About Jeffrey Sachs: Dr. Jeffrey A. Sachs is Chief Executive Officer and Founder of the Sachs Policy Group (SPG), which recently joined Ankura Consulting Group. SPG/Ankura is a consulting firm that advises health care leaders on the direction of health care policy in the United States. SPG’s expertise is in information analysis and strategic guidance, providing leaders with unique, personalized strategies to achieve success in a fast-changing health care environment. SPG also provides guidance to the health tech start up community working with over 50 tech enabled health care companies.
About Michael Meng: Michael Meng is the Chief Executive Officer and Co-Founder of Stellar Health. Michael has invested in healthcare companies for the past decade and has years of experience working in the field. Prior to Stellar Health, Michael was a Principal at Apax Partners, a large-cap global private equity firm where he deployed C$3bn of capital. He has served on the board of companies including Vyaire Medical, Medicomp, One Call Care Management, and TriZetto. In addition, he also serves on the board of the CUNY School of Public Health and Global Language Project. He received his bachelor’s degree from the University of Michigan and his MBA from Wharton.
The CBO estimates OBBBA and other changes in the law will leave nearly 16 million people uninsured, including many current Medicaid and Essential Plan beneficiaries. How do you see this reshaping the health care landscape?
This is undoubtedly a significant shift Jeff, and it will reshape the entire healthcare ecosystem. When you consider nearly 16 million people potentially losing coverage, it represents a substantial challenge. For Medicaid health plan leaders, this means a direct contraction of their member base, requiring them to manage costs even more diligently while striving for strong member outcomes with fewer resources. For frontline primary care providers, especially at Federally Qualified Health Centers (FQHCs) (with whom we often work) and other primary care groups that serve vulnerable populations, this translates directly into increased uncompensated care and reduced patient volumes. This will certainly test their financial stability. The landscape has the potential to become leaner, demanding a sharper focus on efficiency, outcomes, and clearly demonstrating the value of every single interaction to sustain operations and continue delivering essential care. This situation makes the transition to value-based care not just an option, but a critical strategic imperative for every stakeholder in healthcare
The law imposes new limits on state financing mechanisms, which may significantly impact state budgets for health care, nutrition assistance, and other programs that previously received enhanced federal funding. What do you see are the downstream effects, and what can be done to mitigate them?
It’s a good question Mike. OBBBA significantly curtails the use of provider taxes and state-directed payment arrangements, which have long underpinned Medicaid financing in many states. The law’s Medicaid provisions amount to nearly $1 trillion in cuts over the next decade, creating severe fiscal pressure for state budgets. States may be forced to make difficult decisions across eligibility thresholds, provider rates, and social programs. To soften the impact, proactive strategies are essential such as leveraging new funding sources, particularly the $50 billion Rural Health Transformation Fund, to aid modernization and care access.
OBBBA includes several administrative changes to Medicaid, including more frequent eligibility checks and new work requirements. What role can technology play in helping patients stay covered or connected to care?
I like this question Jeff because of the stakes surrounding the answer. More frequent eligibility checks and new work requirements can be considerable hurdles for patients; many of whom are already vulnerable and might find the processes complex. Increasingly, tech-enabled solutions will not merely be a convenience; they are a vital tool for connection and efficient patient care delivery. We need to leverage platforms that can proactively manage chronic conditions, streamline necessary documentation, and automate follow-ups. Imagine a system that can trigger an alert directly within a primary care physician’s workflow, notifying them a patient is due for redetermination or needs assistance with new work requirements.
Increased resources are needed now more than ever, but the value of that support is multiplied tenfold by effective patient navigation. Primary care teams are the critical force behind this multiplier effect. This is an area we focus on at Stellar because we believe the best way we can help is by strengthening the capability of those on the front lines, ensuring they can seamlessly guide patients to the essential services they require.
With the law allocating $50 billion to a Rural Health Transformation Fund and coverage loss expected to disproportionately affect low-income and non-citizen populations, what role can digital health play in expanding access and preventing gaps in care for vulnerable and underserved communities?
….Digital health can extend care to hard-to-reach populations by supporting telehealth, remote patient monitoring, and patient and provider engagement tools. These technologies reduce travel burdens, help patients maintain continuity of care even during coverage disruptions, and improve navigation of re-enrollment and benefit processes. The $50 billion Rural Health Transformation Fund can mitigate the impact on rural populations and allows states to use funding for new and emerging technologies. This will help rural providers build out new infrastructure and launch programs to mitigate coverage loss and maintain access to care.
OBBBA includes significant reductions in federal Medicaid spending that is anticipated to create financial pressure on hospitals and other providers. What challenges does this pose for provider engagement in value-based care models?
The financial pressure on providers from OBBBA’s Medicaid spending reductions will certainly challenge their engagement in value-based care (VBC) models. Many providers, facing immediate financial stability concerns, may understandably prioritize traditional fee-for-service volumes to maintain operations. This creates a difficult environment for securing the necessary buy-in and resources for VBC adoption, as the upfront investments and perceived risks can seem less appealing amidst revenue uncertainty.
While overall funding is critical, the immediate sustainability of high-quality care depends on cash flow. This is why we all have a stake in making sure providers who are doing the right thing receive payments early and often. Overcoming the funding shortfall demands a collective effort to bring more money upfront to the front lines. Enhanced operational and financial solvency of primary care practices would consequentially reduce the likelihood of providers discontinuing care for patients facing disruptions in their insurance status due to these policy developments.
Let me ask another question: How can we make a compelling case for continued investment in innovation given shrinking Medicaid budgets and uncertain federal support?
From my point of view Jeff, innovation, strategically applied, isn’t an expense line item; it’s the core engine for system adaptability and long-term solvency. We must highlight the immense, often hidden, “cost of inaction”—the escalating expenses of chronic disease management, avoidable emergency room visits, and administrative churn that without innovation, will only continue to balloon, far exceeding any initial investment in transformative solutions. Innovation is how we build the next generation of Medicaid, one that’s fundamentally more resilient, efficient, and equitable.
If you could advise CMS or state policymakers today, what would you recommend to balance cost containment with innovation and equity?
I would recommend focusing on sustaining Medicaid’s reach and impact by investing in digital solutions that reduce costs and improve access, such as virtual care, streamlined eligibility systems, and community-based navigation tools. Aligning these innovations with value-based payment models and reinvesting savings into underserved communities can help states manage budget pressures without compromising equity.
What partnerships across industry are most important in the post-OBBBA landscape, whether with payors, states, CBOs, or other start-ups?
In this post-OBBBA world, the idea of any single entity going it alone is a non-starter. We absolutely need deep alignment with payors, especially Medicaid health plan leaders; they’re the ones navigating the new fiscal realities and member outcomes. Then there are the providers, particularly primary care groups and FQHCs, who are right on the front lines delivering care—they need unwavering support. We can’t afford to leave any provider behind—especially not FQHCs, the very foundation of care for many vulnerable populations. There is an immediate need to fully anchor FQHCs within the VBC ecosystem.
We also can’t overlook genuine collaboration with states to ensure policies align with practical delivery. Critically, we need to collectively forge stronger ties with Community-Based Organizations (CBOs). They understand the social fabric and can address needs that go beyond the clinic walls. Finally, thoughtful engagement with other innovative start-ups helps us piece together holistic solutions that simplify complexity across the entire system. It’s about creating a living, breathing ecosystem where shared goals and complementary strengths drive us forward, not just individual efforts.
