Large and small employers are bracing for what looks to be the sharpest increase in healthcare costs in more than two decades. The cost per worker is projected to go up an average of 11% next year, or somewhat lower if workers’ insurance benefits are reduced, according to a U.S. survey released Wednesday.
The employers’ final costs, after they make changes to health plans, are still expected to increase about 8% next year, the steepest since 2003, according to Marsh, the benefits consultant formerly known as Mercer.
More than a third of the 1,800 employers surveyed said they anticipated that costs would rise at least 10% after making cuts.
“This year was a rough year, and next year looks like it will be even rougher,” Beth Umland, director of employer research for health and benefits at Marsh, said in an interview.
The Marsh survey is the latest report by an employer group or benefit consultant predicting a sharp rise in healthcare costs next year. Many Americans, even those with insurance, are already struggling to afford care, according to various surveys, and healthcare has become a top issue for voters.
“This seems to be a new normal,” said Ellen Kelsay, the CEO of Business Group on Health, which represents large employers that offer health benefits.
From 2018 to 2027, healthcare costs could increase 76%, roughly twice the rate of general inflation, according to a survey the employer group released last month. For next year, companies predicted a 9.2% median increase, which fell to 8% after they made benefit changes.
The cost of providing coverage to employees is becoming an existential business issue, said Mike Pasterick, an executive at insurance broker Aon, which issued its own projection last month. Aon estimated employers’ costs would rise 9.5% next year, pushing the average cost per employee above $19,000 if no changes are made. “This is impacting the companies in a very material way,” he said.
The upshot is that about 160 million people under 65 who rely on employers for health insurance will again confront higher costs and shoulder more of the burden. More and more, workers are facing year-over-year increases that further stress household budgets already dealing with the growing expenses of groceries and gasoline.
Workers are facing higher premiums, deductibles and copays, which require them to carry a larger share of their medical bills. Some companies are cutting benefits by discontinuing coverage of expensive GLP-1 drugs to treat obesity, or dropping coverage for spouses who have other insurance options.
Employers and benefits consultants cited a number of factors contributing to higher costs: rising prices for hospital care and prescription drugs, including expensive medicines for cancer, and robust demand for GLP-1 drugs to treat conditions like diabetes.
But they also pointed to new contributors like hospitals’ and doctors’ use of artificial intelligence to increase payments through better documentation of care. They also blamed increasing reimbursements to some doctors who are out of network and are exploiting a new consumer protection law that allows them to challenge what they were originally paid.
The pressure by hospitals and doctors to charge employers even more is likely to intensify with looming cuts to government plans like Medicaid, the federal-state program for low-income individuals. Hospital groups are already seeing an increase in the number of patients who don’t have insurance or can’t pay their bills, and many are expected to charge employers more to help make up for lost revenue.
Many employees are already being asked to pay significantly more of their medical bills. Workers are paying an average of 10% more in out-of-pocket costs in 2026 — some $2,167 — than they were last year, Aon estimated.
These kinds of increases are not sustainable, said Rosa Novo, the benefits administrator for Miami-Dade County Public Schools, which covers about 45,000 employees and their families. “It’s become really, really difficult, extremely difficult,” she said. The bulk of the system’s costs are for hospital care, she said, but among the fastest-growing expenses are pharmacy costs.
For the first time, the school system is exploring new ways of delivering care. “We’re having to reinvent the way we operate,” Novo said. The system is considering contracting directly with hospitals and doctors for some of its employees’ care, like imaging, rather than relying on its insurer to negotiate for it. The system is also starting to demand more visibility into what it pays for care, requiring audits and detailed information about claims.
“I personally see a readiness to do things differently,” said Elizabeth Mitchell, the CEO of the Purchaser Business Group on Health, which represents employers. She said employers were more interested in seeing more information from insurers about how they were spending their money and consideration of alternatives.
“It’s more than just talk,” she said, saying many companies are revisiting their arrangements with their insurer or pharmacy benefit manager.
Like the Miami-Dade school system, many companies are in discussions directly with local hospital groups or other organization to provide care outside their traditional insurance plans. Others are contemplating ways to steer patients to select hospitals or doctors, either by charging them less to see those providers or limiting where employees can get care.
“We’re seeing a lot of employers taking a closer look at the network,” said Eric Miller, a vice president at Segal, another benefits consultant, despite concerns that employees will be upset if they can’t see their longtime doctor or go to the hospital of their choice.
“Unequivocally, there is more openness to change and disruption than there ever has been,” he said.
Smaller employers may be making the most significant changes, said Shawn Gremminger, the CEO of the National Alliance of Healthcare Purchaser Coalitions, many of whose members are smaller companies.
“I think it’s the smaller market where the pain is most acute,” he said.
While some are considering moves like offering employees a fixed amount of money to pay for a plan, others are taking a close look at the giant companies that sell them insurance or pharmacy benefit management. In the alliance’s most recent survey, 54% of employers said they were working with one of the three largest pharmacy benefit managers, a drop from 63% the year before. Many said they were moving to one of the smaller pharmacy benefit managers, many of which promise more transparency about how they operate and what they pay for drugs.
“We may be seeing a tipping point,” Gremminger said.
The University of Pennsylvania Health System had $337 million in operating profit in fiscal 2026, up from $247 million the year before, the Philadelphia nonprofit reported to bond investors Friday.
“We saw good growth in several of our clinical programs that helped us to generate the operating performance,” Julia Puchtler, the health system’s chief financial officer, said in an interview.
That’s money “we’re going to be able to reinvest in the academic missions and in our clinical programs and our workforce,” she said.
Here are more details:
Revenue: Penn’s total revenue rose 13.7%, to $13.6 billion from $12 billion the year before. Revenue from patient care accounted for $11.4 billion of the total in fiscal 2026, according to Penn’s report to bondholders.
Outpatient cancer care and outpatient surgeries by urologists and ear, nose, and throat doctors stood out as areas of growth, Puchtler said. On the inpatient side, neurosciences and transplants had notable increases, she said.
Expenses: For the first time since 2021, the average length of time a patient spent in the hospital fell below 6 days. Longer stays have higher expenses, even though hospitals generally don’t get paid more for them.
The average in fiscal 2026 was 5.93 days, from 6.14 days the year before. That looks like a small decline, but it adds up when spread over the health system’s more than 161,000 admissions in the year. The reduction helped Penn reduce expenses relative to revenue. It also freed capacity for more patients, Puchtler said.
In employee benefits, Penn had an additional $20 million in expenses because it aligned retirement plans across the system, Puchtler said.
Notable: Penn refinanced about $300 million in debt last month at a lower interest rate. That means the health system will save $28 million in interest payments over the next 9 or 10 years, Puchtler said.
Reed E. Pyeritz, 78, of Radnor, pioneering medical geneticist, cofounder of the Marfan Foundation and the American College of Medical Genetics and Genomics, professor emeritus of medicine and genetics at the University of Pennsylvania, author, mentor, veteran, and nationally ranked masters triathlete, died Monday, Aug. 10, of interstitial lung disease at Bryn Mawr Hospital.
Dr. Pyeritz was a trailblazing expert on the diagnosis and treatment of Marfan syndrome and other inherited cardiovascular disorders. His 44 years of research and clinical work, from 1978 to 2022, advanced the understanding and management of the diseases, and extended the life expectancy of Marfan patients by 30 years.
“So many of us in the community owe Reed so much,” Bert Medina, board chair of the Marfan Foundation, said in a tribute. “His legacy lives on in all of us, thanks to his dedication.”
In an online tribute, a relative of former patients said: “Without this amazing doctor, I wouldn’t have my sister or dad. He changed the world for Marfan patients and their families.”
Dr. Pyeritz joined the faculty at Penn in 2001 and spent more than 20 years treating patients, teaching students, doing landmark studies on the value and social implications of genetic testing, and championing patient-centered care. He was codirector of Penn’s research center on hereditary hemorrhagic telangiectasia, onetime chair of the faculty senate, and a fellow at the College of Physicians of Philadelphia and other medical associations.
His “vision and scholarship fundamentally transformed the care of patients,” Nimesh D. Desai, director of the Penn Aorta Center, said on X.
Before Penn, Dr. Pyeritz spent nine years in Pittsburgh with what is now the Allegheny Health Network and 17 years at the Johns Hopkins University School of Medicine in Baltimore. In 1991, his team at Hopkins discovered that mutations in the FBN1 gene cause Marfan syndrome and followed up with new regimens to treat it.
He cofounded the Marfan Foundation in 1981 and the American College of Medical Genetics and Genomics in 1991. “It became clear that folks with Marfan syndrome could benefit by an organization that allowed them to communicate [and] to stimulate other physicians to become involved,” he said in a 2018 video interview.
This story and photos about Dr. Pyeritz appeared in the Pittsburgh Post-Gazette in 1994.Newspapers.com
Colleagues, friends, and former patients called him “a phenomenal physician,”“a guiding light,” and “an extraordinarily reassuring presence” in online tributes. In 2018, he said: “The most gratifying thing is the fact that folks [with Marfan syndrome] are living their normal life expectancy.”
Dianna Milewicz, chair of the John Ritter Foundation advisory board, noted his “excellence in clinical care, teaching, and research” on Facebook. Michael L. Weamer, president and CEO of the Marfan Foundation, called him “a true hero” and said his “impact on our community is immeasurable.”
He served 13 years in the Army Reserve Medical Corps and earned lifetime achievement awards from the Marfan Foundation, the American College of Medical Genetics and Genomics, and other groups.
Dr. Pyeritz and his wife, Jane Tumpson, married in 1972.Courtesy of the family
On weekends, he did marathons and triathlons, and was part of a world record 100-man, 100-mile relay. His family said in a tribute: “He measured a successful life less by titles or awards than by what one gives, what one learns, whom one loves, and what one leaves behind in others.”
Reed Edwin Pyeritz was born Nov. 2, 1947, in Pittsburgh. He was fascinated by science and space as a boy, and he built rockets in his backyard and performed scientific experiments in his bedroom.
He earned a bachelor’s degree in chemistry at the University of Delaware in 1968, a master’s degree and doctorate in biological chemistry at Harvard University in 1972, and his medical degree at Harvard in 1975.
He met Jane Tumpson in first grade, and they graduated together from Mount Lebanon High School near Pittsburgh in 1965. They reconnected on the tennis court a few years later, married in 1972, and had daughters Allyson and Abigail.
Dr. Pyeritz, left in the top photo and right in the bottom photo, enjoyed time with his family.Courtesy of the family
Dr. Pyeritz and his wife honeymooned on Mount Kilimanjaro in Africa and traveled the world together for years. In April, the whole family went to Spain.
He liked to wear bow ties, build stone walls, watch the news, and spend time outside with his dogs. He followed the Pittsburgh pro sports teams closely and enjoyed Manhattans and chocolate milkshakes.
“I will miss it all,” he told colleagues at Cure HHT when he retired a few years ago. “But I am certainly looking forward to spending time with my two granddaughters, Tallulah and Penelope.”
His daughters said: “Ever an adventurer, he instilled in us the importance of making the most of every day, watching the sunrise or sunset, and cherishing the time you have.”
His wife said: “He loved without exception and reservation.”
In addition to his wife, daughters, and granddaughters, Dr. Pyeritz is survived by son-in-law Keith Hopkins and other relatives. A brother died earlier.
A celebration of his life is to be held later.
Donations in his name may be made to the Marfan Foundation, 22 Manhasset Ave., Port Washington, N.Y. 11050.
Dr. Pyeritz “loved without exception and reservation,” his wife said.Courtesy of the family
Maleka Evans waited outside Octapharma Plasma in South Jersey at 8:30 on a recent sweltering morning, sweat beading on her face. A dozen other prospective donors had arrived before her, and the line was still growing a half hour before doors opened.
One woman sat on an overturned shopping cart pilfered from the nearby Walmart. Another brought her own folding chair. A man held a bicycle tire, removed to protect his bike from being stolen once he was inside and hooked up to a machine that extracts antibody-rich blood plasma needed for medical treatments.
Every Monday and Friday for the last three years, Evans has trekked to the Audubon strip mall for what she considers her second job. She takes a 45-minute bus ride from her Willingboro home to Camden, then walks another 45 minutes to the donation site with a slogan posted in its window: “When it pays to give hope. That’s plasmagic.”
The 37-year-old single mom has noticed the lines growing in the last year, as others are seeing at donation sites elsewhere in the Philadelphia region and across the nation. The for-profit business is booming as more and more Americans, both poor and middle class, struggle to straddle the gap between stagnant wages and increased living costs.
Evans relies on the $50 that she typically earns for each plasma donation — loaded onto a prepaid debit card — to help with bills that she cannot cover with her $18-per-hour job packing boxes at a warehouse.
“Prices for everything — food, rent, transportation, electricity — are just getting higher and higher,” Evans said. “You have to work two jobs to make ends meet, and you’re still living paycheck to paycheck.”
An increasing number of people in the Philadelphia region are selling their blood plasma for money. Here, local donors sit in recliners with needles in their arms at B Positive Plasma in Montgomery County.Jose F. Moreno / Staff Photographer
The U.S is one of about a dozen countries where it is legal to pay donors for plasma. It is among only three countries where people are allowed to donate two times over seven days, though not on back-to-back days, per U.S. Food and Drug Administration regulations.
Nearly 70% of the world’s plasma comes from donors in America, fueling a multibillion-dollar global industry. Plasma, a straw-colored liquid in blood, contains antibodies and other proteins used for treating a wide range of patients with immunodeficiencies, neurological conditions, kidney disease, and bleeding disorders.
Last year, U.S. donors produced 62.5 million liters of plasma — the highest volume ever collected and an 8% increase from the previous year. That trajectory has continued into this year, according to Georgetown University professor Peter Jaworski.
“When the price of most staples goes up, so does the amount of plasma donations,” Jaworski said. “If I fell on hard times, the very first thing I would do is become a regular plasma donor.”
Donating plasma is widely considered low-risk, with millions of people doing it each year without reported health problems. However, the long-term health effects of donating twice weekly for years have not been well-studied. Safety concerns raised by the deaths of two people in Canada who had recently donated at for-profit clinics run by the healthcare company Grifols haveprompted an investigation there.
In the U.S., an FDA investigation into 34 deaths of people who had donated plasma between 2016 and 2020 did not find a link between donations and fatalities.
Some donors experience lightheadedness, fatigue, bruising, bleeding, or dehydration. Drinking water and eating foods high in iron and protein can help alleviate those side effects, according to U.S. health guidance.
Security guard Danny Morales of North Philadelphia said he feels “tired” after donating. But that has not deterred him from heading to CSL Plasma in the city’s Olney neighborhood twice a week, as soon as he finishes his overnight shift at 6 a.m.
Morales can earn $520 a month donating plasma, which helps to offset rising expenses that have the 35-year-old father feeling ever more drained: The cost to fill up his Honda Civic’s gas tank jumped from $30 to $80 in the last year; a package of ground beef increased by $8; and even the brand of mac and cheese that his 8-year-old daughter and 2-year-old son enjoy costs about $1 more, he said.
“It’s just getting worse and worse,” said Morales, whose plasma donations supplement his $18 hourly security job wage. “Stuff is just getting so expensive. Groceries are ridiculous.”
CSL opens at 6 a.m., but a line starts to form around 4:30 a.m. In late July, it snaked past the building, wrapping around the corner. The sight caught the attention of nearby Olney resident Tony Reed.
“There’s always a line there, especially toward the end of the month and definitely on Monday mornings,” Reed said. “People are broke.”
Ben Ruder, CEO and founder of B Positive Plasma, and Pearl Dixon, an assistant manager and phlebotomist, explain the donor intake process. Each donor fills out an extensive health questionnaire, undergoes a medical exam, and gets a finger prick to test their blood for iron and protein levels. Jose F. Moreno / Staff Photographer
Inside the booming industry
On a recent Wednesday afternoon at B Positive Plasma in Montgomery County, a steady stream of donors checked in at kiosks in the lobby.
After filling out an extensive health history questionnaire, each new donor undergoes an on-site medical exam by a licensed practical nurse. Repeat donors must get annual exams. At each visit, a medical tech checks their vitals, including blood pressure, pulse, and temperature, and performs a finger prick to test their blood for protein and iron levels. Donors must weigh at least 110 pounds.
“We make sure they’re healthy and well,” said Ben Ruder, founder and CEO of B Positive Plasma, noting that the plasma itself is tested for HIV and hepatitis B and C before being sold.
Next, plasma donors are hooked up to a machine that draws out blood, spins off the plasma, and then returns the red blood cells back to the donor, a process that typically takes 45 minutes to an hour.
At 2 p.m., 18 of the 24 cushioned recliners at the Wyncote location on Cheltenham Avenue were occupied by donors, each with a needle in one arm. They included a Philadelphia police officer who had donated more than two dozen times since May 2025; a casino cleaner who earns $120 a week donating to support his young daughter; and a home health aide who donates twice a week to help cover his $750 monthly apartment rent.
Jason Johnson, 29, of East Mount Airy, has donated plasma 68 times at B Positive Plasma in the past two years. He makes an extra $120 a week donating twice weekly. The money helps supplement the $17.80 an hour he earns as a cleaner at Live! Casino & Hotel Philadelphia. “In the beginning, I was doing it for the extra money, but once I learned that I’m helping people out in their life, it made me want to come back even more,” Johnson said. Jose F. Moreno / Staff Photographer
Plasma donation differs from whole blood donation, a faster process that relies on unpaid volunteers who can donate only once every 56 days in the U.S.
B Positive Plasma is on track to see a record year, with 180,000 donations, peaking this holiday season, when people need extra money for gifts. Last year, the company saw 150,000 donations at about 1 liter per person.
Ruder, 42, who lives in Center City, opened his first plasma donation center in Cherry Hill in 2012 and rapidly expanded to 12 locations in New Jersey, Pennsylvania, and Delaware. He plans to open two more sites in Maryland next year and another in Allentown later this year.
B Positive Plasma, like other plasma companies, structures payments to incentivize twice-weekly donors. For instance, donors whose weight and physical health yield the maximum amount of plasma — 1,001 to 1,200 milliliters — will receive $45 for the first visit and another $90 if they return that same week. Plus, the company offered a $50 bonus for anyone who donated eight times in August.
Donyele Wilkins, 48, a phlebotomist and medical assistant, works in the donation room at the B Positive Plasma in Montgomery County. She suffers from lupus, a chronic autoimmune disease for which she receives plasma-derived infusions to control her symptoms.Jose F. Moreno / Staff Photographer
Phlebotomist Donyele Wilkins works 12-hour shifts, four days a week, at B Positive Plasma.
For Wilkins, the paycheck is not the only benefit of working there.
The 48-year-old Northeast Philadelphia resident suffers from lupus, an autoimmune disease in which the body’s immune system attacks its own tissues and organs. Wilkins said she relies on plasma-derived medication, infused through an IV every four to five months, to help control symptoms like inflammation and joint pain.
Knowing how plasma is processed makes her feel “safe,” she said. She also likes getting to know “the regulars” who donate.
“It makes me feel like I know exactly where it’s coming from, and I know the people who are doing it,” Wilkins said. “A lot of them really need the money, so they’re helping me, on top of me helping them.”
‘Blood money’
Paying donors for plasma has sparked ethical debate, with some accusing the industry of exploiting poor people.
In her 2023 book, Blood Money: The Story of Life, Death, and Profit Inside America’s Blood Industry, Kathleen McLaughlin, a Montana-based journalist, found that donors in many U.S. regions are disproportionately Black and brown people.
McLaughlin, who has a rare autoimmune disease treated withmonthly plasma-derived infusions, said today’s rise in donations is “a symptom of our broken economic system.”
While the FDA regulates health safety at plasma centers, the pay rate is set by the companies, McLaughlin found. She thinks donors should be paid more and the amount should be standardized.
“Right now, it’s a capitalist free-market system, where the pricing isn’t transparent,” McLaughlin said. “The profit margins are crazy for these plasma companies, and it’s gamified to make you donate twice a week, every week, in perpetuity.”
Jaworski, the Georgetown University professor, said donors are compensated fairly. A donor whosits for an hour and a half makes “significantly more than” New Jersey’s $15.92 minimum hourly wage and Pennsylvania’s $7.25. Plus, he stressed, donors save “hundreds of thousands of lives.”
Wallace Smith, 45, of Upper Darby, prides himself on making an honest living. He earns $15 an hour as a home health aide. He makes an extra $130 a week selling his blood plasma. The money helps cover cigarettes, rent, and his phone bill. Jose F. Moreno / Staff Photographer
Recently published research suggests that communities can benefit when a new plasma center opens, because fewer young people take out high-interest payday loans and area crime drops, mostly driven by decreases in property and drug-related offenses.
“It helps you from having to do something wrong,” plasma donor Wallace Smith said.
When Smith was in his late 20s, he got arrested for selling drugs. Now 45, he is still struggling to find a job that pays a living wage, he said.
Smith, of Upper Darby, works three days a week, earning $15 an hour, as a home health aide. He earns $130 a week donating plasma, which helps pay for cigarettes, his phone bill, and rent, he said.
Like many donors, Smith said he likes the win-win of earning extra cash and helping patients who depend on plasma.
“They say there’s a job’s out here for everybody, but when you become a person who made mistakes in life, then they look at your background, so there’s only certain jobs you can do,” Smith said as his blood flowed into a spaghetti-thin clear tube at B Positive Plasma.
“With that being said, you don’t go back to your old ways,” he said. “You find better resources like this.”
On a hot August morning, donors line up outside Octapharma Plasma in South Jersey to sell their blood plasma for money. They arrive before the doors open at 9 a.m. to beat the wait. Donor Carl Davis, 56, of Camden, donates every Saturday and Monday, earning $70 each time. The extra money helps supplement his $900 monthly Social Security Income disability check. “I get SSI disability, but it’s not enough at all to pay my bills and buy food,” Davis said.Wendy Ruderman
Beach boardwalk fun
At Octapharma Plasma in South Jersey, the wait time can be as long as three hours, donors said. When a sewer pump broke and bathrooms stopped working earlier this year, the company trucked in a row of porta-potties to accommodate donors and staff.
On a recent August morning, Brittany Barr, 36, and her three sons — 5-year-old twins and a 6-year-old — waited outside Octapharma as her husband donated. The family had walked roughly two miles from their Gloucester City home.
When Barr learned her friend had kidney failure and needed plasma infusions, she wanted to help. Barr was unable to donate plasma because she is anemic, so her husband agreed to do it.
In the month since Barr’s husband started donating, the family has earned more than $500. It has helped with groceries and their phone bills to supplement her husband’s income as a shipping manager.
“With only one income, money is tight these days,” Barr said. “Everything is messed up.”
The boys, clad in their bathing suits, climbed up on Barr as she sat on a tipped-over shopping cart. They were headed next to Atlantic City for a beach day.
“This week, the money is going toward fun. They’re going to play arcades and have ice cream or whatever their little hearts desire,” Barr said. “Next week, it’s going to school supplies.”
Brittany Barr, 36, seated with her boys (from left) Cooper, Cannon, and Colton, waits outside for her husband to finish donating plasma at Octapharma Plasma in Audubon, N.J. The family from Gloucester City was next headed down the Shore, where they planned to spend the extra money earned from donating plasma on arcade games and ice cream.Wendy Ruderman / Staff
Universal Health Services Inc. has long dominated as the nation’s largest provider of behavioral health services through its network of 182 hospitals and 110 outpatient facilities.
Last week, the King of Prussia company added a new dimension, completing the acquisition of Talkspace Inc., a virtual behavioral health company, for $835 million. It was UHS’s biggest deal in 15 years.
“We look at this as a real significant moment for healthcare,” UHS CEO Marc D. Miller said in an interview Tuesday. “It’s not simply a transaction for the company, but creating something in behavioral health that hasn’t existed.”
UHS’s goal is to create what Miller described as a new mental health continuum of care — including an AI agent introduced in June with human oversight and immediate intervention by licensed clinicians for safety if needed.
Talkspace’s network of 6,000 therapists conducted 933,000 treatment sessions with patients covered by insurance or employee assistance plans in the first half of this year. It had an additional 5,000 active patients who paid directly for the service during that period, according to Talkspace’s quarterly report.
The New York-based company reported $123.4 million in revenue and a $7.8 million net loss for the first six months of 2026.
UHS’s behavioral health arm had $3.9 billion in revenue and $773 million in profit before taxes in the six months that ended June 30. Philadelphia-area facilities include Friends Hospital in Philadelphia, Horsham Clinic in Ambler, and KeyStone Center in Chester.
UHS also owns the largest behavioral health company in the United Kingdom. Including its 30 acute-care hospitals, UHS’s six-month revenue totaled $9.1 billion.
The Inquirer spoke with Miller about how Talkspace is expected to complement UHS’s current business. This interviewhas been lightly edited for length and clarity.
What made Talkspace attractive to UHS?
By acquiring Talkspace for UHS, we’re creating the industry’s first nationally scaled end-to-end connected continuum in all of behavioral healthcare. Nobody has what we now have. For example, you can go to Talkspace to get treatment on your phone through the app, access therapists wherever you are, whatever’s comfortable for you. The vast majority are patients that UHS never would have touched.
Now, they’re going to know about UHS, so it would be natural that if they need excess care after they’ve had some care with Talkspace, they’re going to immediately be referred to all of the different options that UHS offers. On the flip side, we’re now going to have this Talkspace option after somebody’s either in one of our more intensive outpatient programs or an inpatient, so we can quickly say, as part of your aftercare, you might want to go to Talkspace, which is a subsidiary of UHS.
The concept makes sense. How do you make it work?
It’ll be totally integrated. Most of the insurers that they’re contracted with we’re contracted with, so there won’t have to be huge changes. There are some different contracts, and there will certainly be some things to work out, and there are some small pockets where they’re with somebody that we’re not. But for the most part, that’s not a big concern.
As far as the referral networks, we’re just doubling what we have. So there’s the current referral networks that go into UHS. There’s the current referral networks to Talkspace that are vastly different.
We’re now going to put this together, and we’re going to kind of double up the opportunities to both companies. It’s incredibly positive.
Talkspace’s AI agent Tee has gotten attention. Why is it different from using ChatGPT or Claude like a therapist?
Tee was purpose-built for mental health. Rather than just adapting a general purpose chatbot to a clinical context, this was built for this. That’s a huge difference. This was built by mental health experts who had safety and privacy in mind, and it was designed to complement human care.
People right now are going to ChatGPT and Claude and all these things and asking them questions that are totally disconnected, totally disjointed from any care they could be getting. If they’re not getting care, they’re really relying on something that is not expert to help them in a most serious endeavor.
Editor’s note: This article has been updated to correct UHS’s revenue and profit for the six months that ended June 30.
AmeriHealth Caritas, a Medicaid insurer based in Delaware County, has agreed to invest $15 million in Deon Health, a Michigan start-up that works with states and insurers to improve care for people with intellectual and developmental disabilities, the two companies announced Friday.
Deon was founded in 2024 to work with local providers to help people with intellectual and developmental disabilities (I/DD) overcome the silos that make it hard to coordinate primary care, specialty services, behavioral health, and long-term supports needed to allow individuals to live in community settings.
“We built Deon Health to create a better way to organize care around people with I/DD, their families and the professionals who support them every day,” Sara Ratner, chief executive of Deon Health, said in a news release. “AmeriHealth Caritas brings deep Medicaid experience and shares our commitment to a model built around strong local relationships.”
Other investors in Deon include Town Hall Ventures, First Trust Capital Partners, and Difference Partners.
Independence Health Group, the parent company of Independence Blue Cross, is the majority owner of AmeriHealth Caritas. Independence’s partner in the business is Blue Cross Blue Shield of Michigan. Among the nation’s largest Medicaid insurers, AmeriHealth Caritas has contracts in 13 states and Washington D.C.
Tower Health reported an $8.5 million operating profit in the year that ended June 30, compared to a $20.6 million loss the year before.
The fiscal 2026 profit will be Tower’s first in eight years, if the result holds in its audited financial.
In the Berks County nonprofit’s preliminary financial report to bond investors Friday, Tower management called the result “an important milestone in Tower Health’s ongoing journey toward sustained financial strength.”
In addition to Pottstown, Tower owns Phoenixville Hospital and Reading Hospital in West Reading, and half of St. Christopher’s Hospital for Children in North Philadelphia in a joint venture with Drexel University.
Here are more details:
Revenue: Tower reported a 2% increase in revenue, to $2.07 billion from $2.03 billion. Reading Hospital in West Reading logged an 11% increase in revenue, while the combined revenue of Phoenixville and Pottstown Hospitals fell 8%.
Patient volumes: Pottstown saw an 11% decrease in hospital admissions, likely because Tower closed the hospital’s intensive care unit at the beginning of the this year. Phoenixville had a small gain of 0.7% in admissions, while Reading was flat. Total surgeries across the system were flat.
Notable: A year ago, Tower reported a preliminary operating profit of $5.9 million for fiscal 2025, thanks to a gain on the sale of the former Brandywine Hospital. That would have been the system’s first profit in seven years, but it turned into a $20.6 million loss in Tower’s audited financial statements. Auditors from KPMG decided that Tower needed to boost medical malpractice reserves and give up on collecting millions owed by patients.
In an email to The Inquirer, Tower CEO Michael Stern expressed confidence this year’s audit will uphold the preliminary result, giving Tower its first profitable year since 2017.
Aramark and the University of Pennsylvania Health System launched a partnership this year to offer the food service giant’s Philadelphia-area employees healthcare in a test of a new model for reducing costs.
Aramark employees who choose the benefit option, called the Penn Medicine Premier Plan, face no deductibles and lower copays when they and their dependents use Penn doctors and facilities.
The move by Aramark into what is called direct contracting comes as employers are contending with years of surging healthcare costs. It’s an example of experimentation designed to slow spending growth in spending and perhaps improve quality, experts said.
“We certainly would like to save money on the model, but its primary focus is to make benefits more affordable” by getting lower prices than it would get by going through an insurer, said James Startare, Aramark’s vice president for benefits.
The model is called direct contracting because Aramark negotiated prices and other terms of the contract directly with Penn, instead of relying on an insurer to negotiate prices.
It’s Penn’s first such contract and the first large-scale direct contract in the Philadelphia region. Aramark talked with other systemsin the area, but Penn emerged as the partnerwilling to enter into the experimental contract. Penn described the deal as a multiyear contract ultimately expected to roll over from year to year.
Aramark didn’t provide details on savings, but its goal was to negotiate prices that are lower than those it would pay though a benefits administrator, such as Aetna.
By eliminating deductibles that function as a barrier to care, the plan is expected to encourage primary care visits. Thiscould reduce long-term costs by catching patients’ health problems early.
For health systems like Penn, such contracts offer a chance to increase market share, streamline payments, and hone their ability to manage the health of a population.
The Penn Medicine Premier Plan features no deductibles and lower copays when Aramark employees and their dependents use Penn doctors and facilities. Harold Brubaker / Staff
Aramark’s move into direct contracting
Penn is Aramark’s third major direct contracting partner.
Employers, even those like Aramark that are self-insured, typically rely on an insurer’s negotiated prices.
With the new direct contract, an Aetna administrative unit still processes the claims for Aramark, and patients who go outside Penn for care use the Aetna network.
Aramark launched its first such contract in 2024 in Dallas and expanded to Chicago last year, each time getting a strong employee enrollment, though it took two years in Chicago, Startare said.
In the Philadelphia region, 35% of eligible employees (those who work 30-plus hours a week on average) have chosen the Pennplan, which took effect Jan. 1, Startare said. That amounts to 800 employees.
Employees who were moving to Aramark with the food services contract were worried about losing their Penn benefits, said Megan Lieberman, a patient services manager at Chester County Hospital who was among those who became an Aramark employee.
But the Penn Premier Plan was very similar to what they were used to. “It was definitely a huge relief to know that we got to hang on to those benefits,” Lieberman said.
A separate contract covers pediatric services at Children’s Hospital of Philadelphia for Aramark employees and their families.
Next year, Aramark plans to take direct contracting into central New Jersey, but did not name the system it’s using there.
What’s in it for Penn
The Aramark contract is an opportunity to focus on “chronic disease management, preventive care, cancer screenings, things like that” for a specific group of 1,400 patients who are motivated to stay within the Penn system, said Mark Angelo, Penn’s chief medical officer for population health.
A key goal is to reduce the deductibles, copays, and prior authorizations that can slow access to preventive care. The model is designed totake care of people before they end up in high-cost places like the emergency department or hospital, Angelo said.
Keeping more patients within Penn is expected to result in savings because of better care coordination and fewer repeated tests, Angelo said. Penn Premier plan members can seek care outside of Penn, but it will cost them more out-of-pocket.
As it is, the typical Penn patient also uses other health systems for some services, said Roy Schwartz, Penn’s vice president for payer strategy.
“Sometimes it’s the right choice, sometimes it can fragment their care,” Schwartz said. “There should be savings just simply coming from having integrated, coordinated care at a place like Penn.”
Penn does not yet have much of its own data on Aramark employees, but indications from Aramark are that the plan’s members were using more Penn services in the first six months, Schwartz said. “It was not just patients who were using Penn anyway for pretty much everything.”
Penn and Aramark officials plan to meet regularly to review results and consider modifications. “We’re hoping this works out well for everybody because we’d love to do some more of these,” Schwartz said.
Momentum behind direct contracting
Employers nationally have long contracted directly with doctors and health systems for specific procedures, like joint replacements, cancer care, and heart surgery. For years, they’ve also paid directly for primary care through on-site clinics.
Aramark’s move to an all-encompassing healthcare plan with a single providerfits into a newer trend gaining momentum nationally. Investors have created platforms like Cost Plus Wellness, Mishe Health, Nomi, and Transcarent to help health systems implement direct contracts.
Northwell Direct’s biggest contract covers 100,000 building service workers in the New York area and their dependents. Ittook effect this year and is expected to save 20% in the first year.
Big savings to start are not guaranteed.
“They may not go into it with a lower cost, but they’re going to go into it with better access, better quality for their employees, and what they’re finding is eventually those lower costs will come,” said Jenny Goins, chief of staff at the National Alliance of Healthcare Purchaser Coalitions.
The Washington nonprofit is putting together a direct contracting advisory council to help more employers to do what Aramark is doing, Goins said.
The model is not expected to replace traditional coverage anytime soon in the Philadelphia region.
“It is not for everyone, and it does take effort and coordination on the part of the employer,” said Tom Belmont, CEO of the Greater Philadelphia Business Coalition on Health. “Also, some health systems are ready for the discussion, while others are not.”
Thomas Jefferson University and Jefferson Health posted an operating loss of $181.5 million in the year that ended June 30, an improvement over last year’s $208 million loss. In both years, the loss was concentrated in Jefferson’s insurance business.
The fiscal 2026 results, reported to bondholders Friday, included $112 million in costs for layoffs and other moves designed to put the Philadelphia region’s largest health system on firmer financial ground.
Jefferson highlighted in its preliminary report to investors that results improved each quarter of fiscal 2026 — from an operating loss of $103.8 million in the first quarter to a $71.1 million operating profit in the fourth quarter.
“We’ve made significant progress strengthening Jefferson’s financial performance, yet those gains are increasingly threatened by the actions of commercial insurers in Pennsylvania,” Jefferson’s chief financial officer, Michael Harrington, said in an email.
“Despite already paying some of the lowest reimbursement rates in the nation, certain payers are now attempting to unilaterally rewrite or reinterpret existing contract terms to further reduce payments and improve their own margins at the expense of providers and the patients they serve,” he said.
Separately, Jefferson sued Aetna in April over a policy that reduces payments for hospital stays for Medicare Advantage patients that Aetna decides aren’t sick enough to qualify for full payment.
Insurers are under pressure from employers to slow healthcare expense growth. Independence said in response to the lawsuit that it acts in the best interest of its customers. Aetna said its policies comply with federal laws and regulations.
Here are more details on Jefferson’s results:
Revenue: Jefferson’s revenue reached $17.7 billion, up from $15.8 billion the year before. Fiscal 2025 included just 11 months of Lehigh Valley Health Network results. Jefferson completed that acquisition on Aug. 1, 2024, expanding its reach into Northeastern Pennsylvania and giving the nonprofit more than 30 hospitals.
Jefferson Health Plans: Jefferson’s insurance arm had a $130.3 million loss in fiscal 2026, an improvement over a $169.9 million loss the year before. The insurance arm had 415,172 members on June 30, up from 366,780 the year before. The plan is diversifying away from Medicaid as it increases enrollment in Medicare Advantage and the Affordable Care Act markets. The percentage of membership in Medicaid fell to 75% this year from 87% last year.
Notable: The fourth quarter of fiscal 2026 was Jefferson’s first profitable quarter in at least four years, according to Inquirer calculations that exclude investment income. Unlike other local health systems, Jefferson follows accounting rules for higher education, allowing it to include a portion of investment income in revenue.
Prescription drug prices recorded the biggest year-over-year drop in more than 60 years in July, a startling reduction experts chalked up to an array of factors, including more generics and discount GLP-1 weight-loss drugs.
While overall costs for medical services continued to rise, prices for medicinal drugs fell 2.7% over the 12 months ending in July, the largest annual drop on record, according to Bureau of Labor Statistics data released Wednesday. Prescription drugs, part of the medicinal drug category, fell by 3.1%, the steepest annual decline since March 1963.
The White House took credit for the good news, saying President Donald Trump’s efforts to slash drug prices were working. Some experts said a Biden-era policy that requires Medicare to negotiate prices for some popular prescription drugs is more likely to be driving down costs.
The drop in prescription drug prices is one of the few bright spots in the U.S. Consumer Price Index, which provides a snapshot of inflation. “Just what the doctor ordered!” Renaissance Macro, an investment research company, posted to X on Wednesday.
Inflation has been running high for more than five years, sparked by the economic disruptions of the coronavirus pandemic and Washington’s response to it. More recently, prices have been rising because of energy pressures fueled by the war with Iran.
Prescription drug prices, on the other hand, have slid sharply over the past six months, Renaissance Macro said, at a seasonally adjusted annual rate of 6.6% — “the sharpest six month drop on record.”
While the results are stark, teasing out the cause is complicated, independent experts said.
President Donald Trump has long pledged to bring down prescription drug prices, and the White House made the case Wednesday that the president’s pricing agreements with drug companies and a new initiative, the direct-to-consumer site TrumpRx, are responsible for the lower prices.
“No president in modern history has been able to drastically reduce prescription drug prices across the board except for President Trump,” White House spokesperson Kush Desai said in an email. “This is a direct result of the President’s willingness to push the envelope with bold policies that actually put Americans and America First.”
White House officials pointed particularly to the costs of GLP-1 weight-loss drugs, which Trump calls the “fat drug.” TrumpRx, which launched earlier this year, offers GLP-1 drugs for as low as $150 for a starting dose. And under a Medicare pilot program that the administration launched in July, drugmakers Novo Nordisk and Eli Lilly agreed to charge the government just $245 a month for their products, Wegovy, Zepbound, and Foundayo.
Monthly prices charged to insurance companies previously had topped $1,000. Trump and the drug companies began negotiating last year and announced the rough outlines of the deals in November.
“In a matter of months, we got up and running these discounts in a way that they were meaningful for American patients,” said a White House official, speaking on the condition of anonymity because administration staff are not authorized to speak publicly.
But bigger trends in the GLP-1 marketplace were already driving down prices independent of Trump’s negotiations, according to experts on drug pricing. Spotty insurance coverage for Wegovy and Zepbound for weight loss has produced enormous demand for lower consumer prices. And cheaper compounded drugs have posed genuine competition for the brand-name companies, adding even greater downward pressure.
Richard Frank, a senior fellow at the Brookings Institution and a professor emeritus of health economics at Harvard University, said he doubts Trump’s initiatives are behind the drop in drug prices.
“If I was a betting guy on what mattered most, it would be probably stuff around the Inflation Reduction Act,” Frank said, adding that Trump’s efforts “wouldn’t be where I’d place my money.”
The Inflation Reduction Act was a signature accomplishment of former President Joe Biden, a sprawling measure enacted in 2022 that aimed to lower prescription drug prices by requiring Medicare, the federal health program for the elderly, to begin negotiating the prices it pays drugmakers for an array of popular and costly prescription drugs.
The first price reductions took effect at the beginning of this year. Using 2023 prices as a benchmark, the Centers for Medicare and Medicaid Services has estimated taxpayer savings of $6 billion from that first round.
The Trump White House argues that the Inflation Reduction Act gets too much credit for lowering prices, in part because it took four years to take effect.
Stacie Dusetzina, a health policy professor at Vanderbilt University, said the Inflation Reduction Act is a more plausible contributor to the decline in prices than Trump’s initiatives.
While only 10 drugs have had their prices negotiated so far, they are commonly used ones “and their prices would likely be reflected in the prescription drug index,” she said via email. TrumpRx, on the other hand, covers “a limited number of branded drugs,” Dusetzina said, and “aside from GLP1s, they may not be high enough volume to be included.”
Dusetzina said another Trump policy — most-favored-nation pricing, which ties U.S. prices to lower ones paid abroad — could not explain the drop in prices either, “as the models that are supposed to use this form of pricing haven’t even launched.”
The Bureau of Labor Statistics category for prescription drugs does not track what drug companies charge. It tracks how much a pharmacy actually receives when it fills a prescription. That means it includes a customer’s payment at the counter plus whatever is paid by their private insurance or by Medicare Part D, the program that pays for drugs picked up from a pharmacy.
A drop in this index does not necessarily mean drugmakers have cut their prices. It can also reflect insurers and Medicare striking better deals or people switching to cheaper drugs.
Which brings up another, less glamorous source of lower prices: generics. When a brand-name drug loses patent protection, BLS waits about six months, swaps the brand in its sample for the cheaper generic and records the difference as a reduction in price.
A wave of blockbuster drugs lost exclusivity over the past year, and Dusetzina said that could be pushing the index down — “especially if the drugs were commonly filled.”
