Houston lies at the epicenter of the ongoing COVID-19 pandemic, with uninsured numbers double that of the nation, a high incidence of chronic disease, and a chronic provider shortage. Local providers are being further taxed by significant changes to the state’s 1115 waiver, including an extension and then rescindment of a 10-year block of funding—expected to sunset in September 2021—to help offset hospitals’ uncompensated costs. Without this funding, suppressing costs through population health programs, especially social determinants of health, will be imperative. Among the Lone Star State’s major markets, Houston ranks as one of the most prepared for a more formal transition to value-based care, given every major IDN’s participation in at least one alternative payment model, combined with the presence of several powerful provider networks and integrated health plans. Continued emphasis on provider alignment and clinical integration grants Houston providers increasing leverage with national payers, and contract disputes have become the norm, frequently threatening network changes for tens of thousands of Texans. These disputes are likely to continue as IDNs grapple with pandemic-related costs. That said, many of the market’s largest IDNs reported an excess of revenues over expenses in recent months, and tens of millions’ worth in capital projects remain in the pipelines for the next few years. Expansions for pediatrics, cardiovascular care, orthopedics, and behavioral health (via what will be the nation’s largest academic psychiatric facility, UTHealth’s Continuum of Care campus) means opportunity for branded drugs remains high.