Insights

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• This year’s Spring CSO Forum sparked some thought-provoking debates about the future of healthcare and the changes that health systems will need to make to keep pace. Today’s newsletter highlights five big ideas from a dozen closed-door sessions:

  • AI-generated health advice might already be impacting care volumes—and raising existential questions about capital expenditures that need to pay off over decades.

  • Federal policymakers see 340B reform as a potential pay-for in behind-the-scenes negotiations with pharma lobbyists.

  • Keeping your brand name off ASCs can have surprising strategic advantages, especially for health systems expanding outside of their primary service area.

  • Health systems are giving physicians equity in ASCs—but some draw the line at employed physicians.

  • Many younger consumers don’t want a traditional primary care relationship, but alternatives like virtual-first care come with their own trade-offs.

• CVS is opening new smaller-footprint stores in urban markets that ditch the aisles of snacks and home goods in favor of a pharmacy-only model.

  • This could help the company target Medicaid and dual-eligible populations and has implications for health system 340B savings.

  • While the chain continues its focus on healthcare, the emphasis on pharmacy services could reflect a “back-to-basics” mindset as other parts of the company’s healthcare flywheel struggle.

• Amazon and Walmart both just launched weight management programs centered on GLP-1 access, but with very different strategies: Amazon integrates prescribing with its own One Medical clinics and Amazon Pharmacy delivery, while Walmart stays "asset-light" by routing patients to third-party app-based partners and just handling pharmacy fulfillment.

  • Amazon's offering is the bigger competitive threat to health systems because it directly mimics comprehensive primary care, while Walmart's approach signals a retreat from running clinics toward betting that the pharmacy counter—not the exam room—is where physical retailers can win.

• Baylor Scott & White is shutting down its Medicaid and ACA Marketplace health plans by year-end, dropping 225K members—Medicaid because Texas only awarded it a contract in Lubbock (where it has no hospitals), and Marketplace because of complexities tied to expiring enhanced federal premium tax credits.

  • The exit highlights how risky Medicaid managed care can be for regional plans: a single state procurement cycle wiped out most of its market share overnight.

  • BSW likely won't be the last small or provider-sponsored plan to retreat from the ACA Marketplace in 2027.

• CMS approved 150+ companies for its new ACCESS chronic care model (including Headspace, Verily, Whoop, and Withings), but the more telling story is who passed: only 22 of 68 publicly interested digital health companies submitted applications, suggesting the economics don't work for many.

  • The participants who joined tend to have a built-in edge—they either own hardware, are using ACCESS as a cheap Medicare distribution channel, or are restructuring their business around it—while pure-services AI players like Sword Health passed.

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In this episode of The Strategy Catalyst Dispatch, we recap the 2026 Strategy Catalyst Summit, where more than 75 strategy leaders from nearly 50 health systems spent two days working through some of the hardest questions in health system strategy right now.

Featuring perspectives from members and session facilitators at the summit, we focus on three themes: what leaders in the room said about breaking through on service line rationalization, what happened when we put strategy teams through a live scenario planning exercise and asked them to confront how prepared they actually are, and the tension between building AI governance structures and maintaining the speed to get past the pilot phase.

Watch our highlight reel from the summit here. And for more on the content referenced in this episode, read our analysis in The Strategist here and check out our Stress Test Scenario Planning Guide here.

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• CMS walked back its initial proposal for a flat MA rate increase and instead finalized a 2.48% payment bump.

  • The increase between the initial and final proposal follows a familiar pattern and highlights the strength of the payer lobby. But the reprieve might only be temporary if CMS goes forward next year with a proposed update to their risk adjustment model.

  • Reduced supplemental benefits have slowed the growth of MA relative to traditional Medicare, but the Trump administration is exploring ways to continue increasing its share, including automatic enrollment.

  • Changes to the star rating system will boost payments to plans that succeed on core clinical quality metrics, but the removal of metrics related to appeal timeliness and outcomes could let payers get away with aggressive prior authorization tactics.

• A new study in JAMA finds that AI scribes reduce clinicians’ EHR times, but a claim that they also increase the volume of visits deserves careful scrutiny.

  • Reducing EHR time can also help providers avoid workforce burnout and boost retention, which might not be captured in existing measures of AI scribe ROI.

• Anthropic has developed a new AI model called Claude Mythos with capabilities that could significantly enhance cyberattacks. The company is withholding it from public release over safety concerns.

  • Anthropic is working with major tech companies like Amazon, Apple, Google, and Microsoft to harden their systems with the help of the unreleased model. The company estimates that rival firms could develop models with similar capabilities in as little as 6 months.

  • The fragmented and custom-built software that health systems rely on could be particularly vulnerable to AI-assisted cyberattacks, and health systems could find themselves paying large sums to security vendors to reduce the risk of devastating outages.

• At a recent public meeting, MedPAC presented study findings that the association between MA penetration and all-payer margins was consistently near zero across multiple sensitivity analyses.

  • Without more granular MA-specific data, the analysis may not isolate MA's true effect on health system margins—but that won't stop it from being held up as proof that MA pays enough.

  • Health systems could push federal policymakers to make better data available, following the example of states like California and Oregon.

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• Sutter Health and Allina Health have signed a letter of intent to form a combined system with 39 hospitals and 18K aligned physicians.

  • The 1,500-mile gap between the systems raises questions about systemness and governance, but there are opportunities for synergy in technology innovation, IT, RCM, and purchasing.

  • Diversifying across state lines to form a system with national scale can help diversify policy and market risks.

• On a panel at HIMSS26, CMS administrator Mehmet Oz and other administration officials expressed interest in introducing AI agents to Medicare that could help beneficiaries find providers or select plans.

  • Seniors might not trust AI, but that might not matter if these services and recommendations are pushed on them.

  • Unlike patients, AI navigator agents might not care so much about nonprofit health systems’ brand halo. We’ve raised similar concerns in the past about navigator services for commercial plans like UnitedHealthcare’s Surest.

  • Greater use of AI to detect Medicare fraud could root out bad actors, but false positives could create operational and reputational headaches for providers and health systems inadvertently caught in the crossfire.

• More than 75 strategy team members from 49 health systems joined us at last month’s Strategy Catalyst Summit in Arlington, Va. For this edition’s Key Market Dive, we’re digging deeper into four of our favorite insights and highlights from the sessions.

  • New AI deployments are making a visible impact on key strategic challenges like physician burnout and revenue capture, but they’re also demanding an increasing share of IT and transformation budgets. Strategy teams need to take on big picture questions about governance and vendor selection and can’t simply leave this work up to their IT teams.

  • In a hands-on demo showcasing how platforms like ChatGPT and Claude can be used for strategy work, we saw a wide range of AI fluency among participants. As these tools become more and more capable, strategy teams looking to transform their systems’ AI prowess would be wise to lead by example.

  • In another session, attendees discussed how reframing service line rationalization as a distribution problem can generate more organizational buy-in and sharpen thinking.

  • Stress testing different hypothetical market and policy scenarios can help strategy teams move from a reactive mindset to a more proactive approach in their strategic planning.

• This week’s featured graphic compares responses to THMA’s annual CXO priorities survey across a variety of executive roles.

  • Compared to other roles, CSOs are less focused on revenue capture and more focused on strengthening the workforce.

  • Executives across nearly every role are increasing their focus on AI.

In this session, you’ll hear what Leading Health System CIOs and Informatics leaders discussed during our spring 2026 in-person gatherings with their peers—and we’ll share our perspective on the key themes and what they mean for industry organizations that work with them.

With CMS introducing the ACCESS and LEAD models, health systems face new opportunities to strengthen care for high-need populations—while preparing for significant financial shifts in the year ahead.

Health Impact Alliance and SmartRise Health collaborated on Tuesday, April 28th for an exclusive webinar exploring how health systems can build scalable community-based networks supported by data and technology.

Featured speakers included:

Jacquelyn Hunt of Cambia Health Solutions - former Chief Integration & Innovation Officer at Central City Concern

Katie Wunderlich of KKW Consulting - former Executive Director of the Maryland Health Services Cost Review Commission

Hope Glassberg of Decipher Health Strategies - former Chief Strategy Officer at Sun River Health, New York’s largest community health center

This interactive webinar clarifies the growth potential of these new CMS models and outlines the infrastructure and partnerships needed to position your organization for the next phase of sustainable innovation.

Key Takeaways

1. Value-Based Readiness is a nonnegotiable in 2026. Identify your readiness archetype to align resources, timelines, and risk tolerance before choosing a participation path.

2. Innovation will be necessary to scale solutions. Address the key pillars that will drive the highest impact. These include population health, quality of care, digital health & AI, and Network Management.

3. The National CLAS Standards are a critical guide. Systemize these standards as a practical framework for integrating equitable and population-based practices in LEAD and ACCESS.

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

Health system leaders are facing a federal policy environment that is moving faster than most strategic planning cycles can absorb. Site-neutral payment reform, Medicaid restructuring under HR1, and a bipartisan affordability agenda are no longer distant risks—they are actively reshaping reimbursement, service line economics, and capital planning today.

This briefing brought together policy experts from The Health Management Academy and Strategy Catalyst leadership alongside executives from Nebraska Medicine, Texas Health Resources, and CommonSpirit to decode the federal landscape and its direct implications for health system strategy. The session moves beyond headlines to examine what these shifts mean for planning cycles, payer mix, and portfolio decisions—and how peer systems are responding.

Note: Due to a technical issue, the opening segment on Affordability as a Political North Star is not included in this recording. CommonSpirit's Kevin Fleming spoke to the financial pressures bearing down on not-for-profit systems: Medicare payment rates that have grown just 5% against 14% broader inflation, over $4 billion in unpaid Medicare Advantage claims, and growing exposure from coverage lapses driven by Medicaid restructuring. The complete slide deck is available for download.

Listen to our debrief of The Health Management Academy's Spring 2026 Chief Financial Officer (CFO) Forum. In our debrief, we shared what these executives discussed with their peers, including what CFOs are working on right now.