The Strategy Catalyst Dispatch

As the Trump administration continues its tariff agenda, health systems are grappling with a new wave of disruption, spanning medical goods, supplies, capital infrastructure, and the pharmaceutical pipeline. In this episode of The Dispatch, hear from Jerome Pagani, Executive Director of Strategy Catalyst, who breaks down what this means for health systems, along with supply chain and procurement experts assessing the front-line impacts and how systems are recalibrating. 

From vendor negotiations and procurement triage to capital planning and pharmaceutical risk, this episode is a must-listen for strategy leaders confronting pricing volatility and policy unpredictability. 

Leaders featured in this episode: 

• Ginger Sharp, VP and Chief Supply Chain Officer, Legacy Health 
• Harold Dillow, VP of Supply Chain Management, TriHealth 
• James Bouchard, Partner, LogicSource 

*This podcast was recorded on June 27th. Recent tariffs developments have included: 

• 200% Tariffs Threatened on Pharmaceuticals with a 12–18 month grace period 
• 50% Tariff on Copper Takes Effect August 1 
• 30% Tariffs on EU and Mexico Set for August 1 
• 25-35% Tariffs on APIs from India and China 

Key Takeaways: 

• Product origin opacity and hidden fees are complicating procurement. Experts described how vendors are unable or unwilling to identify where products are manufactured, sometimes offering blended tariff surcharges. Some suppliers are embedding tariff-related costs in invoices without transparency as general price increases, while some automated EDI systems are missing new charges. 
• Centralized monitoring and concierge triage are helping manage uncertainty. Legacy Health created a supply chain help desk to track vendor notifications, vet price increases, and escalate questionable charges. Leveraging GPO protections is essential to cost containment. 
• Stockpiling can be useful but must be targeted. TriHealth emphasized that any inventory build-up must be aligned with real demand. Buying excess or accepting bulk deals without volume alignment can backfire, especially as the future of tariff policy remains uncertain. 
• Tougher negotiation and vendor consolidation are essential strategies, and smart supplier vetting is a must. Health systems can gain from playing hardball and rejecting tariff-related hikes outright or delaying them to wait out policy volatility. Some systems are consolidating spend with key suppliers to gain more leverage and greater absorption of tariff costs. For alternative vendors, health systems should examine supplier history, delivery reliability, and ability to meet clinical standards. Flexible, short-term contracts are preferred to maintain agility as policy continues to shift. 
• Capital rescoping and domestic sourcing are emerging tactics Leaders are reassessing building specs to reduce reliance on tariff-exposed materials. When possible, they are exploring alternative materials and localized sourcing strategies to mitigate cost spikes in construction projects. 
• Drug tariffs could deepen shortages and cause higher prices, particularly for generics. With 80% of U.S. generics finished abroad and APIs sourced globally, new duties on inputs from China and India pose significant disruption risk. Experts warn of quality degradation, rising prices, and limited reshoring feasibility. 

This episode covers the Trump administration's rollout of reciprocal tariffs on 60 trading partners, followed by a 90-day pause after market turmoil, with health systems anticipating significant supply cost increases despite pharmaceuticals being initially exempted. The episode also discusses insights from a health strategy leadership forum, CMS's 5.1% Medicare Advantage rate increase for 2026, and UnitedHealth Group shareholders dropping a proposal for annual reporting on prior authorization practices.

Health systems are increasingly turning to virtual second opinions (VSOs) as a strategic lever to extend global reach, differentiate in competitive markets, and unlock long-term value. In this episode of The Strategy Catalyst Dispatch, we speak with Jarrett Fowler, Senior Director of Strategic and International Initiatives at NCHL and leader of USCIPP, a consortium supporting over 60 U.S. hospitals with international patient programs.

Anika Rasheed, Senior Analyst, and Jerome Pagani, Executive Director of Strategy Catalyst, unpack the insights Jarrett shares on the rise of international and domestic VSO programs. From identifying high-opportunity regions and specialties to navigating legal barriers and building scalable infrastructure, this episode offers a roadmap for CSOs evaluating where VSOs fit into their enterprise strategy. The conversation also explores emerging best practices for physician engagement, partnerships, and aligning VSO models with system strengths.

Key Takeaways

• High-Growth Global Markets for Virtual Second Opinions: Health systems are seeing demand from regions including the UAE, Saudi Arabia, China, and Latin America, where patients are mobile, well-resourced, and actively seeking U.S.-based specialty care. Specialties with the strongest international appeal include oncology, pediatrics, and neurology, with virtual second opinions often serving as the entry point for long-term referral relationships and brand recognition abroad.
• Legal and Regulatory Considerations for International Expansion: Successful programs address key compliance concerns early—such as cross-border data sharing, physician licensure, and patient privacy. Partnering with a local treating physician not only helps health systems navigate legal constraints but also supports clinical continuity for patients who return home after receiving care in the U.S.
• Building Scalable VSO Programs Through Strategic Partnerships: Collaborations with in-country providers, embassies, or ministries of health reduce regulatory risk and improve operational efficiency. USCIPP supports systems in forming these relationships and provides access to legal analyses and benchmarking to guide safe and strategic expansion.
• Domestic VSO Programs: Physician Buy-In and Infrastructure Readiness: Health systems are designing VSO programs around existing clinical strengths, using strategies like asynchronous consults, subspecialty case matching, and identifying “VSO champions” to increase physician participation. Programs must also manage licensure complexities and reimbursement uncertainty—most systems still operate with self-pay or employer-sponsored models, though payer interest is growing.
• Rethinking ROI—VSOs as a Brand and Access Strategy: While in-person conversion rates vary, many systems view VSOs as a long-term investment in brand equity, access, and global reputation. For CSOs, success isn’t just about direct revenue—it’s about market positioning, clinical outreach, and strategic alignment with enterprise goals.

This episode covers the merger between hospital-at-home operators Dispatch Health and Medically Home, which combines health system and payer-oriented products but raises questions about the combined company's loyalties and financial sustainability. The episode also discusses Stanford Health's partnership with midwife provider ULA to expand into Connecticut, private equity consolidation in intellectual and developmental disability services, and OptumRx's shift to cost-based pharmacy reimbursement as a potential PR move amid regulatory pressure.

This episode covers insights from the Strategy Catalyst Summit (Feb 2025), covering direct-to-employer healthcare partnerships, Washington policy shifts under Trump, cybersecurity threats, and urgent care strategies for improving payer mix. The episode also discusses Novo Nordisk and Eli Lilly's direct-to-consumer GLP-1 delivery platforms, conservative estimates of $1.1 trillion in Medicaid improper payments over the past decade, and UnitedHealth Group's legal victory against DOJ allegations of $2 billion in Medicare Advantage overpayments.