Bridging Policy and Opportunity: Navigating Healthcare's Shifting Landscape
The healthcare industry stands at a critical inflection point. As policy priorities evolve and budget constraints intensify, organizations that view disruption as opportunity—rather than threat—will thrive. The coming years will fundamentally reshape how we deliver, finance, and access care, creating unprecedented opportunities to build sustainable business models while improving affordability, access, and equity.
Understanding the Shifting Terrain
Healthcare policy is entering a period of significant flux. Federal debates around Medicaid funding, Medicare Advantage regulations, and ACA subsidies will cascade through the entire system.[1] States are asserting their own priorities, from telehealth expansion to price transparency requirements and PBM regulations, with significant variation in how they approach coverage and eligibility.[2] Local health departments are redefining healthcare in their communities, focusing on upstream factors traditional clinical settings have overlooked.
Budget pressures are intensifying everywhere. Public programs face growing populations with constrained resources, while proposals for per capita caps and changes to federal matching rates could shift substantial costs to states.[3] Commercial payers navigate medical cost trends that continue to outpace general inflation. Providers are squeezed between rising operational costs and stagnant reimbursement. These financial realities force every stakeholder to reconsider how value is created and measured.
Organizations that succeed will develop sophisticated understanding of these interconnected dynamics, tracking not just federal regulations but state experimentation and local initiatives. Today's pilot in one state could become tomorrow's national standard.
Social Determinants of Health: From Buzzword to Business Imperative
Social determinants of health have moved from academic discussions to strategic planning centers. Recent research demonstrates that SDOH factors are linked to significantly higher healthcare costs and payer expenditures, with social and non-clinical factors accounting for 80-90% of patient outcomes.[4] Organizations integrating SDOH into core operations aren't checking boxes—they're building more effective, cost-efficient care models.
The federal government has signaled clear priorities with the 2023 U.S. Playbook to Address Social Determinants of Health and enhanced CMS guidance on addressing social drivers of health.[5] Leading organizations are demonstrating what's possible:
Addressing Housing Instability: Kaiser Permanente has launched medical-legal partnerships across seven regions, embedding legal services within healthcare to prevent evictions and preserve housing stability.[6] Since 2021, these partnerships have provided housing-related legal help to 1,600 Kaiser members and their families—66% of whom are people of color—while preventing nearly 10,000 evictions in their communities.[7] Kaiser has also committed $400 million through its Thriving Communities Fund to build or preserve 30,000 affordable housing units by 2030.[8]
Reducing Emergency Department Overutilization: Memorial Hermann Health System in Houston deployed bilingual community health workers as patient navigators in the ED to connect medically underserved patients with primary care medical homes and support services.[9] The program reduced preventable ED visits and generated cost savings that exceeded implementation costs. Similarly, Allegheny Health Network implemented ED-based social workers who use predictive analytics to identify low-acuity patients and connect them in real-time with community-based organizations, food resources, and appropriate providers.[10]
Tackling Food Insecurity: Geisinger's Fresh Food Farmacy "prescribes" healthy food to food-insecure diabetic patients, providing enough groceries for two meals per day, five days per week for the entire household, combined with diabetes education and dietitian consultations.[11] The program has served over 2,500 patients and provided 3 million meals since 2016, demonstrating significant improvements in HbA1c levels, blood pressure, and cholesterol control.[12]
These examples require understanding local resources and gaps, building trust with community partners, and developing cross-sector impact metrics. Organizations succeeding in this space improve health outcomes while reducing total cost of care in ways that create sustainable competitive advantages.
The Pharmacy Cost Crisis: Innovation Required
Pharmacy costs represent one of healthcare's most vexing challenges. Specialty medications now account for approximately 51% of total pharmacy spending, despite being used by less than 2% of the population.[13] By 2027, projections suggest specialty drugs will account for 56% of employers' total drug spend, with per member per year specialty costs reaching $1,641 in 2024.[14] The explosive growth—from 10 specialty drugs in 1990 to over 300 currently, with 75% of drugs in development now classified as specialty—is transforming the financial landscape.[15]
Traditional cost-containment approaches—formulary restrictions, prior authorizations, step therapy—are reaching their limits, creating barriers to necessary care without fundamentally bending the cost curve. Organizations are experimenting with genuinely new approaches:
Building In-House Capabilities: Hospitals and health systems now operate 27% of accredited specialty pharmacies—up from 15% in 2017.[16] These organizations are bringing specialty pharmacy services in-house to capture margin, improve care coordination, and better manage high-cost therapies. Self-insured health systems increasingly steer prescriptions to their own pharmacies, allowing them to participate directly in programs like 340B and reduce reliance on PBM intermediaries. Yet, changes are afoot for 340B that stand to diminish the benefits of this strategy for some organizations.
Direct Sourcing Models: Some health systems are exploring direct relationships with manufacturers to reduce costs and improve supply chain reliability. Organizations like Intermountain Health have expanded specialty pharmacy operations, including automated fulfillment centers that can process prescriptions more efficiently while maintaining tight integration with clinical care teams.[17]
There's also enormous opportunity in prevention and early intervention. Organizations are using predictive analytics to identify high-risk individuals before conditions escalate, deploying health coaches and community health workers, and creating support systems that reduce medication dependency rather than simply managing it more efficiently.
Access and Equity: Design Principles, Not Afterthoughts
True access means being able to actually receive appropriate care when and where needed. True equity means outcomes don't vary systematically based on race, ethnicity, income, or geography. Despite recognition of these issues for decades, the 2024 Commonwealth Fund State Health Disparities Report found profound racial and ethnic disparities persist across all states, with Black and American Indian/Alaska Native populations experiencing worse outcomes across more than half of measured indicators.[18]
These are increasingly concrete requirements from regulators, payers, and patients. Organizations committed to access and equity are rethinking every aspect of operations: locations, hours, service delivery models, language access, digital literacy support, and cultural competency. They're analyzing their own data to identify disparities and holding themselves accountable for measurable improvement.
The business case is clear. Health disparities account for between $421 billion and $451 billion in excess medical expenditures, lost labor productivity, and premature death for racial and ethnic minorities alone.[19] As payment models shift toward population health and value-based arrangements—with CMS targeting 2030 for significant transition to accountable care models—organizations serving only the healthiest patients will struggle.[20] The ability to effectively reach and serve high-risk, historically marginalized populations becomes a competitive differentiator.
The Innovation Imperative
The convergence of policy evolution, budget pressure, and heightened expectations creates challenges—but this complexity creates opportunity for organizations willing to think differently.
Healthcare organizations that succeed over the next decade won't simply execute the current playbook more efficiently. They'll question fundamental assumptions about how, where, and by whom care should be delivered. They'll embrace technology as a genuine enabler of new care models. They'll build unlikely partnerships. They'll measure success not just in quarterly earnings but in their ability to demonstrably improve health outcomes while reducing total costs for defined populations.
This moment demands leaders who recognize that financial sustainability increasingly depends on genuinely solving the affordability, access, and equity challenges that have plagued the system for decades. These objectives aren't in tension—they're increasingly aligned.
Organizations that understand the shifting policy landscape and build innovative responses won't just survive the coming transformation. They'll help define it, creating new standards for effective, equitable, affordable healthcare while building businesses that thrive by delivering on that promise.
References
Kaiser Family Foundation. "Medicaid: What to Watch in 2024." KFF, April 2025.
Kaiser Family Foundation. "50-State Medicaid Budget Survey FY 2024-2025." KFF, October 2024.
Grantmakers In Health. "Overview of Potential Medicaid Changes in 2025 Budget Reconciliation Bill." February 2025.
Mohan G, Gaskin D. "Social determinants of health and US health care expenditures by insurer." JAMA Network Open, October 2024.
Domestic Policy Council Office of Science and Technology Policy. "The U.S. Playbook to Address Social Determinants of Health." White House, November 2023.
Kaiser Permanente. "Expanding Support for Housing Stability." Kaiser Permanente, 2024.
Kaiser Permanente. "Housing Help Brings Stability to Patients' Lives." Kaiser Permanente, April 2023.
Advisory Board. "Why affordable housing is becoming a priority for hospitals." March 2024.
Reducing Preventable Emergency Department Utilization and Costs by Using Community Health Workers as Patient Navigators. PMC, 2014.
Highmark Health. "Appropriate ED Utilization Leading to Better Care Coordination." American Journal of Managed Care, March 2022.
Geisinger. "Fresh Food Farmacy: Our Purpose." 2024.
Geisinger. "Fresh Food Farmacy: Frequently Asked Questions." 2024.
Evernorth. "Specialty Drug Trends, Costs, and Utilization in the US." 2024.
Pharmaceutical Strategies Group. "2025 State of Specialty Spend and Trend Report." August 2025.
MedCity News. "Managing the Specialty Drug Cost Challenge: Is Your Pharmacy Benefits Strategy Ready for 2025?" November 2024.
Drug Channels Institute. "The Top 15 Specialty Pharmacies of 2024: How PBMs, Health Systems, and Independents Are Shaping the Market." 2024.
ABC4 Utah. "Intermountain Health's new Pharmacy Fulfillment Center will save time and money." November 2024.
Radley DC, Shah A, Collins SR, Powe NR, Zephyrin LC. "Advancing Racial Equity in U.S. Health Care: The Commonwealth Fund 2024 State Health Disparities Report." Commonwealth Fund, April 2024.
Definitive Healthcare. "Health Equity is a Top Priority for Providers in 2024." 2024.
Holland & Knight. "Key Value-Based Care Developments to Watch in 2024." March 2024.