This is a preview of the August 28 edition of Access Health—Tap here to get this newsletter delivered straight to your inbox.
Happy Labor Day Weekend! For me, this holiday brings a much-anticipated trip to the lake with loved ones—and I hope it brings rest and relaxation for you, too.
But before we clock out to enjoy the last few days of summer, let’s reflect on the reason for the season. Labor Day recognizes workers’ contributions to America’s “strength, prosperity and well-being,” according to the U.S. Department of Labor.
In order to be strong, prosperous and well, we need health care workers—as reflected in the most recent data from the National Center for Health Workforce Analysis (NCHWA). The health care industry employed 17 million people in 2023, topping the charts as the largest employment sector in the U.S.
Still, it’s no secret that the health care workforce is struggling. NCHWA predicts that by 2037, the country will be short 187,130 full-time equivalent physicians. In rural areas, the gap between supply and demand will be worse.
The greatest puzzle of the health care workforce shortage is that we can’t just hire our way out of it. The U.S. population is rapidly aging and will require more services in the coming years than we’re currently equipped to provide.
While there’s no way to prevent the incoming crisis, there are some things that health systems can do to cushion the blow. And they’re doing them. In the past several months, I’ve covered health care high schools that aim to start training the next generation early; a new medical school that is waiving tuition; virtual care initiatives that can extend the reach of a single physician across state lines; and AI tools that are working alongside (and in some cases, independent of) clinicians to lighten their load.
There is a lot to be hopeful about. But when I spoke to physicians about this topic in the spring, they pointed to a place where we could still do better.
Dr. Harry Severance, a member of the board of directors at Duke University School of Medicine’s Collaborative Cardiovascular Society and Research Network and a member of the Tennessee Medical Association’s wellbeing committee, told me that physicians will not remain in jobs where they do not feel respected. For many, the corporatization of the health care system has reduced their sense of agency. The current payer model has put checks and balances on hard-earned medical knowledge that many doctors find excessive. The administrative burden has contributed to record-high levels of burnout.
“You can recruit people in, but after a while—especially younger, more flexible people—they’re going to turn around and leave,” Severance told me. “Why should they put up with all this abuse when they’ve got alternatives?”
I’ll leave you with a quote from Dr. Laura Jett, a retired family medicine physician, who shared her reflections on the profession with me earlier this year.
“I’ve had time to think about what it means to be a doctor,” Jett said. “What is the service? What do we do with our lives? Nothing but work.
“It’s a tremendous offering,” she continued. “It’s devalued a lot. The mechanization or the industrialization of the medical practices, the delivery of health care, diminishes that sense of feeling like you’re valued. ”
In Other News
Major health care headlines from the week
- Eighty-three percent of physician informatics officers have reported expanded responsibilities over the past two years, according to a new survey from WittKieffer—the largest of its kind. I spoke with the report’s authors, CMIOs and CNIOs to understand how the role is shifting and what that means for health systems. Click here for the scoop.
- The House Committee on Energy and Commerce plans to host a hearing on AI use and integration in the nation’s health systems, examining how the new technology is improving care delivery for patients and providers. The event will take place on Wednesday, September 3 at 10:15 a.m. EST and will be livestreamed on the committee’s website.
- The American Medical Association (AMA) is pushing back against CMS’ proposed Medicare physician payment rule for 2026, calling it “flawed” and “faulty.” Specifically, the AMA raised concerns about CMS’ proposed 2.5 percent cut to work relative-value units (RVUs) and physician intraservice time for most services, which would affect more than 95 percent of the services doctors provide,according to an analysis by the professional organization.The AMA also said that CMS’ proposed reduction in practice-expense RVUs could drop overall physician payment by seven percent at certain facilities,including hospitals and ambulatory surgical centers.CMS is accepting comments on the proposed rule now through September 12. You can submit a public comment here (more than 4,400 comments had been received at the time of writing on Wednesday).
- Workers at HCA Healthcare’s Sunrise Hospital & Medical Center held an informational picket on Monday, alleging that the health care giant has allowed understaffing and turnover that perpetuates burnout amidst “skyrocketing CEO compensation.” The Las Vegas hospital workers, represented by SEIU Local 1107, said “the CEO made more in a single day than most workers made in an entire year.” HCA CEO Samuel Hagen made nearly $23.8 million in 2024, according to SEC filings reviewed by the Nevada Current.
Pulse Check
Executive perspectives on key industry issues
Merriam-Webster doesn’t release their “word of the year” until December, but if I had to bet on one, it would be “tariff.”
President Donald Trump and his administration have been clear about their goal to shift manufacturing to the United States from overseas, placing tariffs on other countries’ exports and sparking negotiations with a handful.
It has been less clear, however, how these plans could impact the health care industry.
That’s why I spoke with Jeff DiLullo, CEO of Philips North America, for this week’s Pulse Check feature. Philips announced a $150 million investment in U.S. manufacturing, research and development this month: including the expansion of its Reedsville, Pennsylvania, manufacturing facility, which produces AI-enabled ultrasounds systems.
I asked DiLullo about the timing of this announcement, exploring how Trump’s “America First” policies could impact U.S. health care systems. Below, find a portion of our conversation:
Editor’s Note: Responses have been lightly edited for length and clarity.
What is it about this moment that inspired the $150 million commitment to U.S. manufacturing, research and development? Why now?
I’ll take you on a very quick journey. Number one, [during] the first Trump administration, we saw localization was needing to be more of a thing, right? It was just very clear. So we started things in motion way back then, eight or so years ago.
Now, if you can think back that far, the pandemic had a pretty sizable impact across the industry, our supply chain. You saw health care systems really struggling to get supplies, and so all of us sort of had this massive wake up moment that we needed to be much more local in our sourcing. That takes time in an FDA-cleared environment, so we’ve been working toward these things for years.
I do think the current administration, their focus on investment in the U.S., their desire to get manufacturing back here, makes it very easy to reduce some hurdles, to get back into a larger [U.S.-based] footprint that we want to have.
Why now? The U.S. health care market is growing. The cost of health care is growing at twice the pace of inflation. So that’s not good, but this is a growing health care market, the most [rapidly] growing market in the world in terms of health care delivery as a percentage of per capita [spending]. So we absolutely want to be growing here. And we want to invest and make sure we have more agile, shorter supply chains, easier response to customers and the health systems we serve. That’s why we’re doubling down here.
You mentioned that the current administration has reduced some of those hurdles to expansion in the United States. What are those hurdles, specifically?
First of all, I want to applaud the administration and recognize what they’re doing to try and reshape balance of trade. I think that has been a major point of the administration from day one, and we support that effort to do it. Practically speaking, this medtech business is largely a U.S. industry. About 70 percent of manufacturing, broadly speaking, across our industry, is done here in the U.S. About 90-plus percent of the research and development is in the U.S.
We’re not quite that way [at Philips]. Our roots are in in the Netherlands, but we’ve continued to grow and invest and expand here in the U.S., as we’ve seen this as a market. So the industry itself, is very much an American industry, and I think we’re already accomplishing many things the administration wants to do. We’re doubling down where the growth is. Investment is key, and I think the more you can invest, the more likely it is to be able to grow your business here in what I would consider a reasonably-friendly regulatory environment, very specific on the FDA side of that regulation, I’m just talking in terms of the ability to move quickly.
For example, we wanted to get this facility up and running in six months. Nobody thought we could do it [because of] the bureaucracy at the state level and some of the construction. We sat and talked with our partners, Congressman Dr. John Joyce, Senator Dave McCormick, other local officials that were instrumental in helping us move the paperwork and [have] the ability to get all the approvals we need so that we can construct. We got it done in the time we said—actually under budget, under time—and now we have a new facility in Reedsville that’s shipping U.S.-made product to the U.S. and across the globe. That’s how we clear barriers. We partner with the folks that want to help us get rid of the non-value added work and helps us speed the production.
One of the concerns I’ve heard coming out of other industries as they look to move more manufacturing to the United States is that prices could go up as a result of the higher labor costs here. How are you managing costs at Philips and in the med tech industry, while operating largely in the U.S.?
That’s partly true, if everything stays the same as what we’re doing today. Although, for example, at Philips, we have a huge software and AI part of our business. About 50 percent of the code that’s written today for Philips is written by AI. So we’re actually deploying capabilities within our own organization to lower our cost structure, to be able to be more competitive.
That doesn’t necessarily mean we’re taking away American jobs, but we’re putting jobs where people need to do the thought work. We’re putting jobs where people do the physical manufacturing. And I think from our standpoint, we we’re finding a way to absorb the impact of tariffs today. We’re also finding very creative ways to automate our own processes and systems so that we’re allowing people to focus on things they’re best utilized to do. So bringing manufacturing back here is only part of the discussion. It’s how else we’re taking out cost in development and coding and other things that are allowing us to put resources where we want to grow up.
Our labor rate probably does go up. That’s an isolated view of a business. And so we’re kind of taking a much more holistic view of the total value. If I’m manufacturing here, and if I can get my product sooner and get it to my customers sooner and get it installed sooner, I’m going to get paid sooner. I actually have an incentive to move faster and deliver this capability to customers faster to allow me to offset some of that potential labor cost.
Why is it so important to have these capabilities in the United States as opposed to overseas?
There are always some things that impact the ability to deliver care. Cost is continuing to go up. The fact that I can actually start to build and deploy systems in days much closer to where my customers consume the technology—that is lifesaving in just about every case. I’m actually getting lifesaving capability in the hands of health care providers much sooner and ultimately at a lower cost, as I continue to develop more electronically or digitally capable tools. And the more I can deploy in some of these virtual or digital ways, or AI-enabled workflows, I’m actually allowing people to work wherever they’re at. They can interact with radiology studies or diagnostics from their home, from their laptop.
I’m making the whole process much, much faster. I don’t have to deal with privacy laws. Everything I do is embedded here in the United States. I don’t have to deal with transatlantic privacy. I’m compliant here in the U.S. for all our cybersecurity requirements. It’s faster, much more effective, to be able to get it into the market sooner, and completely compliant with laws and regulations that we don’t have to satisfy outside of the U.S.
And the side note is, we’re the most stringent regulatory environment in the world. So if we can do it right here, we can do it anywhere.
C-Suite Shuffles
Where health care leaders are coming and going
- Mike Stuart is the new president and CEO of Blue Shield California. He most recently served as CFO for the nonprofit health plan, which has more than 6 million members.
- Allegheny Health Network, based in Pittsburgh, has named Dr. Richard Medford its chief digital information officer. Previously, he served as chief medical informatics and digital health officer at East Carolina University Health in Greenville, North Carolina. Medford will work alongside Dr. Alistair Erskine, who was named chief information digital officer of Highmark Health—Allegheny’s parent company that includes its health plan—in July.
- Peter Barton Hutt, the former FDA chief counsel widely considered the “father of modern drug law,” has joined the advisory board at NEXT Life Sciences: the company pioneering Plan A, a reversible male contraceptive.
Executive Edge
How health care leaders are managing their own health
This week, I spoke with Suzen Heeley, executive director of design and construction at Memorial Sloan Kettering Cancer Center in New York City. She’s the head designer on their new Kenneth C. Griffin Pavillion—a high-rise patient care tower that will soon be added to that famous Big Apple skyline.
Heeley described how the design of a space can influence human psychology, proactively contributing to (or detracting from) our sense of safety.
I’m cooking up a feature article on the Pavillion, which you can expect next month—but for now, here’s a sneak peek at how Heely and her team are considering nurse wellbeing in their design:
Editor’s Note: Responses have been lightly edited for length and clarity.
- “We’re really trying to use research to develop the design as opposed to just making a beautiful space, and thinking about how it can impact not just the patients, but certainly the staff as well. We want to think about them and the pressures and the stress that they’re under every day.
- “One of the things we heard [from staff], which I thought was fascinating, was that there are periods where they want to be joyful. Somebody’s getting engaged or having a baby or whatever, and they feel like they don’t have a space where they can express their emotions in that way, because patients are maybe not in a place where they feel joy. We need to create those kind of off-stage spaces for staff to be in to express those emotions, whether they’re joy or sorrow. You know, there’s a lot of emotion that happens in these spaces on a day-to-day basis. So that was really kind of the foundation of the work that we were doing. We wanted to, of course, build that into our thinking and the way we were creating the design for the space.
- “We have things like respite spaces, so places for them to have a private moment when they need it for emotional release, respite, refuge or renewal. And then we think about what those spaces could be, giving the staff the ability to control the temperature, lighting, sound if they want to play their music (or if they want to just sit and feel the quiet, they can do that). But these are spaces where staff can just step away. Unfortunately, on these nursing units, oftentimes they can’t walk away too far because they’re needed there. So we will have these respite spaces embedded in the patient units to take care of them and be there for them.”
This is a preview of the August 28 edition of Access Health—Tap here to get this newsletter delivered straight to your inbox.
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