Uncertainty Clouds Finances for Payers and Health Systems in Q2 2025

For-profit health systems faced depressed volumes* in Q2 2025, with some operators experiencing a drop in admissions; CHS reported a 0.7% year-over-year decline in same-store admissions and lowered its earnings guidance, attributing the decline to *widespread consumer uncertainty and a fall in consumer confidence1.

HCA Healthcare, in contrast, saw modest volume growth (2.3% increase in equivalent admissions), but continued to face challenges in outpatient surgeries (down 0.2%) and slower-than-expected growth in Medicaid and Medicare volumes14.

Kaiser Permanente reported strong Q2 financial results (net income of $3.3 billion, up from $2.1 billion a year earlier), but noted financial pressures from an aging population, evolving consumer expectations*, and the financial impact of the newly enacted federal budget reconciliation bill, which is expected to *reduce healthcare funding and coverage3.

The Trump administration's 'Make America Healthy Again' (MAHA) policy agenda and proposed federal budget cuts to Medicaid, Medicare, and ACA Marketplace plans created significant uncertainty for both payers and providers, prompting contract renegotiations and concerns about potential coverage losses and increased uninsured rates235.

The managed care sector experienced a slowdown in mergers and acquisitions, attributed to budget-cut uncertainty and increased regulatory scrutiny of Medicare Advantage plans; notable activity focused more on strategic partnerships and digital health acquisitions rather than traditional plan consolidations5.

Both payers and providers have started redesigning their cost structures and investing in technology and efficiency improvements to prepare for the anticipated financial impact of policy and funding changes35.

Sources:

1. https://www.healthcaredive.com/news/depressed-volumes-hounded-for-profit-providers-second-quarter-2025/757178/

2. https://fticommunications.com/2025-q2-health-insurance-payer-provider-dispute-update/

3. https://about.kaiserpermanente.org/news/kaiser-permanente-and-risant-health-q2-2025-financial-update

4. https://investor.hcahealthcare.com/news/news-details/2025/HCA-Healthcare-Reports-Second-Quarter-2025-Results/default.aspx

5. https://www.bassberry.com/news/healthcare-trends-transactions-q2-2025/