2025 Healthcare Policy Predictions

2024 shook up the healthcare world, and 2025 is gearing up to be just as transformative.

With big changes coming from the new Administration, the AI boom taking healthcare by storm, and the rapid rise of GLP-1s, next year is shaping up to be a wild ride.

Join David E. Williams and John Driscoll on CareTalk as they dust off their crystal ball and explore what’s in store for healthcare in 2025!

This episode is brought to you by BetterHelp. Give online therapy a try at https://betterhelp.com/caretalk and get on your way to being your best self.

As a BetterHelp affiliate, we may receive compensation from BetterHelp if you purchase products or services through the links provided.

TOPICS
(0:30) Sponsorship
(1:50) Thank You to Our Audience
(2:47) Predictions for GLP-1s
(8:28) The Rise of AI in Healthcare
(12:12) How the New Administration Will Affect Public Health
(15:05) Healthcare on the Defense
(18:54) Boosting Primary and Value-Based Care
(22:06) The Growth of the Healthcare Market

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CareTalk is a weekly podcast that provides an incisive, no B.S. view of the US healthcare industry. Join co-hosts John Driscoll (President U.S. Healthcare and EVP, Walgreens Boots Alliance) and David Williams (President, Health Business Group) as they debate the latest in US healthcare news, business and policy.

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Transcript

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Well, 2024 has sure been a whirlwind year for healthcare and 2025 promises to be a wild ride with a new administration, growth of AI, and the continued march of GLP-1s. So we've polished off our crystal ball for a clear-eyed look at the year ahead. And John, we were going to do five predictions, but since you have a sixth sense, we decided to add a sixth one as well. Welcome to Care Talk, America's home for incisive debate about healthcare business and policy. I'm David Williams, president of Health Business Group. And I'm John Driscoll, the chairman of Waystar. You know, John, for some people, wrapping up in a blanket with a mug of hot chocolate or luxuriating in a hot tub with their family is the best way to spend the month of December. But for others, it's making a list for Santa Claus or dreaming up New Year's predictions. Now, speaking of comfort, therapy is a great way to bring yourself peace. that never goes away even when the season changes. While BetterHelp offers entirely online therapy, it's designed to be convenient, flexible, and tailored to fit your schedule. You just fill out a brief questionnaire and get matched with a licensed therapist, and you can switch therapists at any time for no additional charge. It's really helpful for learning positive coping skills and how to set boundaries, and it empowers you to be the very best version of yourself. So whether you're dealing with stress, anxiety, or just seeking personal growth, BetterHelp connects you with a licensed therapist who can support you on your mental health journey. Make it a great season with BetterHelp and visit betterhelp.com slash care talk to get 10% off your first month. That's betterhelp, H-E-L-P, dot com slash care talk. Now, John, we've reached the end of another year of care talk, and I have to say it's been as rewarding as ever. I'd really like to thank everyone in our audience for devoting a substantial portion of your week to us. I've really been heartened by all the comments we received this year and the suggestions. And we read every one and we use a lot of them for upcoming episode topics and guest ideas and for John and me to The audience has been great, David. I mean, the audience is really very much more engaged this year. So we really, big thank you to everybody. John, I think you like that because a lot of the comments come in in support of your positions for whatever reason. Or they attack my criticism of you, but it's all good. What I love is that people are really taking the serious stuff that we try to make a little less serious seriously. And that level of direct engagement, we really appreciate. So really, thank you listeners everywhere. So David, what is prediction number one on your list? John, prediction number one is that we're going to see a GLP-1 ecosystem emerge. And we talked about the GLP-1 drugs, but there's going to be a whole bunch of companies that form around this. This is so transformative for the health care system as a whole that we're going to see yet. So what am I talking about in ecosystem? I'm thinking about things like remote monitoring, real-time data collection that's going to track outcomes and make sure. that we're actually getting the value out of GLP-1 therapies that are out there. And there's been a lot of things out there, John, that really sound good in the wellness category. And the fact that the GLP-1s are out there make it possible. So we've heard a lot. We've talked about things like food is medicine. And if you look at these, even the biggest companies like Nestle, they're going and they're relabeling or they're actually launching new lines of frozen meals that are GLP-1. Let's be honest. Remember, these are the GLP ones, the injectable therapies that are appear to be a miracle drug in terms of losing weight and people taking control of their metabolic disorders. And that's certainly a miracle drug for Lillian Novo, who are making gajillions of dollars by overcharging the United States, literally charging the United States consumer and health care system 10 times what they charge the English customer. But they are. revolutionary drugs and we are in the midst of an obesity and diabetes epidemic. So I think it's really exciting David, but what's the value of the ecosystem? Are these just minnows jumping onto the drug whales here? What is the value of that ecosystem if it develops and why do you think it's going to happen now? Yeah, John. So, I mean, let's talk about the minnow example. So if you think about like Apple, you know, they got the iPhone and they make billions and billions of dollars on that. And there's companies, you know, that make cases or little little accessories for it and they do okay on their own, they don't really fundamentally change your experience with the iPhone. Now I think with GLP-1 it's going to be different. As you're mentioning, it's injectable. Okay, so people don't love that part of it, but they love what they get out of it in terms of their whole life. And so when you think about, you know, it doesn't replace eating food. So if you can have a Nestle frozen dinner or there's other companies, you know, that are really focused on the food as medicine like Noris Star X. And you see that this is now an enabler, right? Because diet alone, exercise alone, drugs alone, behavior alone don't work. When you put it all together, the ecosystem then can translate into the lifestyle, not just the weight loss and sustainable weight loss, but actually feeling better and living life better. So the reason that's going to happen now, John, is that this chemical part of it, the GLP-1, really is important. And it enables these other good ideas in terms of diet, exercise. wellness behavior to actually work and for people to get the sustained results. That's why it's going to happen now. Painful though it may be for me to agree with you, David. I do here because I think one of the things about the GLP ones are those drugs are very effective at tamping down appetite and slowing down the processing of food. But up against the army of companies like Nestle that are marketing positioning. Food never looks so sexy and attractive as it does on an internet ad or on television. a lot of the food that we're eating is heavily processed. There's too much sugar. There's too much salt. So up against that, the opportunities to do cognitive behavioral therapy or to have a digital cue or to change lifestyle or to have food as medicine like a... You know, you're gracious enough to mention my wife's company, NourishDirects, but there's a whole, they may be one of the first, but there's an entire explosion of companies that are focused on food as medicine, making the point that if you get the food right, the medicine doesn't need to follow. I think it's that, and the scale of this growth is really stunning. I think one of the companies has about a $40 billion revenue line right now that's gonna go up by like, I mean, the scale of the growth here because of the demand and probably because they're overcharging us is amazing. so around that, I think all of the other programs which are costless are kind of necessary to make the changes. But this is really, I mean, we're at a revolutionary moment, I think, with these drugs. If we cue the population right to it, I think to really changing the arc of health in America, it's pretty exciting. And John, this wasn't the main point of the prediction, but because it's focusing on the weight loss ecosystem. However, as we have mentioned in previous episodes, the GLP-1s are starting to be looked at for other indications beyond diabetes and weight loss for addiction, neurodegenerative diseases, kidney disease, sleep apnea, cardiovascular disease. And so to the extent that those are successful, and many people comorbid, this is going to... potentially expand the ecosystem dramatically. So I think 2025, you're to see a lot here, but it's not going to be a flash in the pan. I wouldn't imagine. And I think it's not just going to be wellness for the wealthy. I think you really have an opportunity to change, to really improve the health and welfare of a lot of very vulnerable populations. So we've got to watch that as well to make sure this is not wellness for the rich and wellness, but wellness for all of us. John prediction number two is that AI's impact is going to increase in medicine, artificial intelligence. And I think what we're going to see is an increase in things like diagnostic accuracy, especially with areas that are quite quantitative like radiology or places that can use imaging also like dermatology, pathology. You're going to reduce human error and enable the ability to look at all the data that's out there as opposed to just sort of like what's top of mind. AI is great at processing all the information that's out there. And also we're to have more passive monitoring devices that are going to use AI for things like monitoring chronic disease and having early detection. This is things like wearable devices, including your watch that is going to be able to see, is something coming on? And can we head it off as opposed to wait until somebody collapses and call an ambulance? Yeah, I mean, the thing that I think that people are sometimes missing is AI on its own. is just is still promise. But if you can integrate it into data and the great thing about health care is there's data everywhere. You can actually provide intelligence at the point of decision insight at the point of care support for clinicians that can really give them a superpower and extend their ability to do more more intelligently faster. I think that the most important thing to think about I think about AI is that if it if it works as we expect. it's going to be integrated into everything. So I think the insight for folks in healthcare is how do I understand, deploy and use AI in everything I'm doing right now? It's not AI over there. It's really AI in the same way the internet and information on the internet. And honestly, the hardware and software revolution has been integrated into every aspect of healthcare. think that's going to be the way that AI helps rewire our systems because I think everyone's going to be dependent on it. So it's going to be important as people start to see those positive use cases where whether it's in the dermatology or radiology that better decisions are happening faster, more consistent insights are happening sooner that they get integrated into workflow because that's really where it's going to make a difference for patients. But I think it's more AI everywhere than AI as sort of an individual platform in health care. Very fair, John. And I think there's the clinical use cases, which we were talking about, and there's also the administrative side where there's a lot of hassles, a lot of burdens, things like prior authorization, medical coding, documentation. And so there's an opportunity for AI to help to free up the clinician to do more of the work that they want to do and less of the drudgery. Now, the thing is these are employed all over the place, the AI, and so you can also have AI know, frictions, new ones coming, let's say, from a payer, if you were a provider. And I think one of the things to expect in a prediction, I'll say, for 2025 is a battle of the bots as the payer and provider AI kind of joust with one another. I don't think that's terrible. I think it's probably better to have that than that human's doing it. Yeah, perhaps. Although that would suggest that we're not going to reduce the administrative burden. We're just going to extend the wealth transfer from legacy healthcare to novel Silicon Valley. So I'm hoping that's not where we land. I'm hoping that both sides can as be part of a de-escalate the bureaucratic arms race to slow down or speed up payment. Well, that may be our 2026 prediction, but let's start with the bots getting out on the battlefield for 2025. Okay. Number three, John, is that the new president Trump and his nominees do some good. come on, David. You always say that. But also cause real damage to public health. so what could be positive? Because we like to start on the positive side. So positive side could be stronger focus on chronic disease prevention and some deregulation that might reduce bureaucracy and allow more innovation. So that's the positive side. The negative side is the kind of rolling back the clock. You know, we say make America healthy again, make America great again, you know, make America scared of polio again. Make America stupid again. I mean, like, come on, David, we know better than this. I mean, there are some positive notes. Like our guest, Marty Macri, has great ideas and insights on actually making sure that science and fact-based insights are part of any decision. and they aren't part of some bureaucratic long-term. they're long-term or ideological or a fixed mindset. He's all about a fact-based mindset. I mean, he's a step in the right direction. I think it's gonna be really interesting to see what Mehmet Oz does at the Center for Medicare and Medicaid Center, driving and really supporting health and wellness in the Medicare and Medicaid populations. But David, I'm a bit of a skeptic on RFK Jr., who's more than a bit of a skeptic about a lot of things that are fact and science based. And so in that back and forth, I think it all will center around whether RFK Jr. as the most senior health care executive on the administration gets through. I'm more mixed on that. But there's no question that this emphasis on a healthier food and a healthier population, hopefully, will take root, not just in the Trump administration, but as part of healthcare in general. So if RFK Jr. is confirmed and if he continues to put forward his views on vaccines, I predict that there will be one or more significant measles outbreaks in 2025. Remember that when the city of Philadelphia, think less than a decade ago, maybe a bit longer, started to allow for more and more religious and personal exemptions from taking vaccines in schools. They actually had a measles epidemic and measles, it's an ugly disease. And in countries that do not have the MMR vaccine that are not traditionally vaccinated outside of the US, we lose about 140,000 children a year to death. And so I think that this is a, I think that that prediction is, it's sort of an if-then prediction, but I'm with you. So John, number four, continuing into the dark spaces here is that the murder of the United Healthcare Executive is going to cause healthcare executives to go on defense. And that means that organizations are going to prioritize executive security, personal security, invest in enhanced security measures and crisis response protocols. That's, think, happening already. You're going to also see, I think, a cultural shift toward more public facing transparency. But the underlying business models, as far as I can tell, are likely to remain unchanged. You know, I think that's basically, sadly, correct. The cowardly murder of an innocent executive, even in a system that's failing a lot of Americans, the fact that people is going to change the way executives think about security and the health care business. And that's just a sad kind of a miserable truth. There is also though in this deep under, there's deep sincerity in the undercurrent of antipathy towards health insurance and the bureaucracy, the casual bureaucracy that gets in the way of a lot of vulnerable people who do need to get better access to care. And frankly, the excess administrative burden that many managed care companies layer onto clinical workflow. there's a, think we are at an interesting cultural moment and I might be, I might be more of a, less of a skeptic that nothing will change. There's some real significant bipartisan pushback on the PBMs. I think I wouldn't be surprised if you see more bipartisan legislation aimed at trying to make it easier for clinicians to get paid for services. appropriate services that they're providing to their patients. There was a lot of movement on the regulatory side to simplify and automate prior authorizations. What that led to is the insurance companies offing more claims and then denying them after the services were rendered. I think that kind of behavior is just not going to be tolerated by patients and increasingly by politicians. So John, I'll add another little piece here that I'm more certain of than this measles outbreak. which is that this murder is gonna have no impact on gun regulations, including on ghost guns. No, mean, sadly we are a gun country, a gun culture, and I think what we really have to focus on are those areas where 70 % of the American population believes in background sex, 70 % of the American population believes in increased safety measures, 70 % of America believes that there are very few public spaces where... people should be open carrying and be able to provide or support the automation of otherwise single shot weapons. so that we hopefully, and you're starting to see it actually in red states and blue, there was some really positive legislation post some of those awful massacres in Florida in a very conservative state. And so while I don't think we're gonna deal with it at the federal level, I wouldn't be surprised if you see. more success at the state level around some of these initiatives. There's just too many people dying from gun deaths in the United States right now. So John, in terms of our predictions, we made them a little bit like a sandwich. So the first couple are kind of positive. know, GLP-1, AI, those are good. And then we've kind of gone a little dark with the new administration and this murder. Our last two are actually fairly positive and optimistic. And I like this one, number five, which is that primary care and value-based care gets a boost. We've focused a fair amount on primary care. What I see happening is twofold. One is that the major health plans expand their value-based care initiatives, and that is going to help to bolster primary care, either directly or because they may actually buy practices. And the second one is about direct primary care, where you say, you know what? Insurance doesn't pay that much for it anyway. There's a lot of this hassle, as we've just discussed before. Let's actually have a more direct, simple way where the the doctor is basically treating the patient and being paid by the patient or by their employer directly. So those couple of things in primary care. How are you seeing it, John? No, I think that's right, David. And I think that there is no easy cure for the increasing cost and the accelerating burden of sick, an aging population that will get ill by a matter just based on the math. As more and more people age, they develop more more chronic conditions. The only solution I see is to get value-based care right. And there were a lot of models that blew up in the last cycle. And the federal government threw something called V28, which is a reimbursement constraint that the federal government put on a lot of the Medicare models that shrunk or extended the path to future profitability for a lot of these value based care. This is health care on a budget that were funded by venture capitalists and Wall Street and private investors. think I think the one bipartisan place where the where both parties, health care experts agree is that it's only when you're managing a budget that you're going to actually manage people's care in a way that promotes their health in the long term. And I do think that has to come back. And it's going to come back for three reasons. One, providers and companies are going to adjust to the new rates and opportunities. And I think there's a big opportunity to still manage care in a way that really front loads the care that patients need. And you're seeing that with managed care companies like Devoted that are doing quite well, frankly. And they flood the zone with care for those people who need it. I think it's going to be supported by this administration and the Republican administration and quietly supported by the Democrats who really care. And I think you're going to see continued investment in this area after the, you know, the reaction to the, the, the, the, the change in regulations and reimbursements. So I, I'm, I'm actually cautiously optimistic in anything that invests more in primary care where the doctors are paid much, you know, by 30 cents on the dollar of what the the primary care doctors are of the specialists. If we invest in primary care and create more access, I think you're actually gonna see fewer people getting sick or going to specialists and being hospitalized, and that's a good thing. So John, last prediction, number six, and maybe in a way it summarizes some of these, is that deal making within the healthcare market will grow. And that's partly because it's been pretty dead up until this point the last couple of years, but also- Well- Yeah. Let's make a deal, David. Why don't you tell our public what's been slowing things down and stopping deals so that you people have context for the fact that the things are going to change. I agree. Well, one part has been on the regulatory side has been the antitrust scrutiny. And for example, when Steward Health Care was getting in trouble in Massachusetts and they were looking to offload their physician practice, Senator Warren said, can't let Optum buy it because they control too much of the market, even though it's only 10 % of the number of physicians around the country. I think that type of scrutiny is going to go away. So you're going to have strategic buyers like Optum and some big tech players that are back in the market. That's going to make a difference. The other thing is that there was this exuberance during the pandemic for investment in things like digital health. And the market got out ahead of itself. And the valuations were too high relative to what the long-term businesses can support. And so no one wants to sell, nobody can buy, interest rates have been high. And so I think all these things may come together and have a better environment. No, I think under the Biden administration, their approach at the Department of Justice and the Federal Trade Commission, the two places that mergers have to go through, were some combination of slow and no. And so what that created is they not only stopped the things they attacked, and then sent it to litigation. They slowed things down. think that the the Medisys purchased by Optimus went on was evaluated forever, and then they came out against it right before the Democrats lost the election. They're probably going to go back to go back, go back to the FTC or the DOJ. But it also that environment prevented a lot of health care companies from even bringing deals forward. And almost all deals have to go through some amount of of scrutiny as to whether they trigger any antitrust. And when the federal government's view is slow and no, you didn't even try. So you saw a lot of consolidation in certain markets, smaller deals that didn't require it didn't hit that threshold. But I agree with you. And there's a lot of capital that was not invested in the market over the last few years that I think is now ready for particularly from a big company perspective to go by their way to growth. But I also think, David, that what the countervailing force might be, there's increasing skepticism, in many cases appropriate, not always, of private equities investment in health care. And while much of private equity is investing in kind of positive things that are helping solve the value-based conundrum, how do you actually manage health care in a lower cost and also help patients, there have been some really egregious examples, like the Stuart one, where frankly, the investors absconded with health care funds and the patients and the clinicians were left stuck. So I think you're going to see a lot more deal making from a business to business perspective. But I think that private equity funds, those investment pools of investment capital that are led by Wall Street like investors, I think that that may have cooled a little bit. And I think you're going to see a lot more strategic large players like the United and the Optum's, Umanas and others just kind of gorging. at the feast of acquisitions. Just right at the trough there. Yeah. And the steward, when he say, know, it's like I'm Elmer Fudd, millionaire. I have a mansion and a yacht, a mansion and two yachts in that particular case. I agree, John. On private equity, maybe I think you'll see the places. There's a lot of things in the background that aren't provider organizations where health care, private equity firms can still invest. So we'll see, John, we'll see if you're part of any of the deals. Don't you sell out, John. You haven't done it yet, and I hope you... Not gonna happen. You hope you won't. So John, that's it for another episode and another year of Care Talk. We've been doing this for quite some time. It continues to get better. I enjoy our episodes together and with guests. I'm David Williams, president of Health Business Group. And I'm John Driscoll, the chairman of Waystar. If you liked what you heard or you didn't, we'd love you to subscribe on your favorite service. And thank you listeners. Happy New Year.