This week’s featured graphic highlights new survey data from The Commonwealth Fund that finds the uninsured rate for working-age adults rose to 11.2% in July 2026, up from 8.9% in 2024. 

  • The survey is an early warning that coverage losses are already beginning—it will likely be several months before federal data confirms the trend. 

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• Health system leaders at The Health Management Academy’s Fall 2026 CEO Forum discussed the policy pressures and financial realities that are forcing systems to rethink business as usual.

  • Affordability was a major theme. CEOs discussed how policymakers sometimes frame the debate around the price of a single service, not the total cost of care.

  • Limited ED and inpatient bed capacity is pushing some systems to make greater use of value-based care strategies. Mandatory CMS payment models and direct-to-employer offerings are accelerating the trend.

  • CEOs worry that stacking too many AI point solutions will make overall workflows less efficient, even if each individual use case has a positive return on investment.

  • Labor costs are pushing systems to reimagine how care is delivered, but CEOs say culture and clinician training remain major obstacles.

• HRSA named ten drugmakers and 21 high-cost drugs for its reworked 340B rebate pilot, set to launch January 1. Drugs eligible for the pilot account for less than 5.5% of 340B purchases, but a successful rollout could pave the way for a broader shift away from upfront discounts.

  • The AHA and other provider groups have once again sued to block the pilot, arguing annual administrative costs could top $1B, nearly double HRSA’s $537M estimate.

  • In other 340B news, a growing number of health systems are suing CVS, alleging the company withheld nearly $300M in 340B savings.

• Five Democratic governors asked HHS to delay the January 1 deadline for Medicaid work requirements, citing new frailty definitions and verification rules that states say they can’t implement in time.

  • Medicaid coverage losses will build gradually through 2027, with a different timeline in each state depending on the specifics of implementation.

• This week’s featured graphic tracks the recovery in health system operating margins, with new data from Strata Decision Technology.

  • After dipping below zero early in the year, the median health system margin climbed to 0.7% in June. That’s still below the 1.0%–1.5% range seen throughout much of the second half of 2025.

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In this episode of The Strategy Catalyst Dispatch, Dennis Thé, Vice President of Strategy and Business Development at Children's Health System of Texas, walks us through how the leading pediatric system in North Texas decides where to grow.

Children's Health serves about one million patients a year across two campuses and is building a $5 billion campus in partnership with UT Southwestern. Dennis explains what makes pediatric growth decisions different from adult ones, why the system evaluates growth across its full portfolio rather than site by site, how that thinking led them to move their inpatient rehab unit from Dallas to Plano and convert the freed-up capacity into NICU beds, and how community need shaped the services at the Redbird Specialty Center south of Dallas.

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• This week’s Key Market Dive looks at the landscape for musculoskeletal care, one of the largest service lines facing one of the most rapid transitions to outpatient settings.

  • Multiple forces are reshaping the market: digital MSK platforms and benefit networks capture and steer patients upstream, ASCs siphon off profitable routine procedures midstream, and PE-backed platforms consolidate the full orthopedic value chain.

  • Digital MSK leaders Hinge Health and Sword Health are expanding their platforms into GI care and behavioral health, leveraging their existing relationships with employers and health plans.

• Our featured graphic showcases data from The Health Management Academy’s 2026 AI Use Case Benchmarking Survey Report, which surveyed 52 health systems.

  • Health systems that have deployed more than a dozen AI use cases report a positive ROI in most cases where ROI can be measured, suggesting that returns hold up even as AI portfolios grow.

• Ascension is selling its ownership stake in an Arizona-based Medicaid plan called Mercy Care to Aetna for an undisclosed amount.

  • Mercy Care has massive revenues and dual-eligible enrollees, but also has a margin of less than one percent. Aetna has enough scale to take on that financial risk in an uncertain policy environment.

• Counsel Health will join CMS's ACCESS Model with Oura as its preferred wearable partner, offering no-cost chronic care to eligible Medicare beneficiaries starting in early 2027.

  • ACCESS's low rates, which many digital health companies passed on, work for Counsel because its AI-first care model is cheap to run and Oura's 5 million paid members give it low-cost patient acquisition.

Health systems are under pressure to do more with less: improve quality, strengthen revenue streams, and expand capacity while advancing toward value-based care. Doing so sustainably requires more than point solutions — it demands a deliberate organizational strategy.

Brought to you in partnership with SmartRise Health, this webinar brings together health system leaders and innovation partners to explore how organizations can lead with innovation. We'll discuss how health systems can build on the foundational pillars that support value-based care — including the imperative to improve outcomes for high-need and rising-risk populations.   

Featured Speakers: 

• Zsolt Kulcsar, DO, MPH, MBA, Vice President, Virtual Health, Emory Healthcare 

• Maria Fernanda Levis, Founder & CEO, Impactivo 

• Alessandra Taverna-Trani, MBA, Managing Director, Medicaid Team, United Hospital Fund 

Key Takeaways

1. Build capacity through value-based care. Payment models, population health data and community partnerships make it possible to reach high-need and rising-risk patients earlier.​

2. Get more from what you already fund. Deeper adoption and shared criteria raise the return on current programs before new ones are added.​

3. Fund for the long term. Braided grant, philanthropic, payer and operating dollars carry programs from a first pilot to standard care.​

4. Scale on shared infrastructure. AI in daily workflows and connected clinical and community data extend programs to every care setting.​

5. Lead through people and partnerships. Change management leaders, new workforce roles and trusted community organizations carry each step from pilot to practice.​

Review the recording and download the PDF to learn more.

Brought to you by SmartRise Health & Health Impact Alliance. Questions? Reach out to the Health Impact Alliance team at HealthImpactAlliance@hmacademy.com

As health systems move from isolated AI pilots to enterprise deployment, leaders need a disciplined way to govern, evaluate and scale solutions across clinical and operational settings.

In this webinar, leaders from Montefiore Health System share their approach to establishing AI governance amid competing stakeholder priorities and growing demand for AI-enabled capabilities. Speakers discuss how Montefiore's AI journey has evolved and how AI solutions are evaluated — including capabilities from existing third-party partner platforms and when internal development makes sense. Panelists also discuss how they determine where AI agents can deliver value across the organization.

Through clinical and operational case studies, the panel outlines a repeatable governance framework by sharing the role of AI agents in redesigned workflows and learnings from deployment. Attendees will leave with practical guidance for assessing impact through hard financial measures as well as patient, clinician, and employee experience outcomes.

A second outpatient migration is underway, as surgery and infusion leave the hospital outpatient department for freestanding sites that don’t earn HOPD rates. This shift is driven less by clinical advances than by who pays and who owns the site: physicians with ASC equity pull surgical cases, and payer site-of-care policies pull infusions. Health systems compete for that volume against independent physicians, payer-owned sites, and well-capitalized national platforms. Every case moved early gives up hospital revenue, and every case moved late may end up somewhere else.

In this member-led session, Strategy Catalyst leaders are joined by executives from Baptist Health, ChristianaCare, and Ochsner Health, who share how they’re competing for the surgical and infusion volume leaving the HOPD.

Member Speakers:

• Phil Gaby, Executive Director of Surgical Service Lines, Baptist Health

• Douglas Azar, Senior Vice President, Growth & Strategic Partnerships, ChristianaCare

• Emily Lawrence, VP of Cancer Service Line and Precision Medicine, Ochsner Health

• Neil Hunter, System Director of Sterile Drug Compounding Operations, Ochsner Health

The Executive Insights Hub is THMA's dedicated research and data center, built to keep industry teams current on healthcare market trends and health system CXO priorities. In this orientation, we walk through everything your membership unlocks — the specific deliverables, tools, and services at your disposal — so you and your team can get the most out of your access.

Logged-in members have access to the full orientation and can start exploring everything their membership unlocks.