Weekly Health Tech Reads 4/13/25

Quote of The Week

Dr. Oz’s first all-staff meeting as CMS Administrator on this week appears to have been a bit contentious as this Wired article reports. The focus on AI use at the agency, supporting MAHA, and focusing on addressing obesity does not seem to have been well-received by CMS staff, as highlighted by this quote below:

That quote will stick with me for a while as I think about what Medicare “does” — certainly it needs to care for people in nursing homes, yet I don’t see why it’s a bad thing to be talking about nutrition and exercise. In his vision for CMS, Dr. Oz noted he aims to shift the paradigm from sick care to a system focused on prevention, an idea that has been discussed as a needed change for so long. As we collectively talk about the many problems facing healthcare in terms of high costs and poor outcomes, focusing conceptually more on prevention and wellness topics like nutrition and exercise seems like it has to be part of the solution here.

Other Noteworthy Headlines

• A federal judge in Texas ruled this week that CMS does not have the authority to implement 24/7 nurse staffing requirements at nursing homes because Congress has already defined a nurse staffing requirement at 8 hours a day. Axios provided a good summary of the ruling and its implications. The ruling itself doesn’t focus much on what the right staffing ratio standard is for nursing homes, as the judge appears to think the CMS change is a good idea. Instead the decision focuses on the question of whether CMS has the statutory authority to amend Congress’s definition, and the judge finds CMS does not. If you’re interested in the history of nursing home legislation, the court case provides a nice summary of how legislation has changed over time.

• CMS told state officials this week that it will not extend or approve new applications for Designated State Health Programs (DSHPs) via Section 1115 Demonstrations for Medicaid enrollees, although existing 1115 programs may continue. The CMS letter to states notes that it believes that states were using this tool as a mechanism to receive more federal funding rather than implementing appropriate section 1115 demonstrations as intended, calling out a few state programs in particular. If you’re interested in going deeper on this topic, this LinkedIn post from Morgan Craven at ATI Advisory is helpful, along with this presentation providing an overview of these programs.

• Weight Watchers appears to be heading for bankruptcy, according to this WSJ report. It is still attempting to restructure its debt outside of a Chapter 11 process. Regardless of how the debt restructuring happens, its a reminder of the challenges the business faces in this world of GLP-1s.

• Farm bureau health plans appear to be gaining traction as five states are debating whether to allow farm bureaus to offer individual and small-group plans that don’t comply with ACA guidelines. If you’re at all interested in the complexity of driving change in the insurance market, I think this topic provides for a really good case study. The arguments are familiar on both sides of the equation — farm bureau plans are cheaper because they aren’t mandated to cover as many benefits and they attract healthier populations. On the other hand, not being subject to ACA regulations makes it significantly easier to deny care for people who need it, leading to stories like this one of patients who are surprised that their care isn’t covered. Insurance companies worry that creating a market like this will negatively impact the risk selection on the ACA exchanges, which feels reminiscent of the death spiral conversations that were so prevalent in ACA discussions around 2016 / 2017. As the topic of splitting insurance markets appears to be coming up more often as politicians grapple with the costs of insurance coverage, it’ll be worth keeping an eye on this dynamic.

• The New York Times picked up on the shenanigans happening in the skin substitute market, where Medicare spending has skyrocketed over the past five years, with some providers reporting upwards of 400% increases in annual costs and some patients receiving millions of dollars of skin substitutes. Similar to the farm bureau conversation above, this topic makes for a good case study in terms of how to set policy for a care delivery market that appears to be the wild west, like this one. There are again with familiar arguments on both sides: you have skin substitute proponents arguing that curtailing this market will harm patients and curb innovation. On the other hand, this pretty clearly seems like wasteful spending in some instances and outright fraud in other instances, which may also be resulting in harming patients.

• Walgreens reported its fiscal Q2 2025 earnings this week. While there was no earnings call because it is in the process of being taken private, the earnings release noted that VillageMD sales declined by 6.2% in the period and that Walgreens had to take yet another goodwill impairment charge on VillageMD. In this quarter the goodwill impairment charge was $3 billion, compared to a $12.4 billion goodwill impairment charge in fiscal Q2 2024.

• SCAN and Sutter Health are collaborating to launch new joint Medicare Advantage products in Northern California starting in 2026, with plans to create a JV health plan in the near future. This Fierce Healthcare reporting notes that the intent is to create more tailored MA plans specific to individual needs.

• Longevity clinics are becoming a status symbol that can carry price tags of $100,000+ a year, as highlighted in the WSJ this week. This longevity movement appears to be hitting peak hype cycle type given the status it carries currently. I’ll be interested to watch how the hype cycle journey evolves over the coming years — clearly there’s a market for $250,000 a year clinics in large markets like NYC for the ultra wealthy seeking the fountain of youth, but I don’t necessarily see that translating into huge venture exits personally.

• The state of Tennessee is partnering with Carrum Health as a Center of Excellence (COE) model for Tennessee state employees. Carrum now has over 1 million public sector lives, and I imagine the next few years we’ll be seeing a lot of activity in the COE market as employers grapple with navigating access / cost tradeoffs for employees.

• Transcarent and Accolade completed their merger.

Featured Jobs

Social Post of the Week

Picking up again on the topic of MSSP, this LinkedIn post from Aledade’s Travis Broome included a fascinating chart highlighting how the ratio of beneficiaries per PCP in MSSP has dramatically declined over the last decade. The study that Broome cites in the post also provides some helpful insights into the structure of ACOs.

Other Worthwhile Reads

Analysis of CMMI Model Costs, Quality Performance, and Transparency by Avalere Health
This report from Avalere is a good deep dive on the impact of CMMI, analyizing eighteen models of the models that CMMI implemented in order to better understand the impact of these models. Read more

Strategies for Sustaining Emergency Care in the United States by multiple authors
This report by RAND assesses the value of emergency care and provides policy suggestions to ensure that emergency departments receive appropriate funding. Read more

Chairman and CEO Letter to Shareholders by Jamie Dimon
The JPMorganChase CEO’s comments to shareholders included a section of thoughts on how to transform American healthcare, arguing for a few policy changes — more transparency and a broader range of insurance options for people to buy. It doesn’t go too in-depth into anything, but it seems worth paying attention to how someone like Dimon frames the needs. Read more

‘I wish we could be more optimistic’: A look at AI implementation at an Arizona FQHC by Emma Beavins
A great practical example of the challenges a small rural FQHC faces when attempting to implement AI. Clinics that have internet access issues daily, EHR migrations and funding issues that all make it harder. Given the push from CMS for using AI, including in rural settings, I’ll be curious the types of support provided for practices like this one. Read more

Q1 2025 market overview: Ready, set, leap by Mihir Somaiya, Sari Kaganoff, and Clara Sun
The Rock Health crew released their report on Q1 2025 fundraising activity, which saw 122 deals completed and $3 billion of capital raised. Activity was centered around a high volume of small early stage deals and a handful of large late stage deals. The analysis provides a view of “leapfrogging” strategies as startups look to get ahead in the market today. Read more

Medicare Advantage market growth slows amid intensified headwinds by Chartis
I missed Chartis’ excellent review of Medicare Advantage enrollment while out on spring break a few weeks ago, but am including here in case you haven’t seen it yet. It’s generally the best summary of MA enrollment trends each year, and this year is no different. Read more

Startup Funding Announcements

• Bliss Aesthetics, a platform that matches patients with cosmetic surgeons, raised $17.5 million.

• Thoughtful.ai, an AI platform for revenue cycle management, raised growth funding from New Mountain Capital.

• Cofertility, an egg donor platform, raised $7.25 million.