Becker's Healthcare December 30, 2025
As healthcare costs continue to rise and margins remain under pressure, Houston-based Memorial Hermann Health System is leaning into value-based care and direct-to-employer strategies to slow spending growth and improve outcomes.
Hospitals nationwide are facing sustained cost pressure driven by labor expenses, pharmaceutical inflation and growing demand for specialty care. At the same time, employers are seeking more predictable healthcare spending and better control over high-cost conditions, prompting health systems to explore direct-to-employer arrangements and value-based models that emphasize utilization management and outcomes.
James McCarthy, MD, executive vice president and chief physician executive of Memorial Hermann, said the system’s strategy is grounded in the financial realities facing nonprofit health systems, including rising pharmaceutical costs, coverage shifts and the unsustainable trajectory...
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