than before<\/span><\/span>\u00a0<\/span><\/span><\/span><\/span><\/h3>\nLarge<\/span> to mid-sized vertically integrated healthcare enterprises are reflecting 1-3% margins<\/span>,<\/span> while stand-alone health plans are showing closer to 1% margins<\/span>,<\/span> which is not sustainable or acceptable to their stakeholders.<\/span> Despite<\/span> the top-<\/span>line growth reflected by service providers, they will see margin deterioration over the next three years<\/span> regardless of <\/span>claims that AI will <\/span>aid in margin expansion. Th<\/span>at tech<\/span>–<\/span>enabled growth<\/span> movie has been played out in the past under banners such as <\/span>a<\/span>utomation and RPA.<\/span><\/span>\u00a0<\/span><\/span><\/span><\/p>\nBigger <\/span>ain<\/span>\u2019<\/span>t<\/span> better\u2026<\/span> a lesson that <\/span>remains<\/span> unlearnt<\/span><\/span>\u00a0<\/span><\/span><\/span>\u00a0<\/span><\/span><\/span><\/span><\/h3>\nTop-line and bottom-line challenges have forced more than 50% of health plans to <\/span>acquire<\/span> non-similar businesses <\/span>such as <\/span>health systems, pharmac<\/span>ies<\/span>, <\/span>and <\/span>health services<\/span>. There ha<\/span>ve<\/span> been signs of <\/span>some successful financial integration<\/span>,<\/span> though not consistently,<\/span> but<\/span> certainly<\/span> no<\/span> evidence of success with operational integration<\/span>. <\/span>Most s<\/span>ervice providers <\/span>can <\/span>address both payer and provider <\/span>needs <\/span>independently <\/span>but have <\/span>yet to mak<\/span>e the transition to <\/span>integrated offerings to address vertical integration challenges, choosing instead to sell to legacy buyers.<\/span> It certainly does not help<\/span> that integrated healthcare enterprises continue to buy in silos, missing the benefits of integration.<\/span><\/span>\u00a0<\/span><\/span><\/span><\/span><\/p>\nEmployers will drive the next apolitical healthcare transformation<\/span><\/span>\u00a0<\/span><\/span><\/span>\u00a0<\/span><\/span><\/span>\u00a0<\/span><\/span><\/span><\/span><\/h3>\nEmployers are underwriting t<\/span>he health of ~30% of all lives in the US<\/span>,<\/span> increasingly seeking new models and channels to address the<\/span>ir employees’<\/span> shifting demographic<\/span>s<\/span> and needs globally.<\/span> Services providers <\/span>remain<\/span> on the sidelines of this marke<\/span>t, <\/span>unable to wrap their heads around this opportunity, assuming that s<\/span>ervicing ASO is servicing self-insured <\/span>employers<\/span>. The fastest and largest segment of the market is getting the cold shoulder<\/span> from most of the incumbent service providers<\/span>, allowing a new generation of service providers to take pole positions.<\/span><\/span>\u00a0<\/span><\/span><\/span><\/span><\/span><\/p>\nEquity is <\/span>not <\/span>just <\/span>nice to have\u2026<\/span> it<\/span>\u2019s<\/span> an economic imperative<\/span><\/span>\u00a0<\/span><\/span><\/span>\u00a0<\/span><\/span><\/span>\u00a0<\/span><\/span><\/span>\u00a0<\/span><\/span><\/span><\/span><\/h3>\nCMS added the Health Equity Index to Medicare Star ratings<\/span>, which<\/span> will be used in the 2027 rating calculations. So, the days of well-meaning health equity narrative<\/span>s<\/span> must now translate into action on the ground.<\/span> Consequently, service provider solutions for d<\/span>ata aggregation and analytics to address equity are <\/span>gaining <\/span>some traction, but solutions to drive sustainable and stronger impact have not seen much daylight<\/span>