Last Friday (January 24), comedian Bill Maher offered a perspective on the murder of UnitedHealth Executive Brian Thompson on HBO’s Real Time with Bill Maher. With characteristic profanity-laced sarcasm, he assailed insurers, hospitals, drug companies, doctors and enablers as complicit in BT’s death because “the system” has abandoned any semblance of concern about caring for people.
“Shouldn’t we really be shooting hospital execs first? I mean, it’s only right” reasoning that people hate insurance agencies more than hospitals because “there are no shows glorifying them like Grey’s Anatomy does hospitals and doctors.” Maher continued: “I guess my question is: Why shoot just the insurance guy?” comparing the prominence and compensation of insurance, hospitals and drug company’ execs to the Corleone family of Godfather fame.
Outside attention to money, profits, prices, executive compensation and the notion of affordability in healthcare is unwelcome. What’s welcomed from outsiders is Top 100 recognition, presumption that ours is the world’s best system and acceptance that healthcare is uniquely complicated and therefore not comparable to any other industry.
Healthcare insiders now face an unwelcome reality: outsiders aren’t happy and they’re acting on their discontent. Outsiders–employers, consumers, community leaders, state and federal elected officials, news organizations and even volunteer members of non-profit healthcare organizations– believe systemic reform is needed. Recent polling by Hart and KFF indicate increased transparency about healthcare prices is their starting point: they’re worried about affordability but don’t think insiders care.
Reality check:
Healthcare spending in the aggregate and the concept of “healthcare prices” are problematic: even after adjusting for population growth and aging, total health spending is increasing faster. It’s reached 17.6% of the Total GDP and is the biggest industry in our economy. Since 1967 when BLS began collecting this data, the CPI for all items increased 868.95%. Housing is up 1000.35% and medical care is up 1975.81%. But prices tell a different story: since the pandemic, healthcare spending has increased slightly less than other spending categories (All items Index up +22.40% vs. +14.23 for medical care services 2019-2024). But facts and perception are different, especially in healthcare. Maher asked “if a retailer advertises 80% off…but off what?” to prosecute healthcare pricing as a ponzi scheme to disguise profiteering and price gauging from unknowing patients.
Anger against the health industry is understandable: it is prone to self-flattery, a growing cadre of celebrity CEOs and deep pockets to maintain its influence and power. Its trade groups focus on the issues de jour facing their members i.e. unwelcome regulation, Trump Health 2.0 tariffs et al. The case for transformational change is understood but staying alive is their order of the day. Rants like Bill Maher’s, and unflattering reports about performance are dismissed as unfair or ill-informed due to inaccurate data.
In healthcare, making the case that its costs and prices are reasonable is a heavy lift, especially since the industry’s anti-transparency advocacy efforts have frustrated policymakers and frustrated consumers.
Looking ahead, this week, RFKJ will begin his HHS Secretary confirmation in the Senate. Makary and Oz will quickly follow as the Trump Healthcare 2.0 team takes charge. The backdrop for these hearings is unprecedented: they promise sacred cows will be slain and new rules put in place.
Like Bill Maher and the majority of outsiders, they think the system stinks. Healthcare—every sector– needs to fresh start with outsiders. Transparency means more than posting charges, discounted prices, out-of-pocket estimates and premiums. It about underlying direct and indirect costs, margins, how leaders are compensated, how clinical processes and clinical decisions are made, how clinician performance is measured, how denials are adjudicated, how consumers are heard, how non-financial results matter to the organization and much more. That’s a start.
Paul
PS: See citations below used for my commentary today.
Resources
Sections to today’s report
- Quotables
- Economy
- Hospitals
- Insurers
- Physicians
- Polling
- Prescription Drugs
- Public Health
Quotables
Berwick et al on principles of systemic reform: “We fully recognize that many of the changes we counsel, such as raising Medicaid payment rates and increasing investments in primary care, will require increased spending initially. Our proposed path forward is impossible unless Americans take equally seriously the need to stamp out price gouging and waste. Administrative pricing will need to be more actively used, high prices for specialty services will need to be reconsidered, health plan games such as upcoding in Medicare Advantage will need to be ended, predictable global payments will need to replace much of fee-for-service payment, useless administrative complexity will need to yield to simplification, and much more thorough price transparency will be required so that authentic competition can emerge. Profiteering in its many forms must be made unacceptable and, indeed, illegal…
Because of the persistent failure to prioritize patient and societal well-being, the United States lags far behind its peers in key measures of health and wellness, and its health care spending imperils its economic future. Americans spend by far the most in the world but do not have the best care as a result—not even close. Incremental reform has failed in the past and will not work in the future. Only a systemic transformation can achieve the goals of equitable, accessible, affordable, and high-quality health care for all Americans. The essential ingredient is sufficient shared will. Together, the United States can build a health care system that truly serves its population without forcing them to choose between health and other needs. Why should Americans not, as a nation, have health and health care that stand as a model of excellence for the world?”
Keckley Note: The authors of this exceptional monograph offer 7 guiding principles for system reform that many will think impractical, too aggressive or too expensive. They acknowledge transformational change is difficult in U.S. healthcare because incumbent companies and their trade groups focus almost exclusively on protecting their revenues and fending off regulations that threaten their power and influence.
AHA advocacy strategy: “…on offense we’re advocating to extend the Marketplace Premium Tax Credits to ensure millions of Americans can continue to access health insurance; boost programs that support access to care in rural communities; and provide relief from burdensome policies that take caregivers away from providing patient care and increase costs. On defense, among other issues, we’ll need to prevent significant reductions to Medicaid and Medicare funding that would jeopardize access to hospital care and services; protect the 340B Drug Pricing Program from harmful changes; and preserve not-for-profit hospitals’ tax-exempt status so they can continue providing community benefits tailored to their communities’ unique needs.”
Rick Pollack, President and CEO, American Hospital Association AHA Today January 24, 2025
Politico on AHA Advocacy Strategy: “Hospitals have their asks for the incoming Congress: But they could face challenges amid a Republican trifecta. The American Hospital Association, an influential industry group for hospitals nationwide, laid out a list of costly priorities for the year. Among the priorities:
- Extend premium tax credits on the Health Insurance Marketplace.
- Reject site-neutral policies that would result in equal payments for the same service, regardless of the type of facility where it takes place.
- Guard government insurance programs, such as Medicare or Medicaid, and current reimbursement levels for providers.
- Boost the clinical workforce.
But Republicans’ focus on cutting federal spending could spell trouble for those goals. Tax credits for insurance would add $335 billion to the deficit from 2025 through 2034, according to a 2024 Congressional Budget Office review, a cost that makes extending credits unappealing for some GOP lawmakers.
Similar cost-savings motivations have led some Republicans to look to Medicaid or other health programs for cuts. Measures to build the clinical workforce have often been bipartisan, but more ambitious legislation has at times faced hurdles because of costly initial price tags. And site-neutral policies have found a favorable audience among some in the GOP because of the potential for significant savings.
Why it matters: The financial well-being of hospitals is essential for both patient access to care and state and local economies. But hospital spending is a major cost for the U.S. health system, and policymakers are increasingly motivated to reduce it.
Even so: Some hospital leaders have argued that investment in the health system will save money because a weak health system can cause patients to put off care until it’s far more costly. Likewise, labor shortages can make doctors and nurses more expensive for the system overall.”
The AHA’s costly wish list – POLITICO
Modernizing public health: “Advances in the implementation of evidence-based public health measures have been instrumental in extending populations’ lifespan and ‘healthspan’. However, despite unprecedented medical progress in the US, aiding in the development of effective diagnostics, treatments, and vaccines, recent trends demonstrate the need to update and revitalize the infrastructure to protect the population’s health. The nation has seen declining life expectancy,1 pervasive health disparities,2 and the emergence of novel health risks. Public health—the foundation of disease prevention and population wellness—remains underfunded and outdated. Public health’s core capabilities are not on track to address a wide range of health threats, including communicable and noncommunicable diseases, public health emergencies, and the effects of social drivers of health…
The nation’s public health challenges underscore the urgent need to optimize the US public health workforce and encourage collaboration…
…The next four years present an opportunity to apply lessons learned from promising federal policy reforms to support collaborative state and local models to advance public health, improving health outcomes for all people across the nation.”
Updating US Public Health for Healthier Communities | Health Affairs
AJMC on Trump Health Policy: “In his first hours as the 47th president of the United States, Donald Trump initiated an effort to rescind Biden administration policies, ranging from scaling back Affordable Care Act (ACA) provisions to withdrawing from the World Health Organization (WHO) and rescinding drug pricing initiatives. These executive orders reflect a sharp pivot in federal health policy, with the president’s swift policy reversals raising concerns among public health experts and advocates about the future of pandemic preparedness, health care equity, and cost-saving reforms.”
Executive Orders Suggest Swift Pivot in Managed Care and Health Policy
The Economist on Dry January: “…Drinking a lot is indisputably bad for you. Boozing has long been associated with heart attacks, liver disease, stroke and obesity. Drunks are more likely to get into fights or accidents. Alcohol is addictive, and the World Health Organisation (WHO) blames it for about one death in 20 around the world. The link with cancer is less familiar to most people. Dr Murthy’s statistics suggest that women who drink occasionally have about a 16.5% lifetime risk of several common cancers, whereas those who have one drink a day—America’s recommended maximum—have about a 19% chance.
As the evidence of alcohol’s harms has piled up, the public-health messages have become starker. The WHO says flatly that there is “no safe level” of alcohol consumption. America’s guidelines say that those who do not drink should not start “for any reason”. In 2023 Canada published guidelines recommending two drinks (roughly two cans of beer) a week for those who want to remain in the “low risk” category, down from 15 a week for men and ten for women.
It is all very sobering. But over-zealousness can be counter-productive… And although there is unanimity that heavy drinking is very bad for you, there is less agreement around light indulgence…
Many scientists think that the benefits of light drinking are a statistical mirage. But even if the WHO is right, and no amount of alcohol is safe, that is only half the picture. After all, there is no completely safe level of almost anything…”
Health warnings about alcohol give only half the story
Economy
Housing market down in 2024: ‘U.S. existing-home sales fell in 2024 to the lowest level since 1995, the second straight year of anemic sales due to stubbornly high mortgage rates.
High costs related to homeownership sapped sales again. The average rate for a 30-year fixed mortgage has hovered between 6% and 8% since late 2022, making it prohibitively expensive for many Americans to buy homes at current prices, which hit record highs last year. Rising home insurance and property tax costs are also adding to homeowners’ expenses. Unlike mortgage rates, which fluctuate, these costs are poised to continue rising…
The number of sales is also down about a third from the more than six million homes that sold in 2021, when the market was booming due to low mortgage rates and pent-up demand after the first year of the pandemic…
The national median existing-home price in December was $404,400. That is down from the record high of $426,900 reached in June but represents a 6% increase from December 2023, NAR said…Nationally, there were 1.15 million homes for sale or under contract at the end of December. That was down 13.5% from November and up 16.2% from December 2023.”
U.S. Homes Sales in 2024 Fell to Lowest Level in Nearly 30 Years – WSJ
CPI: 2019 (pre-pandemic) vs. 2024: Per the BLS: Prices for All Items, 2019-2024 ($20): prices for all items are 22.70% higher in 2024 versus 2019 (a $4.54 difference in value).
Between 2019 and 2024: All items experienced an average inflation rate of 4.18% per year. This rate of change indicates significant inflation. In other words, all items costing $20 in the year 2019 would cost $24.54 in 2024 for an equivalent purchase. Compared to the overall inflation rate of 4.18% during this same period, inflation for all items was similar. In 2019: Pricing changed by 1.81%, which is below the average yearly change for all items during the 2019-2024 time period. Compared to inflation for all items in 2019 (1.81%), inflation for all items was similar:
| Category | % Impact on Total CPI | Unadjusted % Change ’23- ‘24 | Unadjusted % Change ’19- ‘24 |
| All items | 100.00 | +2.9% | +22.40 |
| Food | 13.48 | +2.5% | +27.85 |
| Energy | 6.44 | -0.5% | +29.84 |
| All items less food & energy | 80.08 | +3.2% | +21.19 |
| Shelter | 36.71 | +4.6% | +25.94 |
| Medical care commodities
Prescription drugs Non-Prescription drugs |
1.45
0.89 0.44 |
+0.5%
+1.1% -+4.12 |
+8.27
+8.14 +14.07 |
| Medical care services
Physician Services Hospital + related Services Health insurance |
6.54
3.63 2.33 0.59 |
+3.4%
+1.3% +4.0% -5.59% |
+14.23
+9.06 +23.08 -7.92 |
| Median Household Income | 80,020 in ‘24 | +7.84% | +16.5% |
Consumer Price Index Summary January 15, 2025 https://www.bls.gov/news.release/cpi.nr0.htm
Hospitals
Gibbons: Hospital restructuring in 2024: Gibbins Advisors’ 2024 report of healthcare sector Chapter 11 bankruptcy filings for cases with liabilities exceeding $10 million. “The year saw the second-highest level of healthcare bankruptcy filings in the past six years (2019-2024), with filings decreasing by 28% from the peak in 2023. The year saw the second-highest level of healthcare bankruptcy filings in the past six years (2019-2024), with filings decreasing by 28% from the peak in 2023.”
There were 57 healthcare bankruptcy filings studied in 2024, down from 79 in 2023, but exceeding the 2019-2022 average of 42 filings per year.
Consistent with previous trends, the Senior Care and Pharmaceutical subsectors comprised almost half of the healthcare bankruptcies filed in 2024. Clinics/Physician Practices bankruptcy filings reached their highest level in six years, with 10 cases in 2024 compared to an average of just four per year from 2019 to 2023. Bankruptcy activity in this subsector, along with Medical Equipment and Supplies, has shown steady growth since 2021.
In the hospital sector, there were five bankruptcy filings in 2024, down from a high of 12 in 2023. However, one case in 2024, Steward Health Care System, which includes 31 hospitals, represents the largest hospital sector bankruptcy in the last 30 years.
The healthcare sector continues to face financial headwinds, with some organizations better equipped to meet those challenges than others. “
Healthcare Sector Bankruptcy Filings in 2024 Reach Second-Highest Level in Six Years
Study: ED Usage: Researchers analyzed 2023 data from Epic Cosmos based on patients at 1,500 hospitals: nationwide.
- 1% of hospital emergency room patients left without being seen in 2023.
- Of the patients who left without being seen, 13.2% arrived via an emergency medical service and 55.2% had private insurance.
- An estimated 18.5% of patients who left without being seen returned to the ED at least once in the next 7 days. About 0.19% were admitted to the ICU, and 1.63% were admitted to the hospital. Researchers reported a median time interval from leaving to returning of 46.6 hours, and just over half (58.3%) returned to the same place they initially left.
- They also found in a secondary analysis that 28.4% of patients who left without being seen had at least one return visit in the following 30 days.
Many who leave emergency rooms without being seen return within a week
Insurers
Study: association of MA dental benefits and oral health: Researchers analyzed the attributes of Medicare Advantage (MA) dental benefits that facilitated improved oral health among enrollees. Findings: “In this cross-sectional study of 1789 MA enrollees with 12 months of dental benefits, variations in dental plan benefit attributes were associated with differences in unmet dental need, financial barriers to dental care, and dental care use. Results of this study suggest that less restrictive plan benefit design may be associated with better access to dental care and lower rates of unmet dental needs among MA enrollees.
“Traditional Medicare (TM) does not cover dental services except for patients in need of medically necessary procedures such as tooth extractions to treat mouth infections prior to cancer treatment. The landscape is more complex when we look at how Medicare Advantage (MA) plans address dental care. While MA enrollment has grown, with more than half of Medicare beneficiaries enrolling in MA as of 2023, the percentage of MA plans offering dental coverage has also increased. From 2020 to 2024, the percentage of MA plans offering coverage for preventive dental care services (e.g., checkups, cleanings) increased from 75% to 90% while those offering comprehensive dental care services (e.g., restorations, root canals) increased from 50% to 85% of plans…. However, evidence suggests that having dental coverage via MA has little impact on dental outcomes…”
Marketplace enrollment in 2025: Last Friday, CMS announced that a record 24.2 million consumers enrolled in health insurance through ACA health exchanges during the 2025 Marketplace Open Enrollment Period between Nov. 1, 2024, and Jan. 15, 2025. This figure includes 3.9 million new consumers.
Over 24 million Consumers Selected Affordable Health Coverage in ACA Marketplace for 2025 January 17, 2025 https://www.hhs.gov/about/news/2025/01/17/fifth-snapshot-marketplace-open-enrollment
Physicians
Study: Private equity in primary care: The study analyzed 198,097 primary care physicians, in 2022– half were hospital-affiliated. Findings:
- From 2010 to 2016, the share of primary care physicians (PCPs) affiliated with health systems increased from 28% to 44%.
- Relative to independent PCPs, negotiated prices for office visits were 11% higher for hospital-affiliated and 8% higher for PE-affiliated PCPs.
- Relative to independent PCPs, negotiated prices for office visits were $14.91) or 10.7%higher for hospital-affiliated PCPs (P < .001) and $9.56 or 7.8% higher for PE-affiliated PCPs.
Growth of Private Equity and Hospital Consolidation in Primary Care and Price Implications JAMA Health Forum. 2025;6(1): e244935. doi:10.1001/jamahealthforum.2024.4935
Polling
Arnold Ventures Hospital Price Survey conducted November 11-13, 2024: Among registered voters, these were the top 5 issues based on a 0 to 10 scale with 10 indicating the highest priority:
| % High Priority
(8-10) |
% Low Priority
(0-3) |
|
| Combat inflation and high prices | 84 | 1 |
| Reduce healthcare prices | 71 | 2 |
| Reduce healthcare costs | 69 | 3 |
| Strengthen the border | 60 | 10 |
| Reduce the budget deficit | 59 | 4 |
In the same poll, respondents indicated how responsible each is for the problem of high healthcare prices:
| % Very/Fairly | % Somewhat/
Little/Not at all |
|
| Health insurance companies (11/24 v. 4/21) | 81 v. 84 | 16 v. 16 |
| Pharmaceutical companies (11/24 vs. 4/21) | 81 v. 88 | 17 v. 12 |
| Hospitals (11/24 vs. 4/21) | 70 v. 78 | 28 v. 22 |
| Wall Street Cos. that Own Physician Practices (11/24v4/21) | 67 v. 78 | 24 v. 22 |
| The Federal Government | 64 v. 72 | 31 v. 28 |
| Doctors | 47 v. 51 | 50 v. 49 |
| Not for Profit Hospitals (11/24 only)) | 23 | 65 |
Other findings in the poll:
- “Considering the care that hospitals provide, would you say that the prices charged by hospitals are generally reasonable or unreasonable?” 25% reasonable vs. 71% unreasonable
- “In the past couple of years, would you say prices charged by hospitals have gone up, stayed about the same, or gone down?” 80% gone up vs. 2% gone down
- “From what you know, how do the prices charged by nonprofit hospitals compare with the prices charged by for-profit hospitals?” Lower 25% (11/24) vs. 40% (2/23). About the Same: 26% (11/24) vs. 51% (2/23), Higher 8% (11/24) vs. 9% (2/23) and not sure 40% (11/24)
Arnold Ventures Hospital Price Transparency Survey 2024 www.arnoldventures.org
KFF Poll: Trump health priorities: Per the KFF Health Tracking Poll (Jan. 7-Jan. 14, 2025: “As President-elect Trump takes office on January 20th with Republican majorities in both chambers of Congress, the public is sending mixed messages on how they prioritize key components of the Trump administration’s health agenda. While Americans across partisanship largely embrace prioritizing increased regulation and oversight such as boosting price transparency rules and setting stricter limits on chemicals in the food supply, there are other aspects of the Republican agenda the public does not support – most notably, reducing federal funding to Medicaid.”
- 61% say boosting price transparency rules to ensure health care prices are available to patients should be a “top priority,” and 58% say the same about setting stricter limits on chemicals found in the food supply (58%). Note: Of 11 policy priorities in the poll, price transparency was rated the highest priority: 57% expect their healthcare to be less affordable, 26% to be about the same and 17% more affordable.
- 82% of Americans hold favorable views of Medicare and 77% hold favorable views of Medicaid—consistent with KFF polling since 1970. Notably, Medicare polls slightly above Medicaid in all age, racial, partisan and income cohorts.
- 60% say the government is spending “not enough” on the prevention of chronic diseases or prevention of infectious diseases and preparing for future pandemics (54%).
- 45% say the government was spending “not enough” on biomedical research vs. 38% “about the right amount.”
- 55% say more closely regulating the process used by health insurance companies when they approve or deny services or prescription drugs is a top priority.
- Re: the Inflation Reduction Act, 55%) say expanding the number of prescription drugs subject to Medicare price negotiation should be a top priority, twice the share who prioritize rolling back this provision (28%).
- Re: the ACA, 32% think extending the enhanced subsidies for people who buy their own health coverage while a quarter of the public (27%) say repealing and replacing the ACA is a top priority.
- 23% think changing recommendations for fluoride in local water supplies should be a “top priority,” which is identical to the share who say it should not be done.
- 15% say reducing federal funding to schools that require vaccinations, limiting abortion access (14%), and reducing federal funding on Medicaid (13%) should be top priorities. At least four in ten of the public say each of these “should not be done”
Americans mixed on potential Trump healthcare priorities: KFF poll https://www.healthcaredive.com/news/americans-mixed-trump-healthcare-agenda-medicare-medicaid-aca-kff/737736/
Prescription Drugs
Round Two: Medicare drug price negotiation: Last Friday, Centers for Medicare & Medicaid Services (CMS) released the list of 15 drugs for the second round of price negotiations ahead of the Feb. 1 deadline. After targeting drugs that were heavily utilized by Medicare beneficiaries in the first round of negotiations, the second round skews toward higher-priced, lower-utilization drugs. Seven of the selected drugs are utilized by 35,000 or fewer enrollees. These drugs include treatments for chronic conditions such as Type 2 diabetes and asthma, as well as some cancer medications. As expected, Novo Nordisk’s blockbuster GLP-1, which is heavily utilized and costly to CMS, was selected for this round’s list.
CMS https://www.cms.gov/newsroom/press-releases/hhs-announces-15-additional-drugs-selected-medicare-drug-price-negotiations-continued-effort-lower
Public Health
Study: Life expectancy differences by ethnicity: Context: “Nearly two decades ago, the Eight Americas study offered a novel lens for examining health inequities in the USA by partitioning the US population into eight groups based on geography, race, urbanicity, income per capita, and homicide rate. That study found gaps of 12·8 years for females and 15·4 years for males in life expectancy in 2001 across these eight groups…
Findings: We defined the ten Americas… Large disparities in life expectancy between the Americas were apparent throughout the study period but grew more substantial over time, particularly during the first 2 years of the COVID-19 pandemic….
Our analysis confirms the continued existence of different Americas within the USA. One’s life expectancy varies dramatically depending on where one lives, the economic conditions in that location, and one’s racial and ethnic identity. This gulf was large at the beginning of the century, only grew larger over the first two decades, and was dramatically exacerbated by the COVID-19 pandemic. These results underscore the vital need to reduce the massive inequity in longevity in the USA, as well as the benefits of detailed analyses of the interacting drivers of health disparities to fully understand the nature of the problem.”.
Ten Americas: a systematic analysis of life expectancy disparities in the USA – The Lancet
Opioid Addiction Lawsuits: Purdue Pharma’s owners from the Sackler family have struck a new $6.5 billion settlement of mass litigation alleging they fueled addiction, reopening a path to end the longest and costliest corporate bankruptcy case stemming from the U.S. opioid crisis. The Sackler family members won’t receive a blanket shield from liability from civil lawsuits, the main point of contention in a previous agreement that was struck down by the U.S. Supreme Court last year.
Related: Last Tuesday, a group of Chubb insurers said they have no duty to defend or indemnify McKinsey & Co. in more than 260 suits accusing the management consulting firm of contributing to the opioid epidemic, telling a Delaware state court that the underlying suits do not seek damage “because of” bodily injury. The underlying suits alleged that McKinsey, through its consulting work for opioid manufacturers like Purdue Pharma LP, developed a marketing scheme to maximize the sale of prescription opioids despite knowing that the increased availability of opioids was contributing to higher levels of death, addiction and misuse. The opioid plaintiffs further claimed that McKinsey’s efforts tripled Purdue’s sales of OxyContin in the United States between 2007 and 2010, even after the pharmaceutical giant pled guilty to deceptive marketing practices in 2007. “McKinsey has paid nearly $990 million in settlements to resolve the suits — including $641 million to state attorneys general and $207 million to government subdivisions — and continues to incur defense costs in ongoing cases.”
Purdue Pharma’s Sacklers Agree to New $6.5 Billion Deal for Opioid Lawsuits – WSJ
15 States Reach $7.4B Settlement With Sackler Family – Law360
McKinsey Not Covered For Over 260 Opioid Suits, Chubb Says – Law360
