Are We Getting Our Money’s Worth? Jackson Hammond on NHE, CMS Reform & Making Insurance Almost Obsolete

In Episode 123 of DC EKG, Joe Grogan sits down with Jackson Hammond (Senior Policy Analyst, Paragon Health Institute) to unpack what the latest CMS National Health Expenditure (NHE) data says about where U.S. health care is headed.

They break down the June 2025 NHE release, compare it to Jackson’s earlier “Paragon Prognosis” analysis, and explain what changed, what didn’t, and what it means for affordability, Medicare, Medicaid, and long-run fiscal pressure.

They also connect the spending outlook to Jackson’s paper, “How to Reform the CMS Innovation Center with a Choice and Competition Approach,” and debate whether CMMI is bending the cost curve or just adding bureaucracy without accountability. Jackson argues we should aim for health care so affordable you barely need insurance.

Chapters / Timestamps 00:00 – Intro + welcome 00:55 – Jackson’s background: how he got into health policy 03:39 – Focus areas: Medicare, hospitals, drug pricing, PBMs, 340B 05:14 – What the NHE report is showing 06:14 – $5.2T → $5.6T → $8.6T: why the trajectory matters 08:00 – Why health spending isn’t really “optional” 10:11 – Where the money is going: payer mix + per-enrollee costs 12:23 – Medicaid costs, provider taxes, and state financing tactics 15:58 – Medicare spending pressure and fiscal risk 21:06 – Misconception: “coverage = care” 26:18 – Why provider payments keep rising (post-COVID demand + consolidation) 33:01 – Rural care, consolidation, and the REH / hub-and-spoke model 40:08 – Drug pricing: retrospective vs prospective MFN 49:20 – 2026 outlook + closing thanks

In This Conversation • NHE 2025: what the June 2025 data confirms about spending growth and the federal share. • Rising prices, flat health: why prices climb while outcomes lag. • Medicare and Medicaid: why they remain major budget drivers. • Coverage vs access: why an insurance card doesn’t guarantee care or better health. • Hospitals and consolidation: what’s driving higher payments and fewer choices. • Rural vs urban: why patients bypass local hospitals and what a better model could look like. • Drug pricing: what MFN approaches might mean for costs and innovation. • 2026: what Jackson expects next and what reform could realistically look like.

Key Takeaways • NHE data points to continued, unsustainable spending growth. • Medicare and Medicaid drive long-term budget pressure. • Consolidation and payment incentives shape prices as much as utilization. • CMMI reform hinges on accountability, choice, and competition. • Smarter drug pricing policy should lower costs without undermining innovation.

About Our Guest Jackson Hammond is a Senior Policy Analyst at the Paragon Health Institute focused on health spending, CMS policy, and reforms centered on choice, competition, and patient-centered care. He authors Paragon’s “Paragon Prognosis” analyses and wrote “How to Reform the CMS Innovation Center with a Choice and Competition Approach.”