[00:00:00] Rick: So we have a fantastic guest and expert in the field to really talk about Trump's healthcare agenda. Emily Evans and Emily is the sector head responsible for health policy for hedge eye research and analytics. I think folks might know of Hedge Eye. They have a, a great portfolio of offerings that really go deep into what I would say is hedge fund quality research for everyday investors.

[00:00:25] A little background on Emily. She really comes together where investors wanna understand the industry in the areas of where politics, policy and regulation really converge. Her expertise goes very deep in the biopharma space, supply chain, and I would say med tech and all things healthcare delivery.

[00:00:46] So with that, you know, we're gonna have a. Phenomenal discussion here on some of the big issues that are out there. Medicare, medicaid, MedTech area, that space, what's gonna happen in the insurance side on the commercial piece, and what, what it means for everyday individuals. So with that, let's welcome Emily Evans.

[00:01:03]

[00:01:17] Rick: Good.

[00:01:17] emily, so great to see you. Have you back on the Healthcare Nation podcast. I just have to tell you, um, and I mean this sincerely. After the election coming up to it, I thought there's only one guest we've gotta have regardless of the outcome. That's Emily Evans Talk about the markets, talk about policy politics.

[00:01:35] Everything that goes into that space, obviously. Um, we're taping this on the seventh, so we know Donald Trump, um, clearly swept everything, and we're gonna go deep on that. So first, how have you been my friend? Great to see you.

[00:01:51] Emily: Great to see you. I have been good. Um, it's always nice when you're in the. Policy, politics, business to get your prognos prognostications correct. So, so that makes me feel good. And not that, that, that, not that that represents my opinion of what should have happened, but you know, that's the job is to, to, to forecast what is going to happen not what you want to have happen.

[00:02:18] Um, and and so so I'm I'm, I'm doing well. I, we have a very interesting new world ahead of us.

[00:02:26] Rick: I'm sure you've been very busy right now with your client portfolio, wondering about that new world. So let me just, I'm gonna just jump right in. Let's talk about, um, Trump's healthcare agenda, policy directions, his priorities. You start off, what do you think or anticipate might be different with respect to his policies from his first term?

[00:02:49] Emily: I think the most important difference is going to be that. He is not going to rely on the legislature. The House and the Senate to define that direction. I think he's going to listen to them respectfully. But if you recall in 2017, you know, they were still fighting the, the last war on repealing the Affordable Care Act.

[00:03:14] And he got sucked into that. And it was an early. Unforced error because he didn't have a good policy team in place and advising. Here he is, got a policy team. He actually actual real policy people involved. And the most high profile of those are Vivek Ram Swami, who's a biotech, got a biotech background, and Robert F.

[00:03:39] Kennedy, the Children's Health Defense group, which, you know, has focused on mostly on children's health. So, so that's the first. Big, and that is a big and important difference.

[00:03:50] Rick: Yeah. And I I wanna go deep on both those individuals and the influence they're going to have, I think on the president's health policy. But let's start with this one issue. I've always thought, look. If there's anything the GOP has stood for, it is, let's dial back regulation. When I think about a mixture of RFK Junior in there, and even Elon Musk, I really think, wow, what's the regulatory side gonna look like?

[00:04:16] Is there gonna be a deregulation push? And how might that. Carry over into the med tech space, biotech even to a certain extent, pharma, maybe less, but a across the board overall particularly, and, and perhaps more specifically if he does do this overhaul of the C-D-C-N-I-H and the FDA.

[00:04:39] Emily: Okay, so the deregulation agenda, I think is going to be primarily. Primarily owned by Congress. And I'm thinking of site neutral policies, for example. I'm also thinking about some of the insurance, um policies specifically I've got on my radar. I. An end to the minimal minimum loss ratios that are in the a CA.

[00:05:08] So there, I think that a lot of that is, is gonna be owned by Congress. So, so what does, what does Trump do? First of all, anything that can be done with an executive order and that's undoing everything that the Biden administration did. And in a lot of cases what the, um, what the Obama administration also did.

[00:05:27] And and those are things that. The, it's kind of, it's not super material to investors, but, but definitely material to the operation of healthcare. Um, you know, health equity provisions, for example I think would be, you know, a good, a good place to start. When it comes to deregulation and I, and I know they've apparently got 400 executive orders already prepared.

[00:05:53] Um, you know, things like the nurse staffing ratio. In skilled nursing facilities or the, um, home health, you know, maximum operating margin. You know, these are, these are kind of intended to help with election prospects because it would appeal to. To organize labor in, in healthcare. So, so those are the kinds of things I'm, I'm thinking about that'll come out of the White House.

[00:06:17] But the, the thing to remember is that Donald Trump is not a huge fan of the, the sector. He, he just, he just doesn't wanna deal with it. And, and Vivek and RFK are the ones that I think are gonna define the, the, the proactive future, rather the deregulation future.

[00:06:35] Rick: Let me, um, kind of spin a little bit on that and go into Medicare and then Medicaid. Um, obviously there's a line in the thread that goes through that. If you think about Trump's previous interest in reducing Medicare spending in general, and you think about, um, Vivek going in there, do you see significant changes on how Medicare is gonna operate?

[00:06:59] Will there be more of a push to ma plans Medicare advantage? How will this impact Part D?

[00:07:06] Emily: I think the first thing to say about Medicare is that it's the old political phrase. The juice ain't worth the squeeze. If you messing with Medicare, particularly traditional Medicare or, you know, payment rules or, or any of those things is, is just. It's just not really particularly worth it because that, that's not a growth area of, of healthcare that population is, is, you know, reaching its high utilization years, you know, the 1947 cohort once the 1962 cohort turns 65, you know, you don't, you just don't have a growth in that population.

[00:07:44] So it's not as big a problem as it was say, you know, in, in, in 2010. And so therefore it's gonna

[00:07:50] get less focused.

[00:07:51] Rick: kryptonite as well.

[00:07:53] Emily: And it's politically kryptonite. The Medicare Advantage plans though do you know, offer some interesting problems because back to my prognostication about the medical loss ratio, Congress is concerned about all the vertical integration.

[00:08:09] I. The in the plans UnitedHealth Group has, has some control over 90,000 physicians, for example. Um, that is a very big interest, but that's also in Congress. And here's a twist that I don't think many people are expecting. Yesterday, Bernie Sanders released his statement on the election and took and, and took the Democratic party.

[00:08:37] To task for losing the election, not because they just lost the election, but because they have become a, a party that has departed from core principles that they, that they've enjoyed for many years. He could very well start caucusing with Republicans, and one of the areas of focus, Elizabeth Warren has already identified this, is that medical loss ratio.

[00:09:00] In which case you've got United Health Group and, you know, ance, they all have these huge physician practices and all of these tools at their disposal that basically burn MLR, um, so they don't have to send money back to the government. Instead they do inter intercompany transfers. So, so that's a, that's a twist I don't think many people are expecting, but I am.

[00:09:20] Rick: Yeah. And two things. One is, um, clearly echoes of Joe Manchin there. When you think about. Bernie potentially caucusing with the GOP. And the other piece is when you think about ML, the, the loss ratio, and yes, indeed, a company like UnitedHealth Group and they have their Optum arm and they're kind of this circle that they've created, does circumvent a lot of the issues

[00:09:43] Emily: Yeah.

[00:09:43] Rick: have with MLR, or maybe they're optimizing it, I should say.

[00:09:48] Emily: They're following the law, they're responding to the incentives, you know, that, that Congress put in there and didn't anticipate, you know, what was gonna happen. But, but that's, that's, those are the incentives and they're responding to 'em. But if they, if Congress says, okay, I. You know, we're not gonna give you a mini you know, a minimum loss ratio.

[00:10:04] You don't have to send any money back to have all these physicians practices and other things. What, what do they do? You know, what is, what's cons? What purpose will they serve in the future? They're gonna have to be economically efficient. So the bonuses, you know, you mail out in order to, to docs in order to avoid the the MLR rebate, you're not gonna do that anymore.

[00:10:26] And what does that mean for those docs? You know, we don't know, but it, it, it's not what it is. Now we know that.

[00:10:32] Rick: Yeah, that's a great point. When I think about reimbursement in general, and then if you, if you pile on the, the issue with MLR, you're talking about things could radically change for hospitals and health systems along those lines with, with a, a, a big number of their employee spend being on physicians, physician practices, et cetera.

[00:10:52] Do you, what do you think along those lines, you agree with respect to the impact on hospitals and health systems?

[00:10:57] Emily: Yeah. 'cause I think one of the things to remember, because the, the MLR was set at 85%, but there's no downward pressure on premiums. Premiums have just been doing that. Right. For all across the board with exception Medicaid, of course. They're just, they just keep doing that up and up and up. And then the benefit cost starts, you know, just rides up there with it.

[00:11:19] You know, and you have this 15%, 20% spread between, between the two. But it, it, it, it's, it's trying to go to infinity at this point, you know? And and that has been great for everybody in the system. I. Although not the American taxpayer who's dependent, I mean, it's, it's a transfer from the, from the US Treasury to the healthcare system.

[00:11:40] But but if you, if you start having some, some economic discipline in there, whether that's the, you know, in the form of MLRs or something else, then, then that, that system starts to kind of get squeezed. And we're seeing that, that a lot of that kind of in the pharma chain right now as a result of the inflation reduction act.

[00:11:59] Rick: Yeah, let me stay on, um, Medicare for one second and go to the MA plans Medicare Advantage. What are you thinking under a Trump administration? I've been thinking they've been, obviously I. If there's been an uptick year over year much more enrollment, do we see that accelerating? Do we see more favorable, for the, the payers that are getting into that space?

[00:12:23] Emily: It, it's, it's because of the population dynamics. It's gonna be a very, very competitive environment. I expect a lot of the smaller, weaker plans to drop out with the big dogs, probably in control of the environment, you know, over the next five years. The thing about it, however, is that, you know, with the inflation reduction Act.

[00:12:47] Congress got Congress, you know, lowered the maximum out of pocket for seniors and it put the burden for the catastrophic, drug costs. So you hit $2,000, you know, annually for your drug costs. You know, you get put into a catastrophic phase. It used to be that the government picked up 80% of the catastrophic phase.

[00:13:10] Now as of 2025 the health plans have to pick up 25% of the catastrophic phase. So these standalone PDP prescription drug plans that are paired with Medicare fee for service, those aren't really viable. Because you have no visibility into the patient, what they're doing, who they're seeing, how they're being taken care of.

[00:13:32] You're just getting a drug bill, you know, every month. Um, and, and so what's gonna happen is these standalone prescription drug plans, and it's already happening, they're going to discourage enrollment. Try and push people to Medicare Advantage, and that enrollment is gonna grow much faster and further than I even I anticipated.

[00:13:51] I kind of capped it at 54%. But if there's no drug plan available to you, unless you enroll in Medicare Advantage, well you're gonna enroll in Medicare Advantage that leaves Medicare fee for service. A particularly difficult political pickle because there are a lot of people who in Congress, who think of Medicare Advantage as nothing more than privatization.

[00:14:12] And, and therefore we have to get rid of, you know, we can't, we can't do that. But here, Congress has basically done that. Because again, not thinking about, all right, what, what would happen if we, if we did it this, this way. So, so I think you're gonna see expansion in enrollment, but at the same time, you've got a population of people now, the bolus of which is in their high utilization years, you know, mid, late seventies, you know, eighties.

[00:14:38] That's where the. That's where the postwar generation is. So they're getting more expensive. You don't have any younger people coming into the system because the, the population dynamics and, and what you're gonna have to do if you're UNH, is you're gonna have to, you know, crowd out the smaller players.

[00:14:54] So you have as much control if possible.

[00:14:57] Rick: Yeah, I'll tell you. And, and on the pharma side of that, I, I, I think even providers and I, I'm, friends with some docs who still have an infusion side of their practice independence, and it's just changed radically for them, something they counted on. And some of these specialties are not in the higher, let's say higher income ranges like rheumatology, et cetera, and they're getting crushed.

[00:15:22] Emily: By the the part, by the the Part B drug policies. Yeah. Yeah.

[00:15:29] Rick: the B 2D, the conversion very difficult for them.

[00:15:33] Emily: Yeah, I, I think that is, that, that's gonna have to hit crisis before somebody actually does something about it. But it's a it's, it's gonna be a huge factor. It's gonna, and it's gonna probably drive some consolidation which is not what Congress wants to see. I mean, they, they're shot of themselves in the foot so badly here.

[00:15:51] It's, it's not even funny.

[00:15:54] Rick: Let me let.

[00:15:55] Emily: that they want, they're getting the actual opposite of those.

[00:15:59] Rick: Yeah, that's, and, and I'll tell you, unfortunately, it's, you know, there, it's like all things, there's politics impacts, policy impacts, the payers, the providers, and ultimately the patient, which is, you know, um, I teach my students that. And unfortunately in the, you know, as things trickle downstream, it's the patient that gets hit with,

[00:16:19] Emily: Oh yeah.

[00:16:20] let switch over to, to Medicaid quickly.

[00:16:23] Rick: Um. Will block grants be revisited. Um, what do you think along those lines with respect to Trump V one versus V two?

[00:16:33] Emily: I think they will be. And here's here's why. Um, it is altogether possible, though not proven, that the Medicaid system has a whole lot of fraud, waste, and abuse in it. And I say that, um, because if you look at the enrollment patterns in certain states they are, it's the, the, the enrollment, you know, the way it should work is in most states you have kind of a, a steady state.

[00:17:05] So each month maybe you gain. 20 basis points or you lose 30 basis points. But that, that's, that's sort of the steady state of things. And, and you have this disruption with the, the, the mandatory enrollment during the public health emergency where all these people piled into the system, which creates this great opportunity if you wanna just suck money outta the Federal Treasury 'cause you're a fraudster.

[00:17:31] Because a lot of those people already had insurance. They went on Medicaid, maybe because they thought temporary lost their job, but then they went right back to work and had Medicaid plus, you know, whatever employer sponsored insurance they had. So that, so first and foremost there, there's a real question about exactly where are the federal dollars being spent and how are they being spent?

[00:17:53] And the states themselves engage in a little bit of shenanigans, like a woman that enrolls in Medicaid who's pregnant. A traditional Medicaid recipient, so that would be subject to the traditional match in dollars from the federal government. Well, at some point that baby's gonna be born. At that point, you know, at nine months, and maybe there's a postpartum period, but say, call it 18 months, there's a point at which that that woman is no longer eligible for Medicaid.

[00:18:25] But what the states do is that they, they. They keep them in these categories or they move them into, they put like the pregnant woman in the expansion category when she should be in the traditional category. And, and that, that's the sort of shenanigans that I think are um are also gonna get some some look.

[00:18:41] And one of the solutions to all that is to just block granite, say, here's the federal government, we're gonna give this much money. Based on this growth trajectory, please do not bother us any further. And that, that's what Tennessee has. And, um, although not strictly speaking a, a block grant, but, um, but we're pretty happy with it.

[00:19:03] Rick: Right. In Tennessee there's Right, there's no expansion with Tencare. I.

[00:19:06] Emily: No expansion? No, no. Um, like a lot of the non expansion states are our indigent population. If they're not eligible Medicaid, they rely on the Affordable Care Act. Plans.

[00:19:18] Rick: Right. So before I go to the Affordable Care Act, perfect segue one and I, I would think that, um, back to work rules are going to be obviously at the state level, something that's gonna be looked at

[00:19:30] Emily: Yeah.

[00:19:31] Rick: of changes also at that at that level of government. What's your thoughts on that?

[00:19:36] Emily: Yeah, the work requirements for Medicaid, I, I think that's probably gonna be a common theme you know, for no other reason than we need, you know, we have wage pressures here still, and, and you need more people in the, in the workforce. So I think that's, that's probably gonna be a default. It doesn't really drive behavior.

[00:20:00] Too much we've seen in Indiana. It doesn't, doesn't change how people. You know, behave or, or whether or not they're, um they're, they're, you know working, although hours are, it's not that important, but it's kind of a, a kind of a, a messaging thing. You know, everybody needs to kind of pitch in and, you know, and work and, and let's face it, you know, being in a social environment is much more.

[00:20:28] Important than being, you know, alone at home or, or whatever. So so, but I do expect it to be a big part of it.

[00:20:37] Rick: Let's go now to something that we just touched on a second ago, which was, repeal and replace. Version two. Maybe I'll, I'll characterize it as this. Do you think there'll be renewed attempts to dismantle the Affordable Care Act? If so, what form would it take? You know, yeah. We've got some different players perhaps coming in the administration with some real strong policy views on this.

[00:21:02] And we've heard this as part of the president's or the president, former president, president-elect's going into this. So what are your thoughts on that?

[00:21:12] Emily: I think that President Trump probably has a little bit of PTSD from that John McCain moment, you know, in the middle of the night when he gave them thumbs down and and it, and it failed. Which, which was a. Yeah, like I said at the beginning, just an unforced error, you know, to go into a vote like that and not exactly know exactly where, how, how it was gonna turn out.

[00:21:36] Um, but the Affordable Care Act is an interesting question. And what I'm gonna say here is probably gonna be a little controversial, but I'm gonna say it anyway

[00:21:45] 'cause I think everybody Okay. So President Barack Obama is strongly associated with. The Affordable Care Act. That's why it's called Obamacare.

[00:21:55] Right. And a lot of the energy behind repelling, repeal and replace is about protecting the legacy of Barack Obama. And, and, and that legacy, of course, is directly linked to his reputation as a leader of the Democratic Party. Do you argue with any of that?

[00:22:19] Rick: I do not,

[00:22:20] Emily: Okay.

[00:22:20] Rick: and I also think I know where you're going with this.

[00:22:23] Emily: So now I have to, I have to divert into geopolitics for just one second.

[00:22:29] One of Donald Trump's areas of concern has been our relationship with Iran specifically, how dramatically it changed under President Obama, and we don't have to get into the specifics of that, but it is going to be a focus of geopolitics. If it turns out that, as some people suspect that, um, president Obama was not necessarily, um, direct with Congress on what he was doing or direct with the American people that could tarnish his reputation and if his reputation is tarnished in that regard, could it also implicate this defense of the Affordable Care Act that we've seen since 2010?

[00:23:14] Bernie Sanders note to the Democratic party seems to suggest that's possible

[00:23:23] now.

[00:23:23] Rick: by association kind of a play here.

[00:23:26] Emily: If you're trying to protect the legacy of somebody whose legacy is damaged, well, you're not doing politics right. What you wanna do is pile on you. You wanna damage this reputation even more. That's, typically how, how it, it, it works.

[00:23:43] Um, so, but would this be a full repeal? I don't think so.

[00:23:47] Rick: Would it be a But there's, I haven't heard anything that looks like even an alternative swap out. We'll keep certain elements. It replace others. So if it's a wholesale rebranding, you know, that's one thing, let's just take out the a CA As DBA Obamacare and put in something Trump creates.

[00:24:12] Emily: That, that seems plausible. I do think that there's some budgetary concerns there that that might derail it. For example, the a CA plans, you know, which now my model has it about 22 million enrollees. There's no, there's no ceiling on those premiums either. Because they're subsidized. So all you have to do if you're a plan sponsor is figure out, alright, where is the perfect point at which the, the subsidy keeps the price of the premium in check for the individual insured.

[00:24:45] Um, so that we.

[00:24:46] Rick: increases.

[00:24:47] Emily: Yeah, so we can, so we can, you know we can sell more plans. So that could happen particularly potentially on an executive level as well. I don't really envision the wholesale, let's repeal it. Okay. I see the, I see questions being asked like. Should we have these subsidies work like this, or should they work like that?

[00:25:10] I see that, you know, the, a return of some traditional Republican policies like health savings accounts, um, you know, I, I, nobody's going to cancel out the keeping your kids on. Your insurance until they're 26. As much as I think that's a dumb policy. So, so that those things will stay. CMMI, you know, the, that the innovation center that's under attack and that probably is gonna go no matter what happens.

[00:25:38] 'cause it doesn't seem to provide much in the, in the way of value. So we're gonna have to get into it to see what happens. But, but I think the really close thing to watch is how is former President Obama being. Being regarded by his own party and, and, or by independent like Senator Sanders.

[00:25:56] Rick: Mm-Hmm. No, those are, those are absolutely fantastic spot on points and I think about the political. Impacts. But I also think the economic side of this as well, healthcare as a political battlefield. You just said it, I mean, with the, with the Bernie Sanders you know, example. I mean, I think it's a real potential there.

[00:26:18] And I, I brought up Joe Manchin. We saw how that, that played out. How might Trump's healthcare. Policies, position the us When you think about the broader kind of context of global healthcare competitiveness, particularly when you think about how dependent we're becoming with on ai, the chip side, some of the tech that's out there, which, which is really important and I'm, I've been very bullish on.

[00:26:46] Emily: Oh, um. I think that the, you know, the, the Biden administration tried to bring the technology, well, let me, let me back up and say, you know, without a doubt, a huge problem in the American economy is that healthcare has been eating it, you know, just one chunk at a time. And it has. Because health premiums are ever rising, they wanna go to infinity, right?

[00:27:14] Um, those are, um, depressing cash wages. And I was talking to somebody about affordable housing earlier today. I'm like, you know, the problem isn't whether housing's affordable or not. It's whether you're, whether your wages have caught up with whatever it costs to live, you know, in the city in which you live.

[00:27:31] And, and if you, you, you see, if you go from spending $500 a month on a premium. Monthly to a thousand dollars a month on a premium, and you don't see any appreciation in your cash wages. You know, that's a, that's a, that's a, that's a massive economic problem that's gonna need to be fixed. So, so that's the, that's the, the, the, the concern.

[00:27:52] That's what they're worried about. Now, how do, how do you solve that? Well, the only way to solve that problem is to increase productivity. Healthcare is one of the most. I mean it, it's, I mean, it's like going back in time when it comes to productivity. Some of that is. Necessary. You know, what do you do? You, you measure twice and cut once.

[00:28:12] Right? In, in me, in carpentry and medicine, some in people in medicine are also in carpentry. Um, and you you you, you have, you have, you have some inefficiencies that that are, that are there, but. Have we, you know, what about use of artificial intelligence in a way that is, is, um, productive having, you know, your HCAs you know, claims system.

[00:28:40] Talk to United Health System and the two machines, work it out, you know, um. Isn't exactly productive activity. But if you're, you're able to, you know, get people to move through their workday more efficiently and you need less nurses on the floor because it's, it is operating more efficiently. Well that's, those are things that are, um, are, I think, are, are, are.

[00:29:03] Are, are gonna be explored, or maybe, let me rephrase that. I think that the goal will be to let the market explore those things. The Biden administration's attitude was, okay, we, we need to control for this. We need to have control over this AI thing. And I, I think this administration is gonna be okay.

[00:29:20] Here's some guardrails, you know, but, you know, go, go do it. 'cause we need

[00:29:26] Rick: Yeah, I.

[00:29:26] Emily: We need productivity to increase.

[00:29:28] Rick: I think there's a real hunger for let's, um, let's put ai, you know, to the test with respect to things that you said. Maybe it's more of the low hanging fruit, pre-authorizations, optimizing workflow, you know acquiring physiologic data. So I could look at if someone's decrementing, you know with respect to their condition or improving, and you can make some better care decisions.

[00:29:53] We're seeing a lot of work on that, and I hope it continues. I wonder how a Vivek Manami or a RFK Junior will impact that. Will it be, you know, a, a positive or a negative? Is it going to create more concern? I could see on the pharma side because of some of the things that RFK Junior has said, I might be a little concerned.

[00:30:17] On the flip side, when I think about. You know, med tech, I, maybe it's a, a positive and a lift because of the, you know, the potential with ai.

[00:30:26] Emily: Yeah, and I, I'm gonna side with the kind of free market approach that they might take. And I do think that there, the FDA's already. Said, we don't know what to do with this. Right? They, moderna's trying to, you know, submit this accelerated approval for, for a drug, and they've used this AI thing and FDA's like, ah, we don't know what, we don't know what to do with that.

[00:30:54] Um, and, and those systems have to be developed, you know, the way in which you're, you're, you're looking at it and it needs to be done safely. So I tend to think that there's, there's gonna be a, a, a measured approach when it comes to drug development. I think less so with devices because those things you get, you get the, the possibilities can be pretty endless.

[00:31:19] You know? I know, I know there's this hospital in Denver that has, you know, developed this, um, algorithmically derived approach to identifying, you know, with all vital signs and so forth when a patient should be getting to the ICU. You know, and they found out, well, if the patient gets to the ICU seven hours earlier, they, they come outta the ICU instead of, you know, passing away.

[00:31:47] And, and that's a great. That's a, that's a great innovation. And, but that is, it's device focused. You know, it's devices take information, they send it to, you know, the, the, the, the AI engine. There's a human there the whole time. But but they, they, the, I know this one hospital's had really great luck with it.

[00:32:05] So, so those are, um, those are the kinds of things that I think are gonna be, come forward. I think there'll be more caution on the, on the drug development side.

[00:32:15] Rick: I agree with that, and I'm familiar. I think probably with the institution, you're, you're talking about a lot of this came out of the Pandemic Covid

[00:32:22] Emily: Yes.

[00:32:23] Rick: folks. Acquiring their parametric data, making decisions whether to say, okay, your saturation is dropping, come into the hospital, but not until it is because we don't want you there.

[00:32:34] And how you manage that. I also think there's huge implications. We talk about workflow, but also models of care. And if you look at shortages coming up, um, clinical shortages with nurses or, or certain areas of, of, um, you know medical specialists, it could really impact in a positive way. Some of the gaps we're gonna see with respect to, you know, having folks be on deck to take care of patients in some of these crucial areas.

[00:33:02] Emily: Yeah, and, and one of the phenomena that I. I've been surprised by in this election cycle at the, at the national level and the local level. And, and this is definitely part of Biden's agenda with the minimum nurse staffing and the um, and the maximum operating margins at home health, which were definitely designed to appeal to organized labor is the resistance.

[00:33:30] Two technological advancement from the party of Joe Biden and Kamala Harris and, and, and Barack Obama. And that, and that resistance is, I mean, it's like the, it's like Luddites, right? We're gonna break the, the frames and it kind of coalesced over the head of Elon Musk, you know, because he's such a, a controversial figure.

[00:33:51] But, but it's everywhere. You know, the Longshoreman's were gonna strike. And, and what was, what were they striking over? They were striking over automation and robotics and and that's, that's been a super interesting phenomena that I, I've, I would never have expected, you know, 10 years ago. But, but I think the, the spell will be broken here.

[00:34:14] 'cause you've got, you know, you've got three forward looking people. Vivek Sami, you've got, um, JD Vance, and you've got Elon Musk involved here.

[00:34:23] Rick: Yeah. In fact, I wrote about this, um, a few months ago. We're just looking at models of care and how, you know, nurses in particular would have a change in role. You could imagine a 30 bed nursing unit a. With two advanced practice nurses or, or especially trained RNs overseeing, you know 15 patients each, but not having hands on.

[00:34:46] Expectations, really looking at their, their data and looking for the changes being prompted by AI and what a difference that could make, not only in clinical outcomes, but I also think in on the financial performance side, where you don't have to worry about the shortage, you know, um, shutting down a unit or, you know creating some sort of economic issue that you might have.

[00:35:11] Where you have you know, a a, a lack of personnel that you have to backfill with contract labor, which is costing you three x.

[00:35:20] Emily: Yeah. And contract labor. I mean, I, I think a lot of hospital administrators still have just a, a really, you know, there a ton of regret at how that paid off, played out because, you know, they had their, their longtime employees. Making whatever salary they're making and working alongside, you know, somebody who's getting six grand a month or a week, you know, depend at the, at the top of of the disruption.

[00:35:44] And, and I, I know, you know, just from talking to some hospital administrators, you know, you really wanna avoid that. And, and you're gonna seek ways to avoid that. And if, if the regulations allow you to seek ways to avoid that, that's what you're gonna do.

[00:35:58] Rick: Two more. I think important questions. One is will there be bipartisan opportunities? We don't know where, you know, we know, things with the house are still up in the air as of this recording, but will there be bipartisan opportunities or obstacles that Trump would face in implementing this agenda?

[00:36:20] I think from what I'm seeing, it looks like he'll get a green light on many of his policies or proposed policies upon, I think, perhaps some wild cards like RFK Jr. Saying something that's incredibly inflammatory. I don't know. But what are your, what are your thoughts on that?

[00:36:39] Emily: I think the, well I mentioned the MRR, I think that's very much a bipartisan opportunity. I also think that on the pharmaceutical things, it's a bipartisan opportunity. Um, the the, the, and I'm specifically thinking of. You know, drug approvals that come out with super high prices and then get these, this automatic Medicare, you know coverage.

[00:37:12] We've seen a little resistance to that with the weight loss drugs. Right. And I think that carries forward because, you know Ozempic, those are not particularly. Innovative drugs, right? I mean, this is not, this is not like high science and, and yet.

[00:37:28] Rick: off, right?

[00:37:29] Emily: Yeah. And which was probably the, the, the algorithm went through the library right.

[00:37:33] And said, oh, here, try, try this. Um, and the, if you, you, but, but we're charging, you know, 12, $1,500 a month. And, and that's what I think the as assumption for Lily and, and Novo going into it is, oh, we'll get Medicare to convince Medicare. It's such a great drug and it does all these wonderful things. And what they got was.

[00:37:53] You're charging what? So, so I think that's where the, the, the focus is, is, is gonna be and, and and, and making sure those, those, those, that there's some sort of realism there. I do not think they're gonna take the Inflation Reduction Act approach at all because that's, it's clearly backfired. But, um, but I, I think there's gonna have to, um, have to be some, um, you know, some more scrutiny of that.

[00:38:20] I put the vaccine industry at the top of my list for scrutiny, though I don't think that there's gonna be a, a, a, you know, it, it's really hard to kick a drug off the market. You almost need do it voluntarily, but but there's what the FDA's not done, and in many cases is they've not demanded that the drug companies meet their requirements for post-marketing reporting.

[00:38:45] They're Moderna and Pfizer both owe the public some post-marketing reporting, and they have not been forthcoming. Um, that's also been true of some oncology drugs and and and so forth. So I, I see those things happening first and first and foremost. And, and I think those are bipartisan. I think there's a, there's a, yeah, you, you, you, if you say this drug's gonna do this, and it turns out it does that, well, we need to know about that.

[00:39:13] Rick: And it's both ends, right? I mean, if you're funding studies and only publishing what's favorable, and then on the back end, if you're not reporting, you know post-market, you know,

[00:39:23] Emily: That's a broken system. Yeah, that, that, that's a. And I think that's what RFK is. He gets, he gets I think a bit, a bit of a bad rap, um, because people always anti-vax, you know, if you go and you read it, he is like, yeah. I think, I'd say, yeah, he would, he'd like to see less vaccines. But is he arguing for taking measles vaccine off the market?

[00:39:43] I don't think so. Or even rubella, but. Is he arguing about taking, um, you know, Gardasil or Hep B, the, the infant, um vaccine? I think so. Yeah. I think he, he, he thinks there should be more scrutiny to that.

[00:39:59] Rick: Yeah, and he, and he did get my attention with Fruit Loops, which I think look, why are they different in Canada than they are

[00:40:05] Emily: You know, I, this is actually to me one of the more interesting things that's gonna happen because Bernie Sanders is on the food thing, and, and he was driven there by the Ozempic price tag. And, and he is asking for front of label warnings. You know, your Doritos could kill you, um, just like we did with, um, with tobacco years ago.

[00:40:26] And, and, and that's. That that's a very different world and, and the way in which these generally regarded as safe elements of your, the way they make the, their way into the food supply. You're like, you don't, nobody looks at that.

[00:40:42] Rick: Yeah. And unfortunately including the consumer, which is there's, you know, that's, that's the other piece. At least put it in in their face.

[00:40:50] Emily: Right, exactly. So so yeah, I fruit Loops, I once asked this genetic testing company here in town who does, quality verification on food. Asked them if they'd ever tested Cheese whiz or Fruit Loops, and she said, fruit Loops has no DNA in it. None. I was like, okay, what is that?

[00:41:11] Rick: there's, there's no positive endpoint with fruit loops.

[00:41:15] Emily: No, no,

[00:41:17] Rick: Probably not many things I can agree with Orage. I don't know. Maybe, but certainly that, one.

[00:41:21] Emily: that's, that's one. It's, it's, it's absurd. And you know, why doesn't my, why do my tomatoes from the grocery store go around the world three times? You know? Can

[00:41:30] Rick: It's true.

[00:41:30] Emily: about the tomatoes down the, the down the road.

[00:41:33] Rick: Yeah. So I, I was in not to digress. We were, we were in Europe over this. Past summer, and was incredible to me that the half-life shelf life of milk and fruit is, you know, literally couple of days versus what we see here in the us. So there's

[00:41:52] Emily: Yeah.

[00:41:53] Rick: something there.

[00:41:54] Emily: Yeah. Every gardener knows that, you know, when you pick stuff from your own garden, how long it lasts in your refrigerator. Is, is is particularly significant and which tells you the stuff that's going rotten in your refrigerator a week after you bought, bought it from the grocery store has, it's been around for a while, you know that, that, that didn't show up in the grocery store.

[00:42:13] You know, two days ago

[00:42:15] Rick: So Emily, bring us home. I don't wanna put you on the spot, but, and I don't want this to be a, a zero sum kind of calculus, but if you thought this is, here are the positives, here are the negatives we should

[00:42:27] Emily: I.

[00:42:27] Rick: Think of it from a a market perspective. If you were advising folks, if you thought, hey what's happening in the health sector kinda writ large, and this is the plus column, this is the not so plus or negative column.

[00:42:41] Emily: I would put, let's start with the negatives. I would put. Managed care organizations in the negative. Um, and there are some structural problems there that we've already mentioned, the demographics, but there's my model has something like 330 million people covered by some kind of insurance. That's, that's almost the total population.

[00:43:03] Now, some of those are duplicated Medicare. They have Medicare and Medicaid, for example. Um. But that's a, that's a ton of people. There is no upside growth to coverage for managed managed care organizations. All there really is, is moving people who are on Medicaid to the Affordable Care Act or moving them from, you know, Medicaid to Medicare or, or whatever.

[00:43:25] There's no. Additional persons right now barring, you know, a change in the fertility scene or or some significant change in, in the immigration. So I think that's a, a, a negative. I'd also put biotech in the firmly in the negative category, and, and I'm thinking here of the. The research and development aspects of it.

[00:43:48] So early biotech stuff that comes out of typically NIH, you know, um, and, and then is commercialized. And then you'll have a small biotech company in Boston and they're buying Illumina tools or. Maybe they were buying it from China or whatever. What I'm expecting is NIH to be restructured. And, and that when you restructure anything in government, you slow it way down.

[00:44:14] So the grant making pro process will be slowed. It might even change. There is a strong school of thought from the Senate. That NIH research should be basic. It should be the stuff that the free market won't touch or can't touch. You know, it should not be, it's like, you know, going to the moon, right?

[00:44:33] You, you only the go US government was gonna go to the, the Russian government gonna go to the moon. Um, so what are those things in the biotech sphere that, that nobody, nobody else will touch? And, and focus on that. And then let the private sector take care of the, you know, the, the translational. Part of it.

[00:44:50] And, um so, so, but there's gonna be an adjustment there. First, things are gonna slow down, which they're really already doing, and, and second, there's gonna have to be an adjustment in what the role of NIH is. I expect too, that you're gonna see some decentralization into the states with state programs instead of, you know, keeping it all in in Bethesda.

[00:45:10] So those are my two negatives. My, my positives are probably the providers. If they're deregulated, especially the, the hospitals and the vertically integrated systems and, and there's a lot of vertically integrative systems that are not interested in innovation, we should recognize that. But if you look at a, a a company like Ardent or or tenant or HCA, which are all for-profit there is some innovation interest and, and the, the idea that, that they're restricted by regulation is something that should.

[00:45:44] There's a lot of potential to improve how they operate, and that includes, um, financial performance.

[00:45:54] Rick: Emily as usual. Fantastic. Um, this has been I think a timely podcast. And again, going over a Trump. V two particularly given what we've talked about and what we know about what he did with his first term is I think a, your point's incredibly spot on and something we're gonna look for. We'll have you back in a couple months to see how things are unfolding.

[00:46:23] Emily: Let's see how it

[00:46:24] goes.

[00:46:25] Rick: Yeah, absolutely. Great show. Great to see you. Thanks again, Emily.

[00:46:29] Emily: All right. Great. Thanks for having me.

[00:46:32]