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!
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Episode Transcript:
David E. Williams: 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 CareTalk, America's home for incisive debate about healthcare, business, and policy. I'm David Williams, president of Health Business Group.
John Driscoll: And I'm John Driscoll, the chairman of Waystar.
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Make it a great season with BetterHelp, and visit BetterHelp. com. Slash CareTalk to get 10 percent off your first month. That's BetterHelp. H E L P dot com slash CareTalk. Now, John, we've reached the end of another year of CareTalk, and I have to say it's been as rewarding as ever. I 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. The audience
John Driscoll: has been great, David. I mean, the audience is really very much more engaged this year.
So really a big thank you to everybody.
David E. Williams: John, I think you like that because a lot of the comments come in in support of your positions for whatever reason.
John Driscoll: Or they attack my criticism of you, but they're all, it's all, it's, it's all good. What's, what's, what, what I love is that people are really taking the serious stuff that we try to make a little less serious.
Seriously, and that, that level of direct engagement, we really appreciate. So really thank, thank you all. Thank you listeners everywhere. So David, what is, what is prediction number one on your list? John,
David E. Williams: prediction number one is that we're going to see a GLP 1 ecosystem. And, you know, we talked about the GLP one drugs, but there's going to be a whole bunch of companies that form around this.
This is so transformative for the healthcare system as a whole that we're going to see it. So what am I talking about an 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 one theory therapies that are out there.
And, you know, there's been a lot of things out there, John, that really sound good in the wellness category. And the fact that the GLP ones are out there make it possible. So we've heard a lot. We've talked about things like food is medicine, you know, and if you look at these, even the biggest companies like Nestle, You know, they're going and they're relabeling or they're, or, or they're actually launching new lines of, of frozen meals that are GLP one.
John Driscoll: No. Let's be honest, remember, these are the GLP ones. The injectable therapies that appear to be a miracle drug in terms of losing weight in people taking control of their metabolic disorders. And that's certainly a miracle drug for Lily and Novo, who are making gajillions of dollars by overcharging the United States literally caught charging the United States.
Consumer and healthcare 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?
I mean what is the value of that ecosystem if it develops and why do you think it's going to happen now?
David E. Williams: 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 that, you know, that make cases or little, little accessories for it.
And they do okay on their own, but they don't really fundamentally change your experience with the iPhone. Now, I think with GLP one, it's going to be different because 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 NourishDarX, and you see that this is now an enabler, right? Because diet alone, exercise alone, drugs alone, behavior alone, don't, 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 it'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.
John Driscoll: 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 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 looks, never looks so sexy and attractive as it does on an, on an internet ad or on television.
And so, and 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, the opportunities to do cognitive behavioral therapy. or to have a digital cue or to change lifestyle or to have food as medicine. Like you know, you're gracious enough to mention my wife's company nourish directs, but there's a whole, they may be the 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, you don't, 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 going to 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.
And so around that, I think all of the other programs which are cost less 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.
David E. Williams: 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 ones are starting to be looked at for other indications, you know, 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, you know, people, many people comorbid this is going to potentially expand the ecosystem dramatically. So I think 2025, you're gonna see a lot here, but it's not gonna be a flash in the pan. I wouldn't imagine.
John Driscoll: And, and, and I, and I think it's not just gonna be wellness for the wealthy.
I think you really have an opportunity to change to, 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.
David E. Williams: 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 a lot more of that. 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, what's top of mind. AI is great at processing every, all the information that's out there. And also you're going to have more passive monitoring devices that are going to use AI for things like monitoring chronic disease. And having, you know, early detection.
This is things like wearable devices, including your, you know, your watch that is going to be able to see, hey, is something coming on? And can we head it off as opposed to wait until somebody collapse and call an ambulance?
John Driscoll: 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 healthcare 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, 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. I 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 is sort of an individual platform in healthcare.
David E. Williams: Very fair, John. And I think the, there's a 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. You know, frictions, new ones coming, let's say from 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, that humans doing it.
John Driscoll: Yeah, I, I, I, 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 a novel Silicon Valley.
So I'm hoping that's not where we land, hoping that both sides can be part of a de-escalate the, the, the bureaucratic arms race to slow down or speed up payment.
David E. Williams: 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.
Oh, come on, David, you always say that. But also cause real damage to public health. Okay, so what could be positive? Because we like to start on the positive side. So positive side could be, you know, 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 say make America healthy again make America great again, you know, make America scared of polio again make
John Driscoll: America stupid again. I mean like come on David. We're we know better Yeah, but I mean there are some big Positive notes, like our guest, Marty Macri has great ideas and insights on actually making sure that science and fact-backed insights are part of any decision and they aren't part of some bureaucratic long term.
So they're long-term or ideological or authentic. Fixed mindset. He's all about a fact-based mindset. I think he's a step in the right direction. I think we're, we're, it's going to be really interesting to see what Mehmet Oz does at the center for Medicare and Medicaid center that, that driving and really supporting health and wellness in the Medicare and Medicaid populations.
But David, I'm a bit of a skeptic. Yeah.
David E. Williams: 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, it'll, I think it all, it all will center around whether RFK Jr. Get as the most senior healthcare executive on the administration gets through.
John Driscoll: So I'm, I, I, I'm, 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.
David E. Williams: 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.
John Driscoll: Remember that when the city of Philadelphia, I 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 are that do not have the MMR vaccine that are not traditionally vaccinated outside of the U.S. And we lose about 140, 000 Children a year. To death and so I 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
David E. Williams: 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, you know executive security personal security invest in enhanced security measures and crisis response You Protocols that's, I 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.
John Driscoll: 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 it. 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 since 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 on to clinical workflow. So there's a, I think we are at an interesting cultural moment and I, 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.
You know, 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 rendered. I think that kind of behavior is just not going to be tolerated by patients and increasingly,
David E. Williams: So John, I'll add another little piece here that I'm, I'm, I'm certain of more certain of than this measles outbreak, which is that this murder is going to have no impact on gun regulations, including on ghost guns.
John Driscoll: No, no, I mean, sadly, we are a, we are a, we are a gun country, a gun culture. And I think what we really have to focus on are those. Areas where 70 percent of the American population believes in background sex, 70 percent of the American population believes in increased safety measures, 70 percent of America believes that there are, there are very few public spaces where people should be open, caring and be able to and be able to participate.
provide or support the automation of otherwise single-shot weapons. And so that we hopefully, and you're starting to see it actually in red states and blue, you know, there was some positive, 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 going to 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 by dying from gun deaths in the United States right now.
David E. Williams: So John, in terms of our predictions, we made them a little bit like a sandwich. So the first couple are kind of positive, you know, GLP one 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 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 hassles 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?
John Driscoll: No, I, I think that's right, David. I mean, I think that the, 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 of just based on the math, as more and more people age, they develop more and more chronic conditions.
The only solution I see is, is, is, is to do to get value-based care, right? And there were a lot of models that up that blew up in the last cycle and the federal government. Through something called V28, which is a reimbursement. Constraint that the federal government put on a lot of the Medicare models that shrunk the 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. I 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, I do think that has to come back and it's going to come back as. 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. 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 reimbursement.
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 specialist. We invest in primary care and create more access. I think you're actually going to see fewer people getting sick or going to specialists and being hospitalized.
And that's a good thing.
David E. Williams: So, John, last prediction number six and maybe in a way it summarizes some of these is that deal-making. Within the health care market will grow. And that's partly because it's been pretty dead up until this point, the last couple of years, but also, yeah,
John Driscoll: Let's make a deal. David, why don't you tell, 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.
David E. Williams: Well, one part has been on the regulatory side has been the antitrust scrutiny. And for example, when Stuart Healthcare was getting in trouble in Massachusetts, and they were looking to offload their physician practice, and Senator Warren said, can't let Optum buy it because they, you know, they control too much of the market, even though it's only 10 percent of the number of physicians around the country.
I think that type of scrutiny is going to Go all 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 the, there was this exuberance during the pandemic for investment and 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. No, I
John Driscoll: think, I think, 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. I think that the the medicines purchased by Optimus went on, was evaluated forever. And then they, 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 healthcare 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, some smaller deals that didn't require, 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 buy 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 healthcare. And while much of private equity is investing in kind of positive things that are helping solve the value-based con, you know, conundrum. How do you actually manage healthcare at a lower cost and also help patients?
There have been some really egregious examples like the steward one. Yeah. 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, the, 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 I optums, you man, as in others, just kind of gorging at the feast of, of, of acquisitions.
David E. Williams: Just right at the trough there. Yeah. And the steward, when you say, you know, it's like, I'm Elmer Fudd millionaire.
I have a mansion and a yacht mansion and two yachts. In that particular case, I, I, I agree, John, on the private equity, maybe I think you'll see the places. There's a lot of. Things in the background that aren't, you know, provider organizations where healthcare 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 you hope you won't. So John, that's it for another episode and another year of CareTalk. 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.
John Driscoll: 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.
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CareTalk is the only healthcare podcast that tells it like it is. Join hosts John Driscoll (Senior Advisor, Walgreens Health) and David Williams (President, Health Business Group) as they provide an incisive, no B.S. view of the US healthcare industry.
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