By Jackson Murphy

After a year defined by Steward Health Care’s bankruptcy, healthcare news did not slow down in 2025. Familiar stories evolved, adding dimension to how we think about persistent challenges. New issues emerged, such as policy changes enacted by the federal government.

Issues Management Group’s healthcare practice helped organizations across the Northeast communicate through these developments. We picked up a few observations on some of the year’s biggest healthcare stories along the way.

Let’s dive in.

Reimbursement negotiations are playing out more in public. Rising healthcare costs and dire provider finances explain why.

The paradox of rising healthcare costs and worsening financial strains at hospitals has been an intractable issue for years.

Family health insurance premiums in Massachusetts are the highest in the country, according to the Health Policy Commission (HPC). Many people are forced to choose between getting care or paying bills, eventually needing more expensive medical attention when their conditions worsen. Health insurers, aware of the affordability concerns and contending with their own financial challenges, are trying to stem cost growth through reimbursement rates they negotiate with hospitals and medical groups in their networks.

Meanwhile, healthcare providers are grappling with dire finances. Sixteen of 22 health systems in Massachusetts reported negative operating margins in Fiscal Year (FY) 2024. Clinicians must contend with overcrowded hospitals, workforce shortages, delays in discharging patients, and administrative burdens that pull them away from treating patients. All of this contributes to a negative bottom line and affects how patients can access care.

This tension has long been a topic of discussion, but it took on a new form through the increasingly public contract negotiations we saw between health insurers and providers in 2025. Reporters are paying attention. Stories about these negotiations are becoming more prevalent because they so neatly capture the broader issue looming over our healthcare environment. Patients, already dealing with rising costs of living, are left wondering if they’ll need to change their doctors or health plans too.

That’s not to say all of this is unsolvable.

Governor Maura Healey and the Massachusetts Division of Insurance recently eliminated prior authorizations for many oft-needed healthcare services to remove administrative hurdles for providers, stem wasteful costs, and make it easier for patients to get care. While announcing these reforms, Insurance Commissioner Michael Caljouw credited payors, providers, and many other stakeholders for their collaboration to address this challenge. The Healey administration also created a Health Care Affordability Working Group with representatives from all parts of the healthcare system to propose more solutions for reducing costs in 2026.

On top of these issues, further Medicaid cuts await

The One Big Beautiful Bill Act will have ripple effects on everyone in our healthcare system. Massachusetts officials last year predicted that expiring Affordable Care Act subsidies and new Medicaid eligibility requirements could cause 300,000 residents to lose their health insurance.

Healthcare providers, already facing well-documented financial and operational pressures, will be forced to make tough decisions about what services they’ll maintain when critical Medicaid revenue drops. It was particularly painful to see a hospital in Los Angeles telling The New York Times it may need to eliminate a wound care center that helps patients with diabetes avoid amputations. While essential for public health, preventive services like that are reimbursed at lower rates than surgical procedures.

Safety net hospitals and community health centers – bedrocks of our healthcare system – are especially at risk because they serve higher proportions of patients insured by government programs. Patients will still need care when access to services shrinks, causing concern over even longer waits when people try to get a doctor’s appointment or go to the hospital. Here in Massachusetts, we’re fortunate that MassHealth – the state’s Medicaid program – is well-practiced in all-out efforts to help as many people as possible maintain their coverage. The Healey Administration also announced plans in early January to mitigate rising ACA premiums for residents through $250 million from the state’s Commonwealth Care Trust Fund.  

Conversations about regional healthcare planning are becoming more prevalent  

As Massachusetts tries to rein in costs while preserving access to care, we are hearing more about the need for thoughtful planning in how to use and distribute healthcare resources. This was a point of emphasis during the 2025 Cost Trends Hearing, particularly with regards to duplicative services across the state.

Health systems are already putting these plans into action. Mass General Brigham is proposing a consolidation of the burn units at its flagship academic medical centers, stating that volume for severe burn care is declining. Some at Brigham and Women’s Hospital oppose moving this service to Mass General, illustrating the challenges that come with regional planning work.

Massachusetts appears ready to act on primary care

In December a state-appointed task force recommended that Massachusetts require providers and insurers to double their spending on primary care over the next five years. The Commonwealth has long been in a primary care crisis, where new patients in Boston are waiting an average of 40 days for an appointment. Reimbursements for primary care are typically less than specialties, contributing to a dwindling workforce. There are not enough primary care physicians entering the profession to keep pace with those retiring or leaving their practice due to burnout.

Heightened patient demand, lower comparative pay, exhausting administrative responsibilities, and fewer clinicians in our healthcare system’s first line of defense is a problem for public health. Although the Baker administration proposed a similar investment in primary care (albeit on a more aggressive timeframe), COVID-19 disrupted that momentum. The Steward crisis came after that. The good news is that state legislators have expressed an eagerness to take up primary care legislation in 2026.

Looking ahead

Healthcare in 2026 is already off to a busy start. While plenty of challenges are in store, there is much to look forward to in the year ahead (including the return of “The Pitt”). We’re grateful to partner with organizations tackling healthcare’s thorniest issues in their missions to preserve and improve care for their communities.