Game On: Team Trump aims to Shake up Healthcare with Rules, Laws, Appointments and Swagger

The prologue to the Trump Presidency is history. It is marked by promises to reduce federal spending by $2 trillion, deport illegal immigrants and close the border, replace establishment appointees with MAGA true believers and Make America Healthy Again (MAHA). Today, the Trump team takes over.

For those who work in healthcare, these pledges are profoundly important. The healthcare industry is a primary target for Team Trump changes. Per the CBO, in 2023 (the last year data is available), the federal government spent $6.1 trillion–$1.7 trillion more than its revenues. That spending included $1.45 trillion for Medicare and Medicaid (24% of total federal spending and 30% of total healthcare spending)– 7.5% more than 2022 spending which increased 4.6%. The deficit for 2023 hit 6.3% of the GDP vs.an average 3.7% for the last 50 years, and the administration’s promised extension of 2017 Tax cuts will add $4 trillion to the current $36.1 trillion national debt—an all-time high. Federal spending and deficits are the issue for fiscal hawks, but it’s abstract for most consumers.

Team Trump won by promising to lower the prices people pay for food, energy and everyday necessities including healthcare. Last year, consumers paid 2.9% more for everything they use, but their prices for medical services increased even more–+3.4% continuing a decade-long trend. Notably, the Bureau of Labor Statistics’ January 15 report noted professional services including physicians and other providers below the overall increase at +2.8% but hospitals and insurers well above (+4.0% and +4.8% respectively) for the year. And the Congressional Budget Office projects the trend to continue through 2032 with Medicare and Medicaid shortfalls mounting.

Team Trump takes the stage at a precarious time for U.S. healthcare. The industry is reeling from the murder of an insurance executive Brian Thompson December 4, overall public dissatisfaction with the health system and growing increasingly high-profile, inter-sector hostilities between hospitals and insurers, drug companies and PBMs and private equity backed ventures vs. regulators.

Team Trump is buoyed by an approving public: at 55% today (CNN) and with control of the Senate, House, HHS, FTC and the DOJ, it has the wind at its back. But popularity in politics is no assurance of legislative wins, especially in the current era of partisan brinksmanship, global hotspots and unrealistic public expectations.

Team Trump’s Day One executive orders will set an immediate tone: closing the Southern border and initiating immigrant deportation via Operation Safeguard in Chicago will get immediate attention. Pardons for some January 6, 2021 detainees and more will quickly follow. And then, healthcare.

For 2 months, House Budget committee staff have been harvesting cost-reduction suggestions from MAHA friendly trade groups and industry antagonists. The list of 50 proposed cuts leaves no sector untouched:

Public health is in limbo though Team Trump is keen to connect public health programs with local health delivery. How Medicaid policy evolves in team trump strategy and the role states play will factor heavily into public health funding and oversight. Nursing homes are likely to get relief from the Biden minimum staffing mandate and hospital at home proposals have guarded support. Medical device manufacturers will be on guard for pending tariffs and, with prescription drug makers, navigate changes in their global marketing and procurement policies. And traditional HCIT players—like Epic, Cerner, Meditech and others—will see their plans complicated by Team Trump’s affinity for Big Tech that might accelerate AI driven solutions and interoperability beyond their comfort zones.

However, it’s the environment for healthcare’s Big Four that is most impacted by Team Trump:

1-Physicians get a mixed bag: bipartisan support for a new physician pay formula (after 5 years of below cost reimbursement) is relatively strong, but how a new formula allocates $$ preferentially to primary care, mental health professionals PLUS nutritionists and non-allopathic providers new to the mix are unknowns. AMA is closely watching, weary about how AI will displace clinical judgement autocracy they demand, how ACA limits on physician-owned hospitals may be revisited to disable hospital power and how reimbursement rates for physicians in Medicare Advantage and Medicaid will be set. Team Trump has an ear for critics of traditional medicine who suspect the scientific community of deep state conspiracy around issues like vaccines, weight loss drugs and the efficacy of non-traditional therapies and providers. It’s a mixed bag.

2-Drug companies can expect swift action on PBMs and regulatory roadblocks to the Biden administration’s Inflation Reduction Act Medicare drug discounts—both to their liking. But confirmation of FDA critic Robert Kennedy as HHS head and his Make America Healthy Again agenda, and top-to-bottom overhaul of the FDA, NIH and CDC thrusting put the trustworthiness of science and the business practices of manufacturers and suppliers to center stage are concerns. Notably, PhRMA has launched an ad campaign to defend its members’ interests. Team Trump has pledged to end drug company advertising but remedies like GLP-1s for obesity defy traditional rules for market access. Immediate attention will be drug prices: details to follow.

3-Health insurers face immediate hurdles: the Budget Committee will suspend subsidized coverage through ACA marketplaces slated to end this year resulting in loss coverage for at least 4 million. Regulatory modifications in the individual, Medicare Part D and Medicare Advantage markets are likely requiring potentially-costly operational changes. Increased utilization of hospitals, prescription drugs and physician services that kneecapped insurer profits in 2024 will continue exacerbating tension with hospitals, doctors and drug companies.  Congress will mandate business model changes to PBMs cutting into profits for their insurer-owners. Prior authorization and denial management will soften under pressure from regulators and plan consolidation will face court challenges. Antipathy toward health insurers is widespread: the road ahead is likely to strengthen large corporate insurers and debilitate smaller players. It’s survival of the fittest.

4- Hospitals are arguably hardest hit. Proposals from the Budget Committee’s wish list include quick passage of site neutral payments that enjoys bipartisan support. Changes to tax exemptions for not-for-profit hospitals has support thrusting community benefit definition and charity care calculus into the mix of Medicare solvency solutions. Block grants/per capita payments to states for Medicaid favored by GOP budget hawks will mean lower reimbursement to hospitals even as they deal with increased utilization and bad debt as 4 million lose their insurance coverage. Team Trump’s affinity for private sector competition over government-controlled markets opens a “can of worms” for hospital operators. On the table will be physician ownership of hospitals, more transparency requirements and unprecedented changes in hospital workforce mandates. In response, the American Hospital Association launched a new ad campaign this month to defend the blue “H” and updated its advocacy platform targeting adequate payment, corporate insurer profiteering and recognition of unique regulatory obligations for 24/7 emergency services for lawmaker attention.

Final thought:

No one knows for sure what to expect specifically from Team Trump, but its direction in the immediate future for U.S. healthcare is clear: getting its leadership tri-fecta confirmed (Kennedy, Oz, Makary) and issuing executive orders that demonstrate it’s not ‘business as usual’ for healthcare or everywhere else. Three adjectives describe the essential ethos driving Team Trump’s approach to governing:

• Team Trump is populist: lower prices for healthcare, along with housing, energy and food, are its primary focus. Demonstrating its policies have the potential to deliver on all four is key. A notable symbol in today’s Inaugural fanfare will be signage: “Trump will Fix It”.
• Team Trump is transactional: private sector deals that create new, high-value solutions for consumers and employers are preferred over government-created programs. “The Art of the Deal!” is the pedigree. Dealmakers with innovative solutions and access to private capital are welcome. DC talking heads and re-tread federal health agency personnel need not apply.
• Team Trump is political: actions, personnel choices, and policies will be evaluated on the basis of popular (voter) support–especially in the November, 2026 mid-term election. Team Trump will remind everyone everyday “He won.”

Hovering over Team Trump’s agenda is the reality that Americans think the country is heading in the wrong direction and trust in its institutions including the health system is at a historic low. Restoring confidence will be a gargantuan task.

Team Trump will use Executive Orders, personnel appointments, court challenges, and legislation to advance its healthcare agenda powered by its ‘take no prisoners’ operating mode whereby the ends are justified by means. Every sector in healthcare will be impacted, some more than others.

Paul

In Davos, Switzerland today, 2500 executives and consultants will commence schmoozing at the World Economic Forum (WEF). In 2020, WEF issued its Davos Manifesto establishing that WEF is guided by stakeholder capitalism which posits that a corporation should deliver value not only to shareholders but also to all those who have a stake in the destiny of the company, including employees, society, and the planet “improve the state of the world.”.

Like JPM last week in San Francisco, executive attendees will have added security as global antagonism against “big business” mounts and the murder of UHG exec Brian Thompson lingers. Healthcare is increasingly seen as big business.

Reacting to changes in the current environment of U.S. healthcare resulting from Team Trump is necessary and time-consuming, but neglecting thoughtful consideration about the system’s long-term future and its role in “improving the state of the world” is fatalistic.  Both need attention.  

Resources in addition to citations that follow:

• National Health Spending https://www.healthaffairs.org/do/10.1377/he20241230.971146/full/nhe23-press-event-final.pdf
• Beneath the deal-making, debate and sympathy over Americans’ anger over health care (Stat the Read Out @JPM Healthcare’s Biggest Bash) January 16, 2025
• EDITORIAL Boston Globe
  ‘Unconventional’ Trump Cabinet picks represent a clear and present danger January 19, 2025
• GAO, Private Health Insurance: Market Concentration Generally Increased from 2011 through 2022, November 2024
• Don’t Call it a Comeback Business Insider January 16, 2025 https://l.businessinsider.com
• Fiscal hawks draw red lines on Trump’s first big bill, risking GOP support CNN January 12, 2025 https://www.cnn.com/2025/01/12/politics/house-republican-conservatives-trump-agenda

 

Sections in Today’s Report

• Quotables
• Alternative Payment Models
• Economy
• Employers
• Hospitals
• Insurers
• Physicians
• Polling
• Prescription Drugs
• Private Equity
• Regulators

 

Quotables

UHG CEO on health system: “Fundamentally, health care costs more in the U.S. because the price of a single procedure, visit, or prescription is higher here than it is in other countries… …The core fact is that price, more than utilization, drives system costs higher….health care system needs to be less confusing, less complex, and less costly….The core fact is that price, more than utilization, drives system costs higher…there are participants in the system who benefit from higher prices even as others work to fix the problem..”

Andrew Witty, UHG CEO Earnings Call January 16, 2025 www.uhg.com UnitedHealth defends business in wake of Thompson killing | STAT

McKinsey on the “value-now” consumer: …” consumers report feeling more optimistic about the US economy than they have all year. Even so, US consumer optimism overall is still lower than prepandemic levels, and more than half of consumers (53%) report mixed feelings or being pessimistic about the state of the economy.

For decades, consumer sentiment and consumer spending have moved in sync—when people feel unsure about the economy, they spend less. But in the last couple of years, that hasn’t been the case. Consumer sentiment cratered when inflation surged and has not really recovered.

While some consumer categories are seeing spending growth slow, the US macroeconomy has been strong, buoyed by cooling inflation, still-low unemployment, and higher wages that have outpaced inflation. This has kept total spending moving but has not improved sentiment, which is still far below prepandemic levels. People’s perception of their well-being has simply not budged…

The range of economic factors show that consumers are in better shape than sentiment indicators and survey data suggest… The cost-of-living crisis and higher-than-usual inflation have made life more difficult for lower-income consumers (consumer businesses that serve these consumers are seeing some pullback on spending)…In short: Consumer executives should pay attention not only to what consumers say but also to what they do, while investing in the right tools. Otherwise, consumer businesses will be left in the dark.”

The ‘value now’ consumer: Making sense of US consumer sentiment and spending | McKinsey January 13, 2025

Medicaid block grants: “The incoming Republican Congress and administration are focused on cutting the size of the federal budget to make space for an extension of tax cuts otherwise projected to sunset in 2026. One policy proposal that has resurfaced is to convert the Medicaid program into a block grant–type program, such as one with per-capita caps. Under current Medicaid rules, the federal government generally pays states between 50% and 77% of the cost of Medicaid for beneficiaries eligible under pre-Affordable Care Act (ACA) rules and 90% of the cost of Medicaid for those newly eligible under the ACA. This matching formula incentivizes states to spend more on their Medicaid programs than they would if they had to fully pay for additional spending.^1,2 Under a block grant, federal Medicaid spending would have an upper limit cap (on a per-capita basis in some proposals) that increases at a predetermined rate without regard to state spending… The federal government manages its budget over a 10-year budget window. The Social Security and Medicare trust funds, which will have obligations toward current Medicaid beneficiaries in the future, operate over a 75-year time horizon. But states must balance their budgets within 1 year (in 30 states) or, at most, within 2 years (in 20 states). Some prior block grant proposals (eg, the 1981 and 1994 proposals) have deliberately exploited this discrepancy between federal and state budget timelines. They have been designed to offer states short-term windfalls (attractive to state governments that must manage within their 1- or 2-year budget window) while imposing draconian cuts in later years (generating savings for the federal government across its 10-year window). Similarly, Tennessee sought a Section 1115 Medicaid waiver amendment to convert federal matching payments to a block grant, gaining funds and flexibility in the short-term because the state was so far below the budget neutrality cap, but potentially limiting funding over the long-term….

The flaws of block grants have always been apparent, more so today, when therapies that could address long-standing US health challenges and inequities are increasingly available, but require longer time horizons for return on investment than state budgets allow…”

Medicaid Per-Capita Cap Myopia January 16, 2025. doi:10.1001/jamahealthforum.2025.0024

Jarrard on Trust: “There’s a whole reservoir of lost trust out there just waiting to be tapped. Who will score? The humble. That’s what the scientists are telling us – but quietly and with extreme humility, of course…. A new study in Nature Human Behavior extolls the power of “intellectual humility” for scientists who want themselves and their work to be trusted. It maintains that we reject arrogant experts but trust humble teachers….Where’s the chaos coming from?

• Members of both major political parties don’t trust members of the other.
• National media and Congress are roommates down in the basement of every trust index.
• Tragic events ignite political outrage – even the coverage of the LA wildfires has set off politicized fights over firefighting.
• Physiciansand nurses don’t trust their leaders and are willing to walk out because of it as last week’s news out of NYC H+H told us.
• Many consumers don’t trust healthcare. Or the health insurance industry. Or even good medicine.

The Big Story: The effect of seeing scientists as intellectually humble on trust in scientists and their research Jarrard January 19, 2025 https://email.jarrardinc.com/trust-spiders-and-the-science-of-humility?

Lancet: Obesity definition: “We define clinical obesity as a chronic, systemic illness characterized by alterations in the function of tissues, organs, the entire individual, or a combination thereof, due to excess adiposity. Clinical obesity can lead to severe end-organ damage, causing life-altering and potentially life-threatening complications (eg, heart attack, stroke, and renal failure). We define preclinical obesity as a state of excess adiposity with preserved function of other tissues and organs and a varying, but generally increased, risk of developing clinical obesity and several other non-communicable diseases (eg, type 2 diabetes, cardiovascular disease, certain types of cancer, and mental disorders) ….”

Lancet: Definition and diagnostic criteria of clinical obesity  https://www.thelancet.com

Economic resources of Millennials: “Millennials — people born from 1981 to 1996 — have long had a “forever young” air to them. Obviously, they’re not going to be young forever, and plenty of them are pushing 40 or already there, but the generation has been marked by a sense of arrested development. The stereotypical millennial is a 33-year-old still living in his parent’s basement, lamenting he’ll be a forever renter with no hope of retiring.

But the reality of many millennials is starting to more closely mirror their parents’…The good news for millennials, on average, is that they are generally turning out OK, despite the headlines a decade ago proclaiming that lattes would doom them to eternal squalor. The bad news is that OK does not always feel great, especially in a culture where the expectation is you’re constantly striving to do more and better…”

Millennials aren’t the lost generation after all. They’re boomers 2.0, with a side of avocado toast.https://www.businessinsider.com/millennials-baby-boomers-wealth-income-home-buying-ownership-suburbs-kids-2025-1

 

Alternative Payment Models

Medicare Accountable Care Organizations In 2023: Results:  “In late October 2024, the Centers for Medicaid and Medicare Services (CMS) released data for the eleventh year of the Medicare Shared Savings Program (MSSP)…The number of participating accountable care organizations (ACOs) decreased slightly from 2022 due to a confluence of factors, but as fewer beneficiaries enroll in traditional Medicare and alternative programs for ACOs such as the ACO Realizing Equity, Access, and Community Health (ACO REACH) Model, attribution in shared savings programs (SSPs) will be challenging…Some of our key findings include:

• Overall, 453 different organizations participated in the MSSP, a 6 percent decline from the previous year’s 482 participants. The total number of beneficiaries also declined by roughly 2%from 2022 to 2023.
• For the second year since the MSSP began, the majority of ACOs took on downside risk: 67% of ACOs were two-sided risk, while 33% were upside only. ACOs in two-sided risk were nearly twice as likely to achieve shared savings than upside-only ACOs.
• In 2023, the ACOs in the MSSP produced more than $2.10 billion in net savings and generated $3.08 billion in savings compared to benchmarks, or $234 net savings per capita, a 22% increase in net savings per capita and almost double the net savings compared to benchmarks from 2022.
• Consistent with last year’s findings, ACOs with a larger share of participating primary care physicians were more likely to receive shared savings and higher net savings per capita.
• Non-dually enrolled beneficiaries presented higher risk scores and greater average net savings per capita compared to the dually enrolled population.”

Medicare Accountable Care Organizations In 2023: Large Savings with Increasing Value-Based Programmatic Competition | Health Affairs

 

Economy

Per the BLS: “The Consumer Price Index (CPI) for All Urban Consumers (CPI-U) increased 0.4 % on a seasonally adjusted basis in December, after rising 0.3% in November. Over the last 12 months, the all-items index increased 2.9% before seasonal adjustment.

The index for energy rose 2.6% in December, accounting for over 40% of the monthly all items increase. The gasoline index increased 4.4% over the month. The index for food also increased in December, rising 0.3% as both the index for food at home and the index for food away from home increased 0.3 percent each.

The index for all items less food and energy rose 0.2% in December, after increasing 0.3% in each of the previous 4 months. Indexes that increased in December include shelter, airline fares, used cars and trucks, new vehicles, motor vehicle insurance, and medical care…The medical care index increased 0.1% over the month, after rising 0.3 percent in October and November. The index for physicians’ services increased 0.1% in December and the index for hospital services rose 0.2% over the month. The prescription drugs index was unchanged in December.”

 

Category	% Impact on Total CPI	Unadjusted % Change 2024
All items	100.00	+2.9%
Food	13.48	+2.5%
Energy	6.44	-0.5%
All items less food & energy	80.08	+3.2%
Shelter	36.71	+4.6%
Medical care commodities Prescription drugs Non-Prescription drugs	1.45 0.89 0.44	+0.5% +1.1% -+0.3%
Medical care services Professional Services Hospital + related Services Health insurance	6.54 3.63 2.33 0.59	+3.4% +2.80% +4.0% +4.8%

Consumer Price Index Summary January 15, 2025 https://www.bls.gov/news.release/cpi.nr0.htm

Federal Research Beige Book January 2025: “Economic activity increased slightly to moderately across the twelve Federal Reserve Districts in late November and December. Consumer spending moved up moderately, with most Districts reporting strong holiday sales that exceeded expectations… More contacts were optimistic about the outlook for 2025 than were pessimistic about it, though contacts in several Districts expressed concerns that changes in immigration and tariff policy could negatively affect the economy.

Employment ticked up on balance, with six Districts reporting a slight increase and six reporting no change. Contacts in several service industries, notably healthcare, continued to see job growth…

Prices increased modestly overall, with growth rates ranging from flat to moderate…Input costs also rose, with contacts highlighting higher insurance prices, particularly for health insurance. However, as with selling prices, there were several mentions of flat or lower input costs, particularly for fuel. Contacts expected prices to continue to rise in 2025, with some noting the potential for higher tariffs to contribute to price increases.”

The Fed – Monetary Policy: Beige Book (Branch)

 

Employers

Mercer: Employer-Sponsored Health Plan Strategies: % of employers with 500+ employees listing strategy as “very important” for the next 3-5 years:

• Managing high-cost claimants: 54%
• Managing cost for specialty drugs: 41%
• Enhancing benefits to improve attraction and retention: 32%
• Improving health care affordability: 29%
• Expanding behavioral healthcare access: 27%
• Enhancing benefits/resources to support women’s reproductive health: 15%
• Offering high-performance networks or steering to high-value care: 15%
• Increasing use of virtual care throughout the health care journey: 12%
• Addressing health inequities/social determinants: 11%

Mercer’s National Survey of Employer-Sponsored Health Plans, November 2024

Employers pursue delay in Mental Health Parity Implementation: The Erisa Industry Committee (ERIC) represents 100 large employers who are challenging the Labor Department enforcement of Biden administration rules (HHS 9/24) that ensure mental-health treatment is covered like conditions such as cancer and heart disease per 2008 parity law. “It hopes that stopping enforcement now will give the new Trump administration room to revise or issue new regulations. Unlike an executive order, which can be rescinded with the stroke of a pen, agency-issued regulations must go through a lengthy process to be revoked or revised…

Around 60 million American adults suffered from mental illness in 2023…and 48.5 million people over the age of 12 experienced a substance-use disorder that year. The 2008 law, called the Mental Health Parity and Addiction Equity Act, was designed to curtail arbitrary annual limits imposed by insurance plans on mental-health coverage. Insurers aren’t supposed to limit psychotherapy appointments, for example, if they don’t also have similar limits on doctor visits for a chronic condition like asthma. The law also prohibits them from imposing higher copayments and deductibles or more restrictive prior-authorization requirements for mental-health care…”

Employer Group Sues to Block Biden Rules on Mental-Health Benefit January 17, 2025 https://www.wsj.com/politics/policy/mental-health-coverage-parity-lawsuit-b9f23795?mod=itp_wsj,djemITP_h

 

Hospitals

AHA releases 2025 Advocacy agenda: Last week, AHA released its 2025 Advocacy Agenda that details the association’s key priorities for Congress, the Administration, regulatory agencies and courts. The agenda is focused on ensuring access to care; strengthening the health care workforce; advancing quality, equity and health care system resiliency; leading innovation in care delivery; and reducing health care system costs for patient care.

2025 Advocacy Agenda https://www.aha.org/system

AHA launches ad campaign: “The AHA today launched a new television and multimedia advertising campaign highlighting how hospitals and health systems are there for all of life’s moments, 24/7/365, caring for patients and communities across the country. The campaign includes a 30-second TV ad that will run on national and cable TV, in addition to digital ads and social media posts from the AHA’s various communications channels.

In addition, the Coalition to Strengthen America’s Healthcare today launched new billboard advertising at Ronald Reagan Washington National Airport highlighting how hospitals are always there for patients and communities. The AHA is a founding member of the Coalition.”

AHA Today January 13, 2025 www.aha.org/

Study: Patient complexity in academic, community hospitals similar: “In this cohort study of 947, 070 general medicine encounters at 28 academic and community hospitals in Ontario, Canada, patients had similar baseline clinical and social characteristics. Patient volumes per physician and patient readmission rates were higher at academic hospitals, whereas hospital mortality and length of stay were similar. Results:

Baseline clinical characteristics were similar at community and academic hospitals…Social characteristics, including income, education, and neighborhood proportion of racial and ethnic minority and immigrant residents were also similar. The number of unique discharge diagnoses was similar at academic and community hospitals. Patient volumes per attending physician were higher at academic hospitals …

Conclusions: In this cohort study, patients admitted to general medicine at academic and community hospitals had similar baseline clinical characteristics and generally similar clinical outcomes, with greater readmission rates in academic hospitals. These findings suggest that the patient case mix in general internal medicine that trainees would be exposed to during their residency training at academic hospitals is largely representative of the case mix they would encounter at community hospitals, and has important implications for health services planning and funding.”

Patient Complexity, Social Factors, and Hospitalization Outcomes at Academic and Community Hospitals Michael Colacci et al JAMA Netw Open. 2025;8(1):e2454745. doi:10.1001/jamanetworkopen.2024.54745

 

Insurers

Study: Supplemental benefit use in MA vs. Medicare FFS: “In this cross-sectional study of 76, 557 Medicare beneficiaries, more of those with MA than with TM had coverage of supplemental benefits, but spending and use were similar, and many MA beneficiaries were not aware of dental or vision coverage. The MA beneficiaries paid 9.0% and 9.3% less out of pocket for eyeglasses and dental visits, respectively, but no less for most other supplemental services…

These findings suggest that MA beneficiaries may not receive more supplemental services than TM beneficiaries possibly because of cost-sharing and limited awareness of benefit coverage.”

Use and Costs of Supplemental Benefits in Medicare Advantage, 2017-2021 Cai et al JAMA Netw Open. 2025;8(1):e2454699. doi:10.1001/jamanetworkopen.2024.54699

UnitedHealth Group Financial results for 4Q, 2024: From its earnings call last Thursday:

UnitedHealth Group

• Total revenues in 2024 were $400.3 billion, up 7.7% year over year. In the fourth quarter, revenues were $100.8 billion.
• For 2025, the company projects revenues of $450 billion to $455 billion and adjusted net earnings of $29.50 to $30.00 per share.
• Total net earnings in 2024 were $14.4 billion, down 35.6% from $22.4 billion year over year. In the fourth quarter, net earnings were $5.5 billion. Net margin for 2024 was 3.6%.
• Full year and fourth quarter adjusted earnings per share were $27.66 and $6.81 per share, respectively.
• The company’s medical loss ratio was 85.5% for 2024.

UnitedHealthcare

• Total revenues in 2024 were $298.2 billion, up 6% year over year. In the fourth quarter, revenues were $74.1 billion.
• Total earnings from operations in 2024 were $15.6 billion, down 4.9% year over year. In the fourth quarter, earnings were $3 billion. The operating margin in 2024 was 5.2% and 4% in the fourth quarter.
• Total domestic membership is 49.3 million, which grew by 2.1 million in 2024. Commercial membership in 2024 is 29.7 million. There are 7.8 million Medicare Advantage members, 7.4 million Medicaid members, and 4.3 million members with Medicare supplement plans. Part D standalone membership is 3.1 million.

Optum

• Total revenues in 2024 were $253 billion, up 11.7% year over year and led by Optum Rx and Optum Health. In the fourth quarter, revenues were $65.1 billion.
• Total earnings from operations in 2024 were $16.7 billion. In the fourth quarter, earnings were $4.8 billion. The operating margin in 2024 was 6.6% and 7.4% in the fourth quarter.
• Optum Health’s 2024 revenues were $105.4 billion, up 10.5%
• Optum Insight’s 2024 revenues were $18.8 billion, down 1%.
• Optum Rx revenues in 2024 were $133.2 billion, up 14.8%.

UHG January 16, 2025 www.uhg.com

Insurer Market Concentration in States, 2022:

Market	Median number of issuers per state	Number of states where three largest issuers held at least 80% of market share	Median market share of three largest issuers (%)	Number of states where single largest issuer held at least 80% of market share	Median market share of single largest issuer (%)
Individual health insurance market	10	35	91%	7	50%
Individual exchanges	5	47	96%	8	58%
Small-group health insurance market	6	47	98%	15	62%
Large-group health insurance market	8	43	93%	12	62%

GAO, Private Health Insurance: Market Concentration Generally Increased from 2011 through 2022, November 2024

CMS issues broker rule: Last Monday, Centers for Medicare and Medicaid Services (CMS) issued the final “HHS Notice of Benefit and Payment Parameters for 2026” (or the “final 2026 Payment Notice”) that sets standards for the Health Insurance Marketplaces, as well as for health insurance issuers, brokers, and agents who connect millions of consumers to ACA coverage. The rule finalizes additional safeguards, beginning in 2026, to protect consumers from unauthorized changes to their health care coverage, as well as options to ensure the integrity of the Federally-facilitated Marketplaces (FFMs). Additionally, the rule will make it easier for consumers to understand their costs and enroll in coverage through HealthCare.gov beginning in plan year 2026.”

The Notice of Benefit and Payment Parameters for 2026 makes it easier for CMS to suspend agents and brokers who market exchange plans. The agency drafted this policy after KFF Health News reported last April that some brokers were switching consumers into different plans without their permission.

HHS Notice of Benefit and Payment Parameters for 2026 Final Rule CMS January 13, 2025 www.cms.gov

 

Physicians

Study: Primary care use by new Medicare enrollees: Using data from the 2014–21 Medical Expenditure Panel Surveys, we examined the effect of Medicare enrollment on office and outpatient visits across provider… We found that Medicare enrollment at age sixty-five led to a 14% increase in visits to primary care providers and a 31% increase in visits to other providers, with the former more prominent among Medicare Advantage enrollees. In contrast, there was no change in visits to mental health care providers.”

Medicare Enrollment Increased Visits To Primary Care Providers But Not Mental Health Care Providers, 2014–21 | Health Affairs

Primary care shortage: “In 2024, 252 of the nation’s 3,139 pediatric residency slots went unfilled and family medicine programs faced 636 vacant residencies out of 5,231  as students chased higher-paying specialties….

The Association of American Medical Colleges projects a shortage  of 20,200 to 40,400 primary care doctors by 2036. This means many Americans will lose out on the benefits of primary care, which research shows improves health, leading to fewer hospital visits and less chronic illness.

Many medical students start out expressing interest in primary care. Then they end up at schools based in academic medical centers, where students become enthralled by complex cases in hospitals, while witnessing little primary care.

The driving force is often money…

U.S. News & World Report recently ranked  168 medical schools by the percentage  of graduates who were practicing primary care 6 to 8 years after graduation. The top 10 schools are all osteopathic medical schools, with 41% to 47% of their students still practicing primary care…At the bottom of the U.S. News list is Yale, with 10.7% of its graduates finding lasting careers in primary care. Other elite schools have similar rates: Johns Hopkins, 13.1%; Harvard, 13.7%…”

Can Medical Schools Funnel More Doctors Into the Primary Care Pipeline?  Felice J. Freyer, KFF Health News January 13, 2025 www.kffhealthnews.org

 

Polling

KFF Health Tracking Poll: Public View on Health Care Spending: Key Findings from the latest tracking poll:

• “Both Medicare and Medicaid continue to be viewed favorably by large majorities of the public, including majorities of Republicans, Democrats, and independents. While lawmakers are discussing changes to Medicaid and Medicare including possible spending cuts, about half of the public think the federal government isn’t spending enough on each of these programs. Half (51%) say the federal government spends “not enough” on Medicare, and nearly half (46%) say the same about the Medicaid program. Across both programs, the share of the public who say the government isn’t spending enough is more than twice the share who say the government is spending “too much.”
• Majorities of the public – including about half or more across partisans – say boosting health care price transparency rules (61%), setting stricter limits on chemicals found in food supply (58%), and more closely regulating the process used by health insurance companies when they approve or deny services or prescription drugs (55%) should be a “top priority” for the incoming administration and Congress. Expanding the number of prescription drugs that the federal government negotiates the Medicare price on is also ranked as a “top priority” by a majority of the public including two-thirds of Democrats, 54% of independents, 48% of Republicans and three-fourths of people who are currently enrolled in Medicare.
• Nearly two-thirds of adults (64%) hold a favorable view of the 2010 Affordable Care Act (ACA), but views on the future of the law are still largely partisan…
• Overall, about three-fourths (73%) of the public thinks that reducing fraud and waste in government health programs could lead to reductions in overall federal spending.”

KFF Health Tracking Poll: Public Weighs Health Care Spending and Other Priorities for Incoming Administration | KFF

Gallup: Occupational trust: “Three in four Americans consider nurses highly honest and ethical, making them the most trusted of 23 professions rated in Gallup’s annual measurement. Grade-school teachers rank second, with 61% viewing them highly, while military officers, pharmacists and medical doctors also earn high trust from majorities of Americans. The least trusted professions, with more than half of U.S. adults saying their ethics are low or very low, are lobbyists, members of Congress and TV reporters…

Trust in medical doctors has fallen 14 percentage points since 2021. After reaching a historical high of 77% in 2020, doctors’ ethics rating not only returned to its 2019/pre-pandemic level of 65% but, at 53%, is now the lowest since the mid-1990s.

Day care providers, pharmacists, nurses and nursing home operators — all of which had enjoyed enhanced reviews during year one or year two of the pandemic — have since dropped below their average pre-pandemic ratings…”

Americans’ Ratings of U.S. Professions Stay Historically Low https://news.gallup.com/poll/655106/americans-ratings-professions-stay-historically-low

US News: 100 Best Jobs: USNWR released the 100 Best Jobs of 2025 rankings Tuesday, based on hiring demand, future prospects, wage potential, employment, job safety, stability and work-life balance. Top 10:

1. Nurse practitioner
2. IT manager
3. Physician assistant
4. Financial manager
5. Software developer
6. Information security analyst
7. Medical and health services manager
8. Data scientist
9. Speech-language pathologist
10. Actuary

These jobs topped U.S. News’ Best Jobs list

Ando-Gallup: perceptions of healthy eating: The study, released last Tuesday, is based on surveys of adults 140 countries  Highlights:

• Globally, 81% of people said in 2023 they enjoyed their food in the past week– down from 87% the year before. And about 75% of people said they ate mostly healthy, compared with 82% in 2022.
• In the United States, the percentage of people who felt they ate mostly healthy foods dropped from 83% in 2022 to 71% in 2023.

Conclusion: “In 2023, people were less likely to enjoy the food they ate than they were the year before — enjoyment rates remain high in most countries and in around two dozen countries are nearly universal. Perceptions of eating healthy also declined, often by a larger amount at the country level. In both instances, young people’s rising dissatisfaction with the food they eat was a major reason for this development. Interestingly, this growing sense of food dissatisfaction in some countries echoes a broader trend of unhappiness among young people, at least in certain regions.”

Nourishing Wellbeing: A Global Perspective on Food Enjoyment, Healthy Eating and Choices in Food: 2023 Edition Ando Foundation https://www.gallup.com/analytics/512390/eating-behavior-wellbeing.aspx

 

Population Health

FDA proposed rule on food labels: Last Tuesday, the FDA issued a proposed rule   that would require food manufacturers to put “Nutrition Info” labels on the front of their packages stating whether the food inside contains a high, medium, or low level of sodium, saturated fat, and added sugars.

For labeling purposes, a food would be defined as having a “high” level of saturated fat, sodium, or added sugars if the amount was equal to or greater than 20% of that nutrient’s recommended daily value (RDV). A “medium” level would be between 5% and 20% of the RDV, and a “low” level would be 5% or less of the RDV.

The rule would become effective in 3 years for food manufacturers with $10 million or more in food sales, and in 4 years for manufacturers with less than $10 million in sales.

The proposed rule will be open for comment  through May 16.

FDA Proposes ‘Nutrition Info’ Label for Front of Food Packages MedPage January 14, 2025https://www.medpagetoday.com/primarycare/dietnutrition

Prescription Drugs

FTC Report: PBMs mark-up drug prices: The three biggest pharmacy benefit managers (CVS Caremark, Express Scripts and OptumRx) made more than $7.3 billion over five years marking up the prices of specialty generic drugs for cancer, HIV and other conditions, the Federal Trade Commission charged on Tuesday.

It’s the second time the FTC has singled out CVS Caremark, Express Scripts and OptumRx for driving up drug costs. The report could provide fodder if President-elect Trump opts to make good on vows to crack down on pharmacy middlemen.

What they found: The PBMs marked up prices for specialty generic drugs by hundreds and sometimes thousands of percent over their estimated acquisition costs from 2017 and 2022 by reimbursing their affiliated pharmacies at a higher rate for the drugs than unaffiliated pharmacies.

The report builds off earlier findings the FTC released in July that found that the three major PBMs garnered nearly $1.6 billion in extra revenue on just two cancer drugs in less than three years by steering business to affiliated pharmacies.

Largest Pharmacy-Benefit Managers Hiked Up Drug Prices, FTC Says Investigation found overcharging for drugs used to treat cancer, HIV, multiple sclerosis and other diseases January 14, 2025 https://www.wsj.com/health/healthcare/largest-pharmacy-benefit-managers-hiked-up-drug-prices-ftc-says-8eb1cf47?mod=health_lead_pos1

 

Private Equity

·       Last week, the Justice Department sued private equity giant KKR for allegedly failing to file proper pre-merger notifications on nearly a dozen deals in 2021 and 2022, asking for a whopping $650 million in damages. KKR responded with a suit of its own, asking the court not only to say it followed the rules, but also that the FTC’s interpretation of pre-merger notification rules are “unconstitutionally vague.”

·       Prospect Medical Holdings has filed for Chapter 11 bankruptcy, just days after being scrutinized in a Senate Budget Committee report about private equity-owned hospital chains. PMH had been owned by Leonard Green & Partners until four years ago, with the firm telling Axios that it was “in strong financial condition” at the time.

 

Regulation

FTC, DOJ, HHS Report: Competition in healthcare: Last week, the three issued a report advising the incoming administration about ongoing concerns after receiving input from 2000+ individuals and organizations:

“It is clear from the commentors that the Agencies’ past actions have not sufficiently addressed the harms inflicted by anti-competitive activity in the health care sector, and more effective and vigorous antitrust enforcement is necessary to stop or reverse the trend of consolidation.” Areas of concern:

·       Private equity’s lack of transparency.

·       Provider consolidation.

·       Physician skepticism.

·       Vertical integration.

Federal report highlights private equity, consolidation concerns January 16, 2025 https://www.modernhealthcare.com/government/private-equity-consolidation-report-hhs-doj-