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40 health systems just gave Medicare Advantage the boot.
That’s right. In 2025 alone, 40 major hospital systems have terminated contracts with at least one Medicare Advantage plan.
The reason? It’s not pretty.
Health system CEOs are calling it what it is: a broken system that underpays hospitals while drowning them in prior authorizations, claim denials, and endless negotiations.
Ivan Mitchell from Great Plains Health didn’t mince words: these plans are diverting resources from patient care to fighting with insurers.
But here’s where it gets interesting.
A December 2025 Berkeley Research Group report just dropped a bombshell: traditional Medicare could have saved $7 billion between 2019 and 2023 if it adopted Medicare Advantage’s utilization controls.
$7 billion.
Think about that for a second.
We have hospitals saying MA underpays and overcontrols.
We have data showing traditional Medicare overspends without controls.
And we have 28 million seniors caught in the middle.
This isn’t just about reimbursement rates. It’s about a fundamental question:
Do we want healthcare that’s affordable but restrictive, or accessible but unsustainable?
Because right now, we’re failing at both.
The real tragedy? While hospitals and insurers duke it out, patients in rural areas are losing access entirely. When your local hospital drops MA plans, and you can’t afford traditional Medicare supplements, where do you go?
Maybe it’s time we stopped asking whether Medicare Advantage or traditional Medicare is better.
Maybe we should be asking why, in 2025, we still can’t figure out how to pay for healthcare without forcing hospitals to choose between financial survival and patient access.
The 40 health systems that dropped MA this year aren’t outliers.
They’re canaries in the coal mine.
♻️ Repost if Medicare payment reform can’t wait any longer
👉 Follow me, Jonathan Govette, for real-time updates on healthcare technology and business news. LinkedIn Profile: https://www.linkedin.com/in/jonathangovette/
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Author:
CEO/Co-Founder @ Oatmeal Health | AI Lung Cancer Screening | Almost Became a Doctor | Engineer | Follow to Share What I’ve Learned Along the Way
I help patients get the care they need earlier, preventing late-stage cancer.
That’s been the throughline across three companies and almost 20 years in healthcare. At ReferralMD, we fixed broken referral networks so patients didn’t fall through the cracks. At Oatmeal Health, it’s lung cancer: building the diagnostic and screening infrastructure so the 85% of cases caught too late get caught early instead.
Today as CEO of Oatmeal Health, I lead a team embedding AI into radiology workflows to turn routine lung CT scans into reimbursable cancer risk assessments. We partner with FQHCs to reach underserved communities, and with health systems and payers to make early detection economically sustainable. Think HeartFlow or Cleerly, but for lungs.
Between companies, I advised at Techstars and Plug and Play, mentoring founders building in digital health. That experience shaped how I think about what separates companies that ship from companies that stall: distribution, reimbursement, and clinical trust, not just technology.
I’m a CancerX alumnus, a 3x healthcare founder, and someone who believes the biggest problems in cancer aren’t scientific. They’re operational.
We’re hiring mission-driven builders at Oatmeal Health. If you want to work on something that matters, reach out.
When I’m not working, I’m traveling, mentoring, and keeping up with one very energetic husky. 🐾
Substack – The Oatmeal Bite:
Millions of patients get less care because of who they are, where they live, or how they look. I’m fighting to change that. CEO @OatmealHealth, a startup built for the underserved. The Oatmeal Bite: intel for clinicians, investors, and advocates.
Jonathan Govette
CEO of Oatmeal Health
Substack:
https://oatmealhealthjonathangovette.substack.com/
