The Government Doubles Down on Untangling Drug Costs, Vermont Proves That Re-Engineering Healthcare Is Harder Than Just Wishing for It, and Referencing Medicare Rates Becomes the New ACA Trend

Hey All,

Happy Hump Day! The healthcare landscape is currently defined by a series of ambitious pivots, as CMS more than doubles its dedicated drug-pricing staff to tackle the long-standing "dumpster fire" of sub-optimal incentive structures. While Vermont’s decade-long all-payer experiment serves as a sobering reminder that re-engineering medical economics is rarely as simple as a voluntary pilot program, new federal proposals for "non-network" plans suggest a shift toward more transparent, Medicare-tied pricing models. Whether through direct government intervention or the introduction of reference-based competition, the industry is clearly moving away from legacy "guaranteed profit" spreadsheets in a high-stakes search for actual fiscal sustainability. 

Enjoy the rundown!

Jacob Brody, Co-Founder and CEO, ZorroRX

[Endpoints News] CMS Innovation Center to Expand Staff with Focus on Drug Pricing

CMS’s Innovation Center is more than doubling the size of its drug-focused team to implement several new "most favored nation" pricing models designed to lower costs across Medicare and Medicaid. Director Abe Sutton emphasized that the expansion aims to dismantle barriers to access while specifically making high-cost cell and gene therapies more "underwritable" for participating state programs. After all, it only took a few decades of patients treating life-saving prescriptions like optional luxury items for the government to realize that the current "suboptimal" incentive structure might actually just be a dumpster fire in a lab coat.

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[VTDigger] Vermont’s health care reform experiment and its legacy.

Vermont’s ambitious eight-year "all-payer" health care experiment officially concluded at the end of 2025, leaving behind a complex legacy of high administrative costs and a failure to meet its original goals of shifting care away from hospitals toward preventive services. While the program successfully integrated some primary care reforms, it ultimately struggled with insurer opt-outs, regulatory scrutiny, and financial outcomes that often mirrored or exceeded traditional fee-for-service expenses. It turns out that fundamentally re-engineering the entire economic engine of American medicine through a "voluntary" hospital-led experiment is—shocker—slightly more complicated than just wishing for better "value" and calling it a success.

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[Modern Healthcare] 'Non-network' health plans see opportunity in ACA proposal

A proposed rule from the Centers for Medicare and Medicaid Services could open the Affordable Care Act exchanges to non-traditional, "non-network" health plans starting in 2027. These plans, promoted by companies like Sidecar Health and Imagine360, utilize reference-based pricing tied to Medicare rates rather than traditional provider contracts to offer lower premiums. It’s a terrifying new world for traditional insurers, who may finally have to trade their "guaranteed profit" spreadsheets for actual competition, all while critics wring their hands over "minor" details like patients getting stuck with the bill when the math doesn't add up and legacy carriers wondering if their decades of rent-seeking were just a beautiful, overpriced dream.

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