| Happy Thursday, Hospitalogists! As is customary over the past several months, today's edition is purpose-built to get me caught up after golfing catch you guys up with all of the healthcare happenings in the month of June. It's meant to be concise, skimmable, and click-through-able. Enjoy and have a great 4th fam! Stay cool. Also...stay tuned below for a cool golf update from Boston. Was this email forwarded to you? Subscribe Here
June Recap Top Moves from June:Matt Holt bets ~$12B on Ensemble via Thoreau — largest capital commitment of the month and the clearest signal yet that RCM is where healthcare PE goes next. 200+ hospital clients on day one. New Mountain Capital apparently scrapped a past $32B deal to combine 5 portco’s involving Holt. Bon Secours still retains a 41.4% ownership stake in Ensemble as of its most recent quarterly report, and received a whopping $426.6M cash dividend in February from the investment. For context, BSMH’s operating EBITDA in Q1 was $291.8M Ensemble recapped in March 2022 - acquired by Berkshire Partners and Warbus Pincus at a $5B valuation. Then it flirted with going public late last year / early this year at a similar valuation ($13B) Announced partnership with Cohere to deploy its agentic AI infrastructure in June 2025, following up this announcement with the intention to build an RCM native LLM - will follow a similar trajectory to other large RCM names in the new AI era and rollup strategy trying to automate away FTEs for sake of margin gains and efficiency
Lilly's 340B ultimatum: Eli Lilly demanded claims data or said ‘we’re not providing discounts’, then actually followed through by month-end while Cassidy's overhaul draft gave it political cover. Ascension closes the $3.9B AmSurg buy — FTC carved 7 ASCs and waved it through. A nonprofit is now the 3rd-largest ASC operator in the country. Poster child for major capital move into nonprofit health system transformation and foray into ambulatory. This was a good overview on Ascension’s plans from here. Danaher closes $9.9B Masimo acquisition — acute care patient monitoring's crown jewel changes hands Mayo and Microsoft build a Mayo-owned frontier model — first system to own its model rather than rent one. Notable given the below. Abridge’s keynote turns heads with notable moves and endeavor into clinical intelligence layer. Also stacks a Lilly investment and an Nvidia model — the clinical intelligence layer land grab, now with pharma capital attached.
 Optum NY divestiture talks — ortho, general surgery, and urology on the block after a decade of aggregation, but most notably, purchasing Crystal Run Healthcare in 2023. Quick exit. Hospital M&A kept humming below the mega-deal line — HCA scooped 17 Carolinas urgent care clinics and launched CareNow in SC while shedding 31 home health sites to Deaconess. CHS offloaded 4 Arkansas hospitals for $110M. WVU moved on 5-hospital Independence Health, and Baystate absorbed Trinity's Mercy Medical for $293M. Only 7 of 29 Blues plans turned a 2025 profit. Regional payer margins are getting destroyed by GLP-1s, plain and simple.
CommonSpirit's $6B turnaround plan — the largest Catholic system in open triage, driving the 7-systems-shedding-hospitals wave. The health system also plans to move the entire organization onto a single EHR by 2030 and a single enterprise resource planning system by 2027. Sixty-five percent of the health system is now on Epic, with two of eight implementation waves live. So far, CommonSpirit has consolidated its EHR portfolio from 19 systems to 11 as part of the multiyear OneEHR initiative.
Centene offers buyouts to most of 61K staff — ACA membership down 54%. Total ACA enrollment down ~3-4M. Centene needs to lean up. Math. Cityblock to acquire GC-stablemate Homeward — General Catalyst consolidating its own portfolio with synergistic functions. Honorable mention:
5 Trends to Watch1. NSA/IDR conflicts went from simmer to boil. Highmark sued HaloMD (the ringleader of the IDR process) - notably, most payor suits have failed because they alleged HaloMD’s conduct was akin to fraud, which it is not - rather, the way arbitration is set up baseball-style today is terrible for healthcare (despite Cassidy thinking it’s the greatest thing since sliced bread), Arizona's AG branded MultiPlan and 8 insurers an OON "cartel," STAT’s takedown of Nutex in associated fashion to HaloMD (characterized as a hit piece by Nutex management), Elevance published data showing median IDR awards at 67.4x FFS Medicare, and the IDR operations rule finalized — all in one month. Arbitration was designed as a last resort and became a business model. Crazy how that happens in healthcare. 2. Emphasis on Fraud, Waste, and Abuse. DOJ's record $6.5B takedown, Elevance's $342M settlement wire, OIG's $462M phantom stroke codes, Matrix and others’ $56m+ settlements, and 519 hospitals staring down real price transparency fines. 3. Significant movement in membership across payor classes. ACA enrollment down ~3M (~13%), the 25-state work-requirement lawsuit challenging the implementation, Montana and Arkansas going live as of July 1, 6 carriers confirming 2027 ACA exits, Uncompensated care is coming for hospital margins next. 4. Portfolio realignment and tightening. Optum's aforementioned NY (and otherwise) divestitures, Humana selling its minority stake in Gentiva for $900M, GW handing UHS its $450M physician subsidy problem, HCA's home health exit, CHS trimming. 5. Agentic AI is crossing the clinical Rubicon. UpDoc landed the first patient-facing LLM FDA clearance, HHS pitched autonomous prescribing agents, and Mayo built its own model. Meanwhile a bipartisan House panel killed the WISeR pilot, Brailer argued AI accelerates inflation, and PwC pegged 2027 trend at a 17-year high. Capability and skepticism compounding at the same time is the defining tension in the market right now. Fundraising AnnouncementsFinally, Trase's $107M from ARCH was technically a seed round, but already automating 5,000 faxes a month at Duke cardiology. Voice and agentic AI continue to dominate fundraising rounds. Quick June Policy UpdatesDOJ's $6.5B national fraud takedown — 455 charged, record Medicaid focus. My burning question is whether the intense crackdown on fraud will deter investment in Medicaid Elevance pays CMS $342M to clear MA risk-adjustment sanctions - no challenge, just pay and move on. Notable. Matrix Medical settles in-home MA coding fraud claims for $36.5 million Meanwhile Clover beats CMS in court, forcing a mid-year star ratings rework and windfall for many Indiana caps hospital prices or strips tax exemption — most aggressive state pricing law yet Independent dispute resolution reform — regulators in Idaho and New Mexico already considering reform 519 hospitals warned on price transparency with $2M fines attached — enforcement teeth are here. DOJ forces OhioHealth to drop anti-steering clauses in payor contracts, while also including a 5-year monitor period as part of its antitrust settlement California's CPoM settlement forces Carbon Health to unwind its friendly-PC — PPM structures are now enforcement targets. Some states are cracking down big time on CPoM laws 25 Dem states sue to block Medicaid work-requirement rules Cassidy's sweeping 340B overhaul draft — rebate model, pharmacy limits, narrower patient definition Montana and Arkansas launch work requirements July 1, 18 months ahead of schedule CMS discloses the OBBB work-requirement rulebook via IFR Federal IDR operations final rule — standardized data and timelines House panel unanimously defunds the WISeR AI prior-auth pilot CMS tightens 1115 waiver budget-neutrality rules for 2027 — the actuary sign-off ends the games MedPAC backs site-neutral in its June report
June Reads and Resources
MISCELLANEOUS MADDENINGS I want to give a huge shoutout to the great folks at Glooko - Rich Glenn, Brian Harrison, and Seth Gabarro - who graciously let me tee it up along side them in a member-guest at The Country Club in Brookline MA, an incredibly history-rich golf course and a bucket list at that for me. While we didn't take home the glory, we managed to fix our healthcare system while we were out there (well, maybe diabetes management for hospitals, anyway). The course absolutely ate my lunch with fast greens, undulating fairways, and blind approaches, but scoring isn't what's important when you're at hollowed grounds like these. (I shot an 87 for what it's worth). Here were a few highlights: I learned what's in a Fernando I topped the first tee shot in front of my three playing partners and caddies (5 handicap? Yeah right!) If I ever have the incredible privilege to play the course again, I'd like to think I would play a bit better. I drove the ball decently but ended up with a few bad kicks and some terrible lies where I had to take my medicine and just wedge it out of trouble. On one hole from the Primrose course, I smacked a drive right down the middle...that cascaded down the hill...all the way into the water. Oof. That kind of day! On holes where I DID find the fairway, my wedge and approach game was simply...off. Maybe (big maybe) next time around I play a bit more conservatively and can attack the greens a bit better now that I know the layout Apart from skulling my first bunker shot, my sand play was phenomenal capped off by an awesome up and down from a deep pit with the green running away from me. Hole of the day was the Par 5 (I think #11) where I striped a tee ball with a perfect fade, then hit a ~225 yard approach 3 hybrid to just right of the green. I couldn't get up and down for the birdie but the shot was purina. A day and course I'll never ever forget and right up there at the top alongside Pebble and Pinehurst for me.
Thanks for the read! Let me know what you thought by replying back to this email. — Blake |
