AI is increasingly being combined with prescription drugs and other therapies in the push to personalize medicine.

• But that's making it harder to define whether a compound or an algorithm is actually doing the healing.

The big picture: Optimism over new ways to deliver customized, real-time care in patients' homes is being tempered by legal and regulatory questions about how to treat hybrid products that learn and evolve from their interactions with patients.

• One concern is whether the technology can overtake the treatment and make a drug useless without the accompanying data.

The latest: AI-powered apps, wearables and Bluetooth-connected devices are being deployed to manage chronic conditions like diabetes, help people recover from surgery and treat depression and addiction.

• The technology could help close critical gaps in care, like the nation's shortage of behavioral health professionals.
• It also can eliminate clinicians' near-total reliance on patients to report how they feel and whether they're really following their doctor's instructions.

Driving the news: Software-based treatments have been around for more than 15 years, but now they're proliferating, with new applications for conditions including Alzheimer's.

• The FDA just greenlit an AI virtual care assistant for patients recovering from joint replacement surgery. It performs regular check-ins and can contact the physician if there are complications.
• There's also a smartphone app the agency cleared in 2024 for treating depression. It supplements antidepressants with exercises to help the brain process emotions and lessons to help manage depression symptoms.

Yes, but: Insurers aren't convinced it's all worth the extra cost. And calculating the actual benefit to a patient can be tricky when a treatment lives on a phone in someone's pocket and relies on the person's willingness to engage.

• Medicare only has limited coverage of software-based disease treatments, and private insurers have a patchwork of payment policies, largely because the technologies are so new.

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A federal review of 40 nursing home inspections found staffs gave antipsychotic drugs to residents with dementia to help manage their behavior despite FDA warnings that the drugs could increase their risk of death.

Why it matters: The findings add to concerns about the use of antipsychotics in nursing homes, including a 2019 report that estimated that more than 1 in 5 residents were prescribed these drugs.

What they found: The HHS inspector general's review reports "alarming instances of inappropriate use of antipsychotic drugs" that it said "revealed vulnerabilities in care that have implications for the wider nursing home population."

• Medical directors at facilities failed to prevent inappropriate use of antipsychotic drugs.
• Nursing home pharmacists also failed to identify medical concerns and did not recommend dose reductions.
• Facilities had inadequate policies and procedures that undermined safeguards meant to protect residents.

In another report, the IG found nursing homes inappropriately diagnosed residents with schizophrenia to mask the misuse of antipsychotic drugs and to artificially inflate their star ratings.

• The FDA doesn't approve the use of antipsychotic drugs to treat dementia, restricting use to treat symptoms of psychiatric disorders such as schizophrenia.
• The drugs have a sedative effect, raising concerns that they could be used to control behavior.

The trade group American Health Care Association/National Center for Assisted Living, which represents nursing homes, told MedPage that the reports are based on a small subset of nursing homes and not indicative of national trends.

With the clock ticking, the Trump administration has narrowed its search for a new CDC director to about a half dozen candidates, including former Kentucky Gov. Ernie Fletcher (R) and Johns Hopkins cardiologist Joseph Marine, according to published reports.

Why it matters: NIH director Jay Bhattacharya's term as acting CDC director expires on Thursday under the Vacancies Reform Act, and the administration has said it wants to appoint a full-time political leader for the embattled agency.

• But because the CDC director is confirmed by the Senate, a nomination could bring more attention to Health Secretary Robert F. Kennedy Jr.'s. vaccine policies and other contentious public health moves at a time when the White House is refocusing its health agenda.

Driving the news: Fletcher and Marine are on the administration's short list, Bloomberg first reported. Also under consideration is Mississippi health director Daniel Edney, per the Washington Post.

• Chris Klomp, who is overseeing all HHS operations as a de facto chief of staff, is playing a key role vetting the candidates and looking for someone who can work with Kennedy but also has traditional public health experience, the Post reported.
• Fletcher helped found a nonprofit providing housing for individuals with substance use disorders.

The CDC has lacked a full-time director since Susan Monarez was fired in August. Bhattacharya succeeded Jim O'Neill as acting director, but such vacancies can only be filled on a temporary basis for up to 210 days.

Patient care generates only about a third (34%) of hospital revenues on average, according to a new Trilliant Health analysis of acute care facilities' performance in 2024.

Why it matters: Hospitals account for the biggest share of U.S. health care spending — $1.6 trillion, or 31% of the $5.3 trillion total for 2024.

• Many facilities are diversifying their revenue streams, making it important to distinguish between total hospital income and the tight operating margins the industry frequently cites.

What they're saying: "With the benefit of these non-operating revenue sources, many nonprofit health systems with negative operating margins are able to achieve positive overall margins," Trilliant said.

What they found: More than half of short-term acute care hospitals' share of patient revenue as a percentage of gross revenue was between 20% and 45%.

• Labor accounted for more than a third of facilities' expenses and was the biggest cost category, followed by drugs and capital costs.
• Most hospitals, particularly nonprofits, generate revenue from activities beyond direct patient care like grants, investment earnings, medical device sales, philanthropic contributions and real estate income.
• Specialty pharmacy and infusion services are key profit drivers for many nonprofit health systems, as they expand their ambulatory care presence.

⚖️ A judge provided temporary relief to 21 states seeking to stop Kennedy from ending federal funding to hospitals that provide gender-transition care. (NYT)

⚕️ The administration is weighing whether to automatically enroll Medicare beneficiaries into Medicare Advantage plans, an idea touted in the Project 2025 blueprint. (Stat)

🏥 A virtual court hearing from a pregnant woman's hospital bed shows what forced medical treatment can look like. (ProPublica)