At a very high level, the problems of the American healthcare system are:

1. The US spends a lot more money than it takes in from tax revenue, quite a bit of which is on healthcare either through government funded programs or “tax expenditures” like the tax exclusion for employer sponsored programs
2. Like most services oriented professions, healthcare is subject to Baumol’s cost disease: “There is no technological change which can make an orchestra take less time to play a symphony - service industries don’t have the same productivity improvements as manufacturing industries” yet healthcare provider salaries need to rise despite the lack of productivity gains.
3. The American public isn’t inclined to pay more taxes or reduce service consumption or pay its healthcare providers less.

CMMI which was created by the Affordable Care Act to try and engineer some other, more palatable solution to this trilemma: i.e. “test innovative payment and service delivery models to reduce program expenditures under the applicable titles while preserving or enhancing the quality of care furnished to individuals under such titles.”

It would be charitable to call its record mixed with its portfolio netting out to cost the taxpayers much more money than it has saved. A few weeks ago, former CMMI senior adviser Ankit Patel wrote an article in Out Of Pocket called How to Fix CMMI Models which I thought was very good, and I was excited to welcome him to HTN radio to talk about it.

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Tom Friedman became executive director of the North Carolina State Employee Health Plan in January 2025, covering the plan’s 775,000 active and retired members and its 55-person team managing $5.5B in spend. Friedman says the plan faced major projected deficits ($500M in 2026 and $1.4B in 2027) after years without premium or benefit changes, depleted reserves, and limited population health investment, with about 70% of members having chronic conditions. 

He describes ending the Clear Pricing Project, arguing it raised costs despite showing members are highly price sensitive. The plan is boosting independent/rural primary care via networks paid ~160% of Medicare with reduced administrative burdens and shared savings, and is using Lantern to offer select elective surgeries at $0 member cost by shifting to much lower negotiated rates; 400 surgeries were completed with ~1,900 in the pipeline. Financially, projections improved toward a ~$450–$460M positive stabilization rate next year, with plans to expand “preferred provider” incentives across services.

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This week’s Grand Roundup covers Devoted Health’s hiring signals and strategy, including 47 open roles (many clinical), a 700-clinician medical group, 200,000 encounters last year, and claims of 5,000 “AI agents,” sparking questions about productivity and a potential path toward a virtual, national Kaiser-like model. The discussion then shifts to torts and product liability, using McPherson v. Buick to frame emerging legal questions for AI in healthcare, including red-teaming of Doctronic and a PVO lawsuit over an allegedly missed finding, plus concerns about liability shifting onto primary care in access-style models. They also review Medicare Advantage’s cost debate (MedPAC’s 14% higher estimate), political scrutiny, possible market “creative destruction,” and rate-notice dynamics (skin substitutes, chart review delinking). Finally, they touch on Medicaid work-requirement implementation costs (Georgia), key public-market notes (Humana benefits, Agilon outliers, Surgery Partners), and private rounds (aMI Labs/Nabla, Nitra, Translucent, doula models).

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Tim Fitzpatrick, founder of Signals Group, joins to discuss innovation and value-based care (VBC) in nephrology. 

He outlines how CMMI kidney models have evolved from focusing on ESRD hospitalizations (CEC) to home dialysis and transplant incentives (ETC) and now earlier-stage CKD transitions (KCC), citing reported improvements like higher optimal starts, home dialysis use, and preemptive transplants, while noting open questions on cost effectiveness.

The conversation covers the growing landscape of kidney VBC operators beyond DaVita and Fresenius, the levers they use to manage total cost of care (care coordination, addressing social needs, avoiding hospitalizations), and early consolidation among providers. 

They discuss why the US lags in home dialysis, DaVita’s investment in home care (Elara), and how the dialysis bundled payment system may stifle innovation and the key areas to watch in policy and kidney drug development. 

The three part series on value-based kidney from Signals FS care can be found here: 
- Part 1: https://media.signalsfs.com/p/the-current-landscape-of-value-based
- Part 2: https://media.signalsfs.com/p/the-current-landscape-of-value-based-26d
- Part 3: https://media.signalsfs.com/p/the-current-landscape-of-value-based-1d4
- DaVita’s investment in Elara: https://media.signalsfs.com/p/brief-davitas-investment-in-elara

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Any conversation about value-based care in pediatric populations would be incomplete without talking about children with high medical complexity.

The reality of caring for children with high medical complexity and the barriers their families face is under-discussed, and so is the hard problem of financing their care– it’s 6% of the population and 40% of the spend according to this note from the Children’s Hospital Association, and of that 40%, roughly half is on skilled nursing. It’s also important to keep in mind that ~50% of children’s healthcare is paid for through Medicaid and CHIP.

An interesting approach to delivering high quality care for these children is Prescribed Pediatric Extended Care, also known as PPEC. To talk about the unique challenges that high medical complexity kids face, the care they need, and his company’s approach to meeting those needs, we’re welcoming Jeffrey Soffen, CEO of Spark Pediatrics.

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The episode covers a busy Monday in healthcare and markets: 

• Universal Health Services announced it will acquire Talkspace to expand outpatient behavioral health and virtual care, raising questions about Talkspace’s largely non‑W2 therapist model and the modest premium paid. 
• Hims and Hers and Novo Nordisk unexpectedly reengaged after a broken partnership and lawsuit, with Hims curtailing compounded GLP‑1 advertising, Novo dropping its lawsuit, and Novo products expected on the platform, boosting Hims’ stock. 
• Wiley’s AI-focused earnings call and partnership with OpenEvidence (including equity)
• CMS action against Elevance over risk-adjustment submissions via encrypted USB drives
• Hospital operators’ revenue growth driven mostly by price and coding intensity
• Idaho legislation targeting a freestanding ER’s heavy use of the No Surprises Act IDR process
• Private-market deals for FindHelp and Greater Good Health
• The collapse of New Mountain’s planned “Thoreau” spinout
• Operational and financing challenges of scaling cell and gene therapies.

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A little noticed aspect of the bipartisan PBM reform bill is strengthening of the “any willing pharmacy” provisions of Medicare. To talk about what “any willing pharmacy” means in practice, why it was included in the PBM reform bill, and broader discussion on medically integrated dispensing and the policy environment, we’re joined by two pharmacist-leaders at House Rx: Denali Cahoon, Chief Pharmacy & Operations Officer, and Tamiko Yamatani, VP, Client Operations.

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In this episode of Health Tech Nerd Radio, Kevin speaks with Bruce Greenstein, the Secretary of the Louisiana Department of Health, and Will Shrank, the Co-Founder and CEO of Aradigm, about how state Medicaid programs are preparing for the coming wave of cell and gene therapies.

The conversation covers state and federal roles, innovative payment models (including Louisiana’s earlier “Netflix model” for Hep C), operational challenges for providers and manufacturers, and the need for ecosystem-level public-private partnerships while warning against other payers shifting risk onto Medicaid.

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In this episode, Justin Mares, CEO of Truemed, discusses why preventative care is widely supported but hard to finance due to limited ROI data compared to pharmaceuticals. He explains TruMed’s mission and business model: infrastructure that helps qualified individuals use tax-free HSA/FSA dollars for evidence-backed lifestyle interventions—such as fitness, sleep products, and medically tailored programs—through partnerships with merchants like Eight Sleep, Peloton, Lifetime Fitness, and Garmin, plus a direct-to-consumer eligibility flow.

The conversation covers how TruMed decides what qualifies (clinical evidence in reputable journals), the role of letters of medical necessity via a compliant telemedicine process, and the goal of building a more “formulary-like” system for prescribing lifestyle interventions based on biomarkers and outcomes tracking.

Justin also addresses criticisms that HSAs favor higher earners, argue for prevention as a tool to reduce chronic disease costs, and compare U.S. healthcare incentives with Singapore’s Medisave approach, emphasizing that fixing lifestyle and environmental drivers of chronic disease is essential.

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After spending about as much time on the State of the Union as the President spent on health care in the speech, Kevin and Martin talked about a busy week in the health care public markets including some analyst skepticism around Humana’s 2026 margin guidance and MA MLR dynamics; Hims financial results and burgeoning investor distrust; and GoodRx’s role as a pharma channel.

They touch on Option Care’s Stelara biosimilar-driven margin compression, Fresenius’s improving value-based kidney care amid regulatory headwinds, and VBC updates from Agilon, Evolent, Privia, Clover, and Alignment, focusing on recontracting and risk transfer. 

Plus, UHS price-driven growth, skepticism about AI ROI, an Allina–Innovaccer/Story Health cardiology partnership, and rising attention to 340B financing and HHS’s rebate pilot.

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