HHS Recognizes Bankrupting Hospitals Is Bad Policy, The PBM-GPO Synergy Scam Unravels, NYC Hospitals Face a Massive Nurse Walkout

Hey all,

Happy Hump Day! The healthcare industry is currently suffering a collective hangover from its addiction to "financial innovation," as HHS sheepishly scraps a disastrous 340B rebate pilot and the PBM-GPO vertical integration experiment finally collapses under the weight of its own conflicts. While the suits scramble to unwind these efficient failures, 15,000 New York nurses have hit the picket lines to remind the city's wealthiest hospitals that all the "synergy" in the world doesn't count for much if there’s no one left to hang an IV bag. It appears that treating patient care like a private equity flip works great on a spreadsheet, right up until reality decides to strike back.

Enjoy the rundown! 

Jacob Brody (Co-Founder & CEO, ZorroRX)

(Bloomberg Law) HHS Reconsidering Drug Rebate Pilot Opposed by Hospitals

The Department of Health and Human Services (HHS) is negotiating to reconsider a contested 340B drug rebate pilot program, indicating plans to drop its appeal of a court order that halted the initiative. This shift effectively pauses a transition that would have required safety-net hospitals to pay full price for drugs and await rebates, a move providers argued was operationally untenable. Apparently, HHS finally realized that letting the social safety net collapse just so pharmaceutical manufacturers could make more money wasn't exactly the "service" part of their job description. Full Article

[Hunterbrook] The PBM-GPO Unbundling: Why Vertical Integration is Finally Cracking and What Comes Next

The vertical integration of Pharmacy Benefit Managers (PBMs) and Group Purchasing Organizations (GPOs) is collapsing under the weight of conflicting economic incentives, where PBMs prioritize high-rebate drugs while GPOs fundamentally seek the lowest acquisition costs. This structural misalignment has led to significant value leakage and lower provider satisfaction, driving a market shift back toward independent models that are shown to outperform their integrated counterparts by 15-25% in contract compliance. With federal regulators finally realizing that "synergy" was just a corporate euphemism for "conflict of interest," the industry is now frantically unbundling, leaving us to wonder if the consultants who sold this disaster accept returns. Full Article.

(Fierce Healthcare) New York City's largest nurse strike begins

Approximately 15,000 unionized nurses at four major New York City hospitals launched a strike Monday morning after contract negotiations regarding staffing levels and health benefits ended without a resolution. While strike notices were rescinded for 11 other facilities following successful last-minute agreements, talks collapsed at Mount Sinai, Montefiore, and NewYork-Presbyterian, leading to picket lines at what the union describes as some of the city's wealthiest institutions. This labor dispute underscores the widening gap between healthcare workers demanding stricter patient safety protocols and hospital administrations preparing for significant financial headwinds driven by looming federal funding cuts. Full Article