Hello, and welcome back to this week’s edition of the Gist Weekly. As always, we immensely appreciate your continued readership and invite you to forward this email to friends and colleagues—please encourage them to subscribe!
In the News
What happened in healthcare recently—and what we think about it.
- President Trump pauses most tariffs. On Wednesday, President Trump paused reciprocal tariffs on most nations for 90 days but increased tariffs on China. During this 90-day pause, countries on which Trump had previously imposed reciprocal tariff rates of up to 49% will instead face only the 10% rate that went into effect on April 5 while the administration negotiates country-by-country deals. The move comes after President Trump’s announcement on April 2 of an across-the-board 10% tariff on 90 nations, which were effective April 5 and additional, reciprocal tariffs on select nations, which took effect April 9. The tariffs have excluded pharmaceuticals, but President Trump signaled on Wednesday that he may levy tariffs on pharmaceuticals. As of Friday morning, there is currently a base tariff of 10% on most countries, a 25% tariff on Mexican and Canadian goods that do not satisfy the United States-Mexico-Canada Agreement rules of origin and an effective 145% tariff on Chinese goods.
- The Gist: Persisting back-and-forth on tariffs makes it challenging for healthcare providers to make long-term strategic decisions. Amid this economic uncertainty, Kaufman Hall observed only 5 announced health system mergers and acquisitions in the first quarter of 2025—the fewest announced in any quarter since at least 2012—while there also were hiring freezes. The tariffs have provoked anxiety among providers because medical devices are not exempted. There are a few no-regrets strategies providers can pursue during this wait-and-see period. The previous carveout for pharmaceuticals came as a sigh of relief for many providers, given the near-term havoc such a change might have on the supply chain. Even if tariffs incentivize drug makers to boost manufacturing in the United States, this transformation cannot happen overnight. Such a change would leave hospitals bearing the cost of already high drug prices and possibly lead to shortages, potentially impeding care.
- Medicaid cuts loom as House OK’s budget blueprint. Medicaid could be in for deep cuts. On Thursday, the House of Representatives adopted a Senate-approved budget resolution that would scale back spending to make President Trump’s 2017 tax cuts permanent and implement new tax cuts. The resolution, which passed the House by a 216-214 vote, would decrease federal revenues by an estimated $5.3 trillion over 10 years. To partially offset this, Congress is looking for spending reductions, including up to $880 billion under the House Energy & Commerce Committee’s purview. The budget comprises the foundation of President Trump’s initial legislative agenda. Because the bills were considered under budget reconciliation rules, the final budget will be unthreatened by the filibuster and could be passed by simple majority votes.
- The Gist: While cuts to Medicaid are not specifically called for in the budget blueprint, significant cuts would come from the House Energy and Commerce Committee. Medicare and Medicaid are the largest programs under its jurisdiction, and Trump has promised not to touch Medicare. Healthcare advocacy organizations have pleaded with lawmakers not to cut Medicaid, which provides coverage to about 1 in 5 Americans. House Speaker Mike Johnson (R-LA) has promised to target waste, fraud and abuse in Medicaid before cutting benefits; but the House GOP has explored tightening eligibility requirements and imposing work requirements on beneficiaries. Major cuts to Medicaid are considered politically risky, but may be unavoidable if the Trump administration is serious about offsetting its tax cuts with lower spending. Hospitals may need to consider new and creative sources of revenue and prepare for belt-tightening to counterbalance lost revenues from Medicaid.
- CMS announces Medicare Advantage payment rates. On Monday, the Centers for Medicare & Medicaid Services (CMS) released its finalized Medicare Advantage (MA) payment rate for 2026. Allies of plauded the 5.1% benchmark increase, which is more than double the initially proposed 2% increase. The Trump Administration also finalized rules that will make it more difficult for payers to upcode members’ sickness, which can result in higher reimbursements rates.
- The Gist: This payment rate increase is a “best-case scenario” for payers, who have faced a more challenging environment amid increased MA utilization. Rating agencies noticed that the golden age of offering health insurance was in danger and downgraded the industry’s credit outlooks earlier this year. The new payment rate breathes new life into their operations as they were hitting a profitability wall. As expected, the Trump Administration appears to be friendly towards Medicare Advantage, but the overall landscape is still a mixed bag. Dr. Mehmet Oz—who officially took the helm at CMS last Thursday—is showing there really is “a new sheriff in town” and appears to be sticking to his promise to crack down on upcoding despite pushback from payers.
Plus—what we’ve been reading.
- Chaos at NIH threatens promising cancer research. Published last weekend in The Washington Post, this piece demonstrates the impact of layoffs and spending cuts at the National Institutes of Health (NIH). The article tells the story of a 43-year-old mother of two children suffering from colorectal cancer; her new treatment appears to be at risk because of administrative delays impeding an already arduous process. NIH researchers have made a striking breakthrough in treating gastrointestinal cancers using personalized immunotherapy, successfully shrinking tumors in some patients by enhancing their own immune cells. The research is considered “remarkable” because it highlights a path to an elusive goal in medicine: harnessing a person’s own immune defenses to target common solid tumor cancers. But trials at the NIH Clinical Center, the nation’s largest research hospital, are being delayed due to layoffs and restrictions that have disrupted staffing and slowed purchasing.
- The Gist: The Trump administration’s aggressive downsizing of staff and hampering of routine activities has had an immediate, real-world effect. What appears to be a monumental step forward in cancer research is being hampered by political uncertainty, potentially delaying or even denying patients treatments that could save their lives. The NIH has long been considered a global research leader, but the instability, if prolonged, may threaten this standing if scientists perceive it as a less desirable place to work. The benefits of research come over the long term, and even a theoretically small disruption or funding cut could cascade into significant negative effects. Unfortunately, this disruption will lead to an outcome that ultimately will not make Americans healthier. For patients who hope to join a clinical trial, the chaos threatens a potential lifeline.
Graphic of the Week
A key insight illustrated in infographic form.
Cancer diagnoses among younger generations increasing
This week’s graphic highlights data from a recent study published by The Lancet on cancer incidence trends in the United States between 2000 and 2019 among those born between 1920 and 1990. Of the 34 types of cancer studied, 17 were found to have an increased incidence among those from the Generation X and Millennial cohorts. Compared to individuals in the 1955 cohort, incidence of small intestinal, thyroid, kidney and renal pelvic, and pancreatic cancers among those in the 1990 cohort was about three times higher. The incidence of those in the Generation X cohorts was also higher among these four cancers compared to the 1955 cohort’s rate. More adults are also getting diagnosed with cancer at younger ages. There were particularly stark average annual increases of pancreatic cancer incidence among adults aged 25-49 between 2000 and 2019, with the average annual increase hitting 4.34% among adults aged 25-29. Most cancer patients are not in their 20s—the median age of a cancer diagnosis is still 67—but such a stark increase in incidence among younger adults is alarming and cause for further investigation. High consumption of ultra processed foods—a target of the “Make American Healthy Again” movement—has been linked to some cancers. However, disruption at research institutions that improve cancer treatment is costly to a cohort of cancer patients that is increasingly in the prime of their lives.
This Week at Kaufman Hall
What our experts are saying about key issues in healthcare.
The recently passed House budget resolution makes it increasingly likely that significant cuts may be made to the Medicaid program. Hospital and health system leaders are extremely concerned about what the financial impact of these cuts on their organizations might be.
In a new Strategy Spotlight blog, Brian Ball, Webster Macomber and Joyjit Saha Choudhury discuss partnership strategies that hospitals and health systems can pursue with payers and other healthcare organizations to mitigate two of the most likely changes to Medicaid: heightened eligibility requirements and payment rate reductions.
On Our Podcast
The Gist Healthcare Podcast—all the headlines in healthcare policy, business, and more, in ten minutes or less every other weekday morning.
Last Monday, we heard the second part of J. Carlisle Larsen and Dr. Christian Dameff’s conversation about the takeaways from last year’s cyberattack on UnitedHealth Group’s Change Healthcare clearinghouse and legislation proposed last year to bolster cybersecurity in healthcare.
This Monday, hear JC discuss the latest healthcare news, including a new poll from Fabrizio Ward that finds broad support for Medicaid across all voters.
To stay up to date, be sure to tune in every Monday, Wednesday, and Friday morning. Subscribe on Apple, Spotify, Google, or wherever fine podcasts are available.
Thanks for reading! We’ll see you next Friday with a new edition. In the meantime, check out our Gist Weekly archive if you’d like to peruse past editions. We also have all of our recent “Graphics of the Week” available here.
Best regards,
The Gist Weekly team at Kaufman Hall
