140 – How “Make America Healthy Again” Could Completely Change U.S. Healthcare

Marcus: [00:00:00] If you enjoy this content, please take a moment to rate and review it. Your feedback will greatly impact our ability to reach more people. Thank you,

Emily. How's it going? 

Emily: Oh, Marcus, it's going well. 

Marcus: Good. Going well. Good. Thank you for sitting in. Vic is, uh, I said Fiji to you earlier, but he's in Peru. A much better place to be. You're off 

Emily: by half a hemisphere. It's okay. Yeah, basically. Yeah. 

Marcus: But, but not by the number of letters or syllables. No, no. I was, I was dead on with letters and syllables.

Just, you know, the whole geography thing is a different, it's a different matter. Yeah. Oh, man. Uh, anyway, listen, uh, two things. One, um. I am here and I hit record and I got everything together and I talked to Aaron. So we will have a show this week. Okay. But that's about it. I had no time to prep for anything, but That's okay.

Because there's only really one thing I want to talk about this week. Okay. I did skim the AI news last week was [00:01:00] a big one with Google io. Yeah. And, and you know, um, uh, open AI bought John AI for $6 billion Yeah. This week. Not so exciting, quite frankly. Yeah. So I don't feel like we need to track a bunch of stuff.

Nvidia did have a good week. 

Emily: Yeah. So 

Marcus: that was, you know. 

Emily: Yeah. And I do wanna talk a little bit about the controversy around ai. Okay. You know, like it, the, this idea that it's going to, you know, raise unemployment 20% or it's going to destroy the workforce. Um, there, we, there's never been an, okay. 

Marcus: Okay. Let, let's, let's make sure we cover your Okay.

Your stuff first. Alright. Let's that first and, and then, and then, and then we'll talk about this. Okay. And we'll talk about this because I'm, 

Emily: I'm, I'm interested in. It. Well, it's, first of all, it's the second time I've heard it in my lifetime, so that's why I'm particularly interested. 

Marcus: Okay. Alright. Alright.

Well, well, you know, I can go there. I'm a technologist. This is, I know you are. This is, this is what I wanna talk about. Okay. Alright. But, but honestly, uh, the, the thing that caught my eye when I wasn't, you know, uh, [00:02:00] just trying to pull myself out of the quicksand, that was my to-dos this week. Sort of two things.

Um, and they were both DC related. Uh. You know, HFMA put out, uh, an article talking about, uh, what some of the actual impacts are gonna be. Mm-hmm. From, um, from the reconciliation bill, big, beautiful bill, whatever you call this thing. Yeah. 

Emily: One big beautiful bill. 

Marcus: Okay. Okay. That, that's the brand. That's the brand.

Well, 

Emily: that's the brand. That's the brand. And you have to have the hand motion. Yeah. Which, if you're listening to this, you can't see. It's like you get the feeling he's talking about something other than a bill 

Marcus: because, because guys, he's got a shape to it. Is there a shape to this bill? Oh my God. Kinda 

Emily: like an hourglass.

Marcus: Uh, yeah. So I want, I wanna, I want talk about that. 'cause it's been out there a while and I think the analysts have started to pick it apart a bit. Mm-hmm. And, and, and you are one of those good analysts. Uh, and then the other thing was, you know, kind of hot off the press today is, is, uh, is the court's decision around the tariffs and, and now sort of all of that stuff.

So anyway, uh, I. [00:03:00] I just got done with a call, it was either earlier this week or last week with our portfolio. You know, I do those quarterly calls mm-hmm. Where I, when I run through trends and I honestly was pretty pissed at the end of the call because quarter after quarter for what feels like two years now, you know, kind of when, when all the fed funds rate stuff really mm-hmm.

Got nasty. And I had to, I, I've just had nothing but bad, bad news. Right. For the, for the portfolio. Right. For two, for two straight years, right. Mm-hmm. In, in these, in these quarterly calls. Um, and, and this one was even worse 'cause not only was it bad news, but I didn't, there was nothing definitive I could tell them.

Mm-hmm. Because at that point I don't think there was a ton of clarity Right. Yet. So I'm excited to. To, to have you here right, to talk us through, uh, what you have found, um, and for me to ask you some questions about it. 

Emily: Okay? Alright. Okay. Well, so why don't I just offer up some of the key federal policy, um.

[00:04:00] Uh, categories. Okay. For lack of better word. Okay. And if you, you could go there if, for people who are watching this visually, you can see a list here, which is, you know, the first definitive policy we've gotten out of, uh, secretary of, uh, health and Human Services, Robert F. Kennedy. Uh, is this Make America Healthy again?

Yep. Commission report, which came out, uh, late last week. 

Marcus: Okay. 

Emily: The second piece of it is the one big beautiful bill that we were discussing. Yep. Which is moving through Congress. And then the third piece of it, which is still, uh, you know, uh, ephemeral is the deregulation piece. Okay. Okay. Okay. And those are right now the three major legs of the health policy stool.

Marcus: Okay. 

Emily: Um, this will evolve over time. The one big beautiful bill will become something else, you know, make America healthy again, is a. A template and a roadmap. So it's an initiative, right? It's an initiative and it sets the tone and the direction that the Secretary of Health and Human Services wants to take, uh, for [00:05:00] healthy.

And it is an important report because if you think about how, going back to the Affordable Care Act, how that was framed up in particular, less so when you look at Medicare and Medicaid and, and even going back to Social Security with, with Franklin Delano Roosevelt's presidency. But if, if you look really at the Affordable Care Act, and particularly that period, I don't know, around 2006 seven on the premise of the federal government is you are either sick or you will be sick.

Marcus: Yeah. 

Emily: And we need to make sure we have all the resources in place for that to happen. That, of course created a lot of supply. Yes. Right? Because you've got so much money pouring into the system. And of course, in healthcare, it's one of the few places where this happens, where, uh, that supply can drive demand, you know, because it's so technical in nature, people defer to their doctors, you know, and, and those kinds of things.

Marcus: Let me, uh, let me make [00:06:00] sure that I, I understand what you mean when you, when you say, um, dri driving supply. So I think what you're saying is the, the supply, uh, at the, at the core is enrolled is patients, uh, 

Emily: the supply members, enrolled members. The supply is hospitals, physicians, outpatient centers, uh, labs.

Okay. What have you. Okay. That's the supply. Okay. Okay. Okay. That supply is funded 55% by the federal government. Right. Okay. And that supply needs demand. Okay. Okay. Un unlike many industries. It can actually create demand. For example, you go into the doctor and your knee hurts. Uh 

Marcus: uh Got, got it. Okay. Got it, got it, got it.

Yep. Before you know it, you're 

Emily: getting your knee replaced in between here and there. Uh, 

Marcus: uh yep. 

Emily: Okay. Okay. Okay. Tracking. That's tracking. Tracking. Okay. Um, so, because, 

Marcus: because, you know, our industry's weird where it's like a triangle, right. So Yeah. So you could have meant the supply was as we [00:07:00] grow the number of enrolled members that grows the, the p and l for the payers, which then, you know, grows more throughput for.

So I just didn't know which direct you were talking about, but I I see what you saying. Supply 

Emily: the, the supply can induce demand. 

Marcus: Yeah. Okay. Sometimes 

Emily: nobody's happy about that. Okay. But that it can do that. 

Marcus: Yeah. 

Emily: Uh, so this is a seismic shift. When you say you're, everybody is sick. Or everybody's gonna be sick, and therefore we need to have insurance coverage.

Yep. And we need to have the, that, that, 

Marcus: that was the core premise. That was the, of the affordable care that really was, was everybody needs to have coverage. 

Emily: Right? Yes. Okay. And shifting that to you, you, your default proposition, the default proposition for all Americans is that you're healthy and you should, and we're gonna guide you towards the things you need to do to stay healthy.

Marcus: Yeah. 

Emily: Because if that thing that goes wrong at 50 doesn't go wrong until 60, and that thing, that heart disease or diabetes or whatever, it doesn't happen until 70. 

Marcus: Yep. 

Emily: Well, [00:08:00] you know, you've changed the whole trajectory of your health. Yep. And not just dying. And not dying. Not the binary part, but the, the, the quality of life part.

Yep. You know, that's important. 

Marcus: Yep. 

Emily: And in so doing, in so saying, all right, America. We believe you are first and foremost, healthy. We've got the systems in place. If you're not, but we believe you are healthy, you should be healthy. Policy should support good health. Uh, and that's how we are going to reduce the cost of healthcare expenditures in this country.

Marcus: Okay. 

Emily: All right. We're not going to cover everybody with insurance. We're going to make them healthy, and that's why it's make America healthy again. 

Marcus: Okay. 

Emily: And this, by the way, was the premise of, I have 

Marcus: to say, make America healthy again, is actually a clearer proposition than make America great again. Oh, I know.

Which is so much more subjective and like to who and what by what measures. Whereas, you know, health, we actually have like, I mean you may not like them, but we have the Rural Health organization. We've got, you know, we've got some, some things we could point to and we could say, this is what good health looks like, the Commonwealth Fund, et cetera.

So anyway, I just wanted [00:09:00] to, I just wanna make the point that this is actually 

Emily: well, and it, and it, it is culturally a big change. It's a massive change to say you're, you. All the children of this in this country should be healthy. They should not be obese. They should not have asthma, they should not have food allergies.

They should not have this cancer spike. They, you shouldn't. That's, none of these things should be the case. Yeah. So what do we do to fix that? Right. That's, that's a, that's a different thing. Yeah. And, uh, and that's a different way of thinking. Yes. So it's in a very important, um, change and it has created these really weird political dynamics where you find Robert F.

Kennedy testifying before the Senate 

Marcus: Yep. 

Emily: Uh, help committee. Yep. And he's doing battle with Patty Murray, Senator from, um, Senator from, um, Washington. 

Marcus: Okay. 

Emily: And, and she's asking him a question and he says, where have you been? You've been up here for, I think it's 32 years. Mm-hmm. What have you 

Marcus: done? Yeah. No, listen.

I mean, [00:10:00] for, for, I, I, I have to say for, for any of the, uh. Critiques of Robert F. Kennedy, and I think there are some fair ones. I, I think, I think there are plenty fair ones. Yeah. You know, the, the consistent problem, uh, at the core of things like trying to challenge make America healthy again, is it's, this has been the dirty secret that, I mean, I've only been in the healthcare industry for a decade, right, right.

But a decade is long enough to know that this the right 

Emily: decade 

Marcus: Yeah. Kind of right. And, and long enough to know that this was the thing that kind of everyone said needed to happen, wasn't gonna happen. Mm-hmm. And in the absence of it happening in the 10 years I was in it, I watched the spending double from two to 4 trillion.

Right, right. Yeah. And, and also in parallel, we had the rise of the longevity, the Peter Attias and Andrew Huberman, [00:11:00] and, you know. Wealthy people are already doing Make America healthy again. 

Emily: Right. So it always starts at the top. Yeah. Yeah. The 

Marcus: wealthy people are already doing it. Right. You know, and, and, um, and so this is really, uh, a, it's really a massive disruption.

It is. It's, this is a true, true disruption. 

Emily: It really is. And one of the weird political dynamics here is that you find people who you would think of as progressives. Yeah. Liberals defending the status quo. 

Marcus: Well, well, well, well, because it's because the disruption has. Consequences. Yeah. To get to the other side.

And, and so it's really about who was gonna have the political will to carry the disruption out. 

Emily: Right. And who thought it was gonna be Donald Trump? 

Marcus: No, no. Well, well, well, it really wasn't Donald Trump. It's Robert. It's, it's really Robert F. Kennedy. It's Robert F. Kennedy. And, and he played a very good game of political chess and, and put himself in the position to Brilliant.

If he wanted. Yeah. I would call it brilliant. I would call it brilliant. I would, I would agree with that. Um, 

Emily: so the [00:12:00] second part, one big beautiful bill that, yeah. That's, that's legislative. So we'll, is there anything else we 

Marcus: need to talk about on, on, on the Make America Healthy again, 

Emily: please? Um, no, I wanna show you a few, a few, uh, slides here.

A few pictures. Okay. Because I think the Make America healthy again, if you think of it as a top down mandate, you're thinking about it wrong. And if you go and you look at this next slide right here, do, do you want me to Yeah, just advance that. Okay. Um. Yeah, and you can see this is the year over year, if you're just listening to this.

The slide shows year over year, uh, historical and projected enrollment in Medicare. And what you see on this chart is that the American healthcare system was built for that period from say, 1978. Mm-hmm. 2012, where the post-war population really. It was the preoccupation of the healthcare system. 

Marcus: Mm-hmm.

Emily: And it's no accident. The Affordable Care Act was passed in 2010, where that big bolus of post-war population [00:13:00] was getting into their sick years mm-hmm. Their cancer years. Mm-hmm. You know? Mm-hmm. And needing to, and needing some answer, especially for the self-employed mm-hmm. Population. Mm-hmm. The healthcare system was not built for what's coming next, which is a very sharp year over year decline in the over 65 populations.

Marcus: Yeah. So, so the demo, the, the, the democracy. 

Emily: The democracy, democracy shift. Yeah. Yeah. So, and those, that democracy is going to be wanting different things. Yeah. Then the population that was born right after World War ii. Yep. 

Marcus: Okay. Fair. And so. 

Emily: And so the, so make America healthy again as a timely message, and probably not coincidentally, because we are moving past how the post-war generation defined healthcare Yep.

And towards Yep. Something different. 

Marcus: Yep. I'm 

Emily: not sure what that is. Yep, yep. Something different. Yeah. Yeah. 

Marcus: I mean, nobody's sure what it is, but everyone also can look at the, at the cost and the outcomes and, you know, I mean, I mean, this is hard, right? But like to say year over year, that Commonwealth Fund report, like, doesn't require some type of drastic [00:14:00] action.

Okay. Yeah. Well, I mean, you're, you're, you're kind of talking about running the country into the ground, right? Because that's, you know, the fundamental resources, the people, right? And, and, and if, and if you take that and you drag it over the course of 30 years, it means other countries are going to advance beyond the United States, right?

Like if these other countries pay less and have better outcomes. Mm-hmm. And in a, in another generation, if that, if nothing changes there, right. These other countries will advance past us. Well, and that's a timely, 

Emily: if you go to that next slide, this is the birth rates. All right? This is, this slide shows general fertility rate, uh, in the US and then the crude birth rate per a thousand women.

And what you see is since 2007, and I'm gonna mention 2006, seven a lot, I don't know what happened in 2007 other than the launch of the iPhone. Mm-hmm. Whatever it was, it wasn't good for 

Marcus: 2007 was the launch of the iPhone. That's for sure. That's for sure. 

Emily: So, um, if you look at this, uh, birth rates, they really start hitting the skids Yeah.

Um, on a multi, a decade [00:15:00] basis in 2007. So you don't have a population coming in to backfill 

Marcus: Yeah. 

Emily: That decline. Yeah. In the over 65 population. Yep. Is, is the most important. Okay. Uh, point of that. Do we 

Marcus: wanna go back to big beautiful Bill or, because I don't, I don't wanna steal your thunder and. Drive you.

So 

Emily: let's focus on, make America healthy again. Okay. And then we'll, we'll circle back to, um, okay. Sounds good. To, to that. And I wa I wanna say that one of the, in, in thinking about Make America healthy again, I think one of the surprise inflection points or this inflection point that nobody expected, because everybody is in pharma, big biopharma, everybody's sort of expecting it to behave the way it's always expected.

Mm-hmm. Which is you, you get a drug approved, you shove it through the reimbursement system, through the marketing system, and voila, you have a blockbuster drug. Yeah. Okay. Glip one drugs, if you go to that slide right there. Yeah. Glip one drug, great drug, does all sorts of Wonderful. Yeah. Okay. At a thousand dollars, at least a month.

You know, it's a, it breaks the bank. And this is a [00:16:00] slide that shows some of the Senate help committee's, uh, estimates of this. Yeah. But 

Marcus: the prices, the prices have come down pretty quickly. I mean, relative to other drug blockbuster drugs, I don't, I'm trying to think what else is like, come down this fast.

Emily: No. Well, and you've got a lot of compounding going on, putting a lot of pressure on. Yeah, 

Marcus: no, no, no. But that stopped, right? I mean, like, you got HIMSS and hers partnering with Novo now because they can't really do the compounding. Right. Yeah. I mean, right. 

Emily: Well, and they weren't getting the most important thing, which is they thought they would be able to get Medicare reimbursement.

Marcus: Yeah. 

Emily: And Medicare, they said, well, no, we're not doing that. And then they were like, well, we'll prescribe this, the American Academy of Pediatrics, like we'll prescribe this to children, you know, 12 and up. 

Marcus: Mm-hmm. 

Emily: And all of a sudden, you know, you hear the Robert f Kennedy's and people who care about health going, no, wait a minute, this is obesity.

Okay. This is if you, if we, if you're not in the camp of, well, everybody should learn to control themselves and eat right. And take good care of themselves, you're not in that camp. Yeah. 

Marcus: Which, which, which is very, very difficult given the [00:17:00] environmental factors that we've built up in America today. Right. I mean, I was just, I, I've been talking to people 'cause I spent, uh, a week in Mexico City and it's just you, you can't ignore it.

Like everything is walkable. And I get back to Nashville and it's like, I have to drive. You can't have to drive everywhere. I have to drive everywhere, you know? And guess what, like. That's just, it's just, it's just that daily decrease of cardio activity. Right. You know? 

Emily: Right. And if you're, and the, the food that we eat and the water and on and on and on and on and on and on, and this is the point of make America he healthy again.

And his, and you know, he actually calls out in the Make America Healthy again, report the use of these anti-obesity medicines. Mm-hmm. Because you know what you're, the trade off is this, is that we, your food supply is not great. You know, you're not getting enough exercise, too much screen time. Sure. All of those things.

Right. And, oh, what's the solution? Not more exercise, more sunshine, better food, a drug. And that represents, I think, an inflection point. People look back at it and go, oh, that was probably a big mistake. Yeah. You know, from the, [00:18:00] but, 

Marcus: but it, but it, it, it has become much more, um, look, uh, I, I'm someone who identifies as an athlete.

Mm-hmm. And, um, I recognize. Uh, um, that there are a million things about that, that I am blessed to have. Right, right. But I, but I also know that it is not. And I'm somebody who, who, uh, still pays attention to, to this. Um, it's not really politically correct from my position as an athlete to tell somebody else who may be, you know, struggling.

Hey, you know, why don't you do X, Y, Z? Right? Right. Yeah. You know what I mean? Like, like e even though. I know what it took for me to sort of get to this body composition and Right. You know, and it was, it was certainly resources. My socioeconomics absolutely play a meaningful role. And there's no question, but there's also like a lot of hard work Right.

That went into that as well. It's not, it, it, it, it is not, and has not been politically correct to push that as a [00:19:00] solution. Right. It is far more politically correct to push a drug as a solution. Right. That, that, that's just sort of the way our society has, has sort of, 

Emily: yeah. And, and, and in the case of the Glip one, anti-obesity medications.

Yeah. Um, the proposal right before the Biden administration left office was well having obesity, not obesity, you know, the, the, the noun, but obesity, the condition, having obesity is a chronic condition, and therefore, under the chronic, uh, condition coverage rules, Medicare, Medicare should cover it. Yeah. Now, that rule has been revoked, but, but just compare that to a, a policy that says, no, no, no, no, no.

You're, what we need to do is educate people on the importance of sunshine, fresh air. Sure. Exercise. Sure. And good food. Yeah. And it's basically, it's, you know, I was joking with, with, um, somebody else, like Yeah. It's just like your mom. Like go outside and play. Yeah. 

Marcus: You 

Emily: know? Yeah. 

Marcus: Yeah. Go get 

Emily: some sunshine.

Yeah. You know? Yeah. 

Marcus: Yeah. But we're a long way from that. Right. I mean, but we, we, we drifted. [00:20:00] We are, we're a long way from that. Now, 

Emily: drifted away from that because why? Because our philosophy became you are sick or you're going to be sick, and therefore we need to have all of these resources available to you.

Not you are healthy and you will continue to be healthy if as long as you are educated. And we support that with our management of the food supply chain, with our, you know, attitude towards drugs. Mm-hmm. You know, as a federal. Mm-hmm. Federal government. Mm-hmm. 

Marcus: Mm-hmm. So, 

Emily: um, just click on some of the key points from the Make America Healthy again report.

Okay. Are, uh, number one, uh, bad food, 70% of children's calories come from ultra processed foods. Right. Many of those in the school lunch program, I to point. Sure, sure. Uh, and many are actually designed the way, the way because of, um, you know, the, the advances in genomics and in in, in chemistry you can actually concoct, you know, a.

A food item. Yeah. An ultra ed [00:21:00] food item that, that limits the normal mechanisms in your brain. Sure. And said, okay, that's good. Sure. My husband buys these rolls at Trader Joe's. Okay. I have one of those, I think about it for the next 36 hours. Yeah. Yeah. I'm like, yeah. Oh, I gotta get another one of those.

Yeah. And then I'm like, wait a minute. It's just a role. 

Marcus: Right, right, right, right, right, right, right. 

Emily: 50% of the diet of pregnant and postpartum women are ultra processed foods, which is not great for Fabian Nutrition. Um, then another point they make in the report is the environmental chemicals. Um, there, the risk assessment that's done for environmental chemicals is conducted by the EPA.

Um, and it has, you know, it has minimums or maximums I should say. Um, and there's no, there's not really been enough research done on the cumulative effect of those things. Um, and then, um, there, it, they, they're finding is unacceptably high rates of chemicals and in the blood and urine of children and, and pregnant women.

Yeah. And then the last piece of it, which is really relevant to what we're talking about, is the overmedicalization [00:22:00] of children in particular, and what, as, as kids get chronically ill because bad food, not enough exercise. Yeah. Too much screen time. Yes. Alright. The health system, this big giant supply. Yeah.

Right. Response with increased prescription rates for a DH, adhd, uh, antidepressants, which, both of which were not even sure they work that great. Right. Um, antipsychotics not sure they work that way. And over prescription of antibiotics, which, which can, you know, be disastrous. And then, and that's what, what I said, the Glip one drug kind of, um, kind of, you know, represents an inflection point.

And, and they go on in the report if you, you know, go to the next one. Here's some of the stats. They give you prevalence of pre-diabetic children. Age 12 to 19. Mm-hmm. Um, now this chart goes back to 1999. If you took that chart back to 1975, it would be near zero. But, but 

Marcus: honestly, you don't have 

Emily: to. You, you probably don't.

Marcus: No, no. I'm, I'm just saying like, this is crazy. So, so for those 10%, yeah, for those who are [00:23:00] listening, uh, from, from 1999 to 2002, uh, it was in the, let's call 12% range. Uh, yeah. Call 12. Yeah. Yeah. We'll, we'll, we'll be generous. We'll call it 12%. And basically you just go across, and now from 2015 to 2000, uh, 18, it's, it's in the, you know, 28, almost 30% almost.

Yeah. Yeah. Almost 20% of 28%. So, so it's more than doubled, uh, over the course of the last. You know, decades, uh, the last two years mm-hmm. The last 20 years. Sorry, with, 

Emily: with what? That little inflection point in that 2003, 2006 period. Yeah. You know, it's like, okay, what's going on there? 

Marcus: Yeah. 

Emily: Um, but, and if you look at the next, like, cancer, um, uh, cancer rates, this is in the, um, uh, you could see an inflection point there about 2005.

This is cancer rates per a hundred thousand zero to 19, 19 75 to 2022. And you see a real bump up there around 2006, 2007. Yeah. You know, for both cohorts, you know, male and, and female and, uh, which is, you know, unheard of childhood cancers, you know, which [00:24:00] leukemia, for example, is a one that St. Jude has done.

Just a crazy good work on, on that, but childhood cancers are pretty rare there. Children are by definition, healthy, you know? Yeah, yeah. For the most 

Marcus: part. Yeah. For the most part. For the most part. Yeah. No, it's, it's, it's always, it's always surprising and, and, you know, dreadfully sad when, when a child gets cancer.

Emily: Right. Okay. So there's another, um. I think there's one more Nice little data. Oh, this one? You're gonna like this one, right? Okay. Okay. I've seen 

Marcus: this, uh, actually I think Vic and I went through this one last week. Did you? Okay. Yeah, yeah. No, no. We went through this one. Yeah. This is a 

Emily: rerun. Yeah. And this, I wanna give you some, uh, interesting historical, uh, facts.

So when Harry Truman proposed a universal health insurance program in 1945. Yeah. Okay. One of the statistics he cited was military readiness. 

Marcus: Mm-hmm. 

Emily: Now you can imagine if you're president and it's 1945 Sure. You're super interested in military readiness, right? Yeah. Yeah. Okay. 50% of the country, and it would've been just men at that time, would not meet the requirements for, uh, admission to, uh, mil enrolling in military, [00:25:00] uh, services.

Today it's 77%. 

Marcus: Yeah. 

Emily: Would not meet the requirements 

Marcus: that nothing about this surprises me. 

Emily: Yeah. And that's an increase of 6% since 2000. Yeah. Nothing about 

Marcus: this surprises me, uh, you know. Uh, I grew up in America and I also raised two boys in America. Right. Um, and you know, they are basically Gen Zs, right. Um, 26, 24.

And, uh, you know what they, so what I, what I told, what I told Vic when we were going through this, because I've got his son in the military, um, is that he was not, he, he was not ready like right before he went in. But they have, they have a program where they sort of like, they kind of get you tuned up, right?

Yeah. You know, they, they kind of get you tuned up before you actually had to boot. 'cause you can't, you can't off the street do boot. Right. Like mo, most people cannot off the street do boot. Now, having said that, having said that. Why do they have to have that primer prep before you get into B is the question.

Right. And did they always have to have that? And I, and [00:26:00] I, I just believe that when I was growing up, there was, there was just a much more fundamental focus on physical fitness. Like it was, it was, it was part of the deal, certainly. 

Emily: Oh, yeah, certainly. Yeah. We ended, certainly, we, we went, and this particularly showed up in that period 2007, 8, 9, 10.

Like, we ended, I think in 2012, the presidential fitness test. Mm. And went to this kind of band, you know, like almost, I, I say, you know, green, yellow, red. Mm. In terms of fitness. Mm. Instead of passing, not passing. Mm. Uh, and the course, the point was to de-stigmatize. Yeah. Yes. And you just pointed out Yes, yes, yes, yes, yes, yes.

The, the obesity thing, you know, de-stigmatizing. But you know, where, where's the point where you're. Your empathy Right. Becomes actually, you know, socially destructive. Yeah. And so, and that, and that's I think where, where the MAHA Committee is. 

Marcus: Well, well look, I mean, think, think about it on an individual level, right?

Right. Does [00:27:00] an individual make change by giving themselves unending grace or by saying Enough is enough shit, get your, get your ass up and go do the walk or drink the water or put the damn soda down, or whatever. Like no real No. Really though. Like, like what, what is it for an individual that actually drives them to change?

Right. You know, and then you think about that at the scale of a, of a nation. Right? And, and, and how, those two things. I mean, it's, it's one of the things that, that has been hard, hard for me, um, because I'm a StrengthFinder says I'm not a very empathetic person. Uh, and, and so, so. No, but, but this is, this has actually been kind of a hard thing for me over the course of the last 25 years because, you know, as you know, like I don't have any credentials, you know, college dropout sort of all the things.

Um, but, but you know, we have, uh, you know, at least up until now, you know, lived, lived in the society where, uh, your, your, your effort and, and being in the right place, you know, can, [00:28:00] can really help. You can overcome a lot. Yeah, you can, you can overcome a whole lot. Oh, shit. Yeah. You can overcome a lot. And when, when I look at a lot of people who, you know, are struggling from one.

Reason or another, and you know, to be honest, I don't spend a lot of time with, with those people. 'cause you know, as you, as you rise up, like I think about people who I've been in Nashville Healthcare Fellows with, or the Aspen, it is like, these people are like super achievers. They're like unbelievable.

They like, all of them, like have three jobs. One is their real job, one is like some big community role. You know what I mean? Yeah. But, but like there's, there's just an effort and a seriousness, right. To achieving. Yeah. You know? And that includes your health. It does. It does. It does. It does. It includes your health too.

Yeah. 

Emily: Well, and it's of course all related, you know, uh, how get, be feeling pre fulfilled about what you do with your day. Yeah. You know, makes you feel better mentally. And that is makes you feel like getting out and taking that walk. Yeah. So, so those things are all connected and that, that, that's kind of been missing.

And, and there, there's nothing wrong with social structures. There's nothing wrong with the social structure. Of course. Of course. So that says, you [00:29:00] know, weighing 400 pounds is not good. And what do we, and the other part of that is, what do we need to do to fix that? And I think that's what make America healthy is, is trying to do.

Yeah. But we really ODed some basic standards of health over the last, you know, uh, call it 20 years. Yeah. You know, just under 20 years. 

Marcus: Which, which would be fine if. In aggregate, those did not cost America correct. A like, like, like if truly there was no impact to the, to the, to the rest of us. 

Emily: If you're, if you're on a mountain in Utah, you know, and you're in poor health, then you, you're gonna deal with the consequences of that.

Right? Right. That's right. Right. But when you push those consequences off on other people, and, and I'm, I'm, I, I actually used to be very empathetic, and now I'm getting to the point where you remember that, uh, Chrissy Hin song, uh, will you stop All Your Whining? Yeah. I'm like, please, people's whining, you know, just Oh, 

Marcus: okay.

Okay. But, but I, but I do, I do want to get to what I think is the sticky point on, [00:30:00] on the whole Make America healthy again bit. Right. So I did read, uh, the, I, I didn't read the full, the full report, but I did really read the press release kind of about the, the, the Maha, uh, iteration on CMMI. Right. You know, the right there, there were Center for Innovation and kind of, you know, the talking points.

So Vic and I were, were discussing how, in a lot of ways it, it looks. It doesn't look that different from CMMI. It's, it's, it's prevention, it's value-based care, blah, blah, blah. Except the, the difference is where the focus is in terms of what, what, what needs to change. Right. Right. Yeah. You know, and, and Rick Abramson, I think, did a really good job when he was a guest on the show talking about, um, you know, how the three big things that contribute to your health are, you know, genetics, environment, behavior.

Right. And maybe, you know, past administrations and, and perhaps there's, you know, a particular partisan leaning in this was probably more focused on genetics and, and environment and 

Emily: especially genetics. Yeah, 

Marcus: yeah, yeah. But I, I think environment as, as well Yeah. Sort of, [00:31:00] sort of was in there. Whereas, you know, Maha is, is going pretty heavy on behavior.

Yeah. Right, right. And, and so that's, that's sort of the shift. Now, of course, that's fine, but that doesn't quite jive with, I. You know, the focus on big food. Right. Because that's, that's, 

Emily: that, that's a regulatory problem. That's a regulatory problem. 

Marcus: Right, right. That's a, that's a regulatory, and, and a fair number of these things are actually regulatory problems.

Right, right. I mean, I would, I would say, I don't think this extent, this, this is limited. To things like big food and environment, I would say, why the hell haven't we better regulated, you know, Facebook. Yeah. You know, like, like we all know what Instagram is doing to, to all of us, but certainly to the kids, right?

Yeah. You know, but we don't, you know, we don't regulate it. Right. Yeah. And then, and then we try to tell, we know that, that they have hired the best behavioral scientists that they can Yeah. You know, to, to do the same thing to these kids that those Trader Joe's roles, roles are doing to me do to you. Right.

But, and, and then you wanna say responsibility and behavior. Yeah. You know, it's like, uh, can, can we can, can we, can we maybe [00:32:00] 

Emily: get to, you know, and as a parent, you know, my oldest is 31, my youngest is 26, fighting the up, the fighting, the cultural stream, especially for my youngest, it's so hard. It, it was really hard.

It's so hard now. At one point I was gonna get t-shirts printed up. That said mean mom, you know, on em. Yeah. 'cause um, and, and you know, it, the, the way in which you're 

Marcus: not supported as a parent, you are not you, you're not supported. You're a loser parent. And I, so, 

Emily: um, so let's get, look at a little bit more of the Maha.

Scroll down, if you would. Yes. Um, okay. So we do have to talk about this because this is very important part of the parental health movement has focused on the vaccines. Yep. Okay. And COVID was another inflection point. Yes, of course. 

Marcus: Of course. 

Emily: Particularly when we, we said give pregnant women, you know, COVID vaccines, which is we don't give pregnant women diet Coke.

Okay. It, there is no basis for it. It's, unless you're having to [00:33:00] make the. The drugs, but, and also for children, we knew they weren't at risk, but we, we did that anyway. We mandated those things. And what happened? Trust just went through the floor. Okay. And so now you see vaccine exemptions. These are exemptions that are, um, asked that are non, uh, non-medical or non, yeah, no, sorry, not religious.

These are just, I'm not going to vaccinate my kid for school. Mm-hmm. Mm-hmm. And you see, what does it do? It hockey sticks in 20 and 21. Why? Because of a loss of trust. And the, the, the kind of, the health policy intelligence is really upset about this because they're like, well, this is one of our great tools, which is gr, which is really true.

Yeah. Right. You know, especially with the right. Like take measles, right? It's a highly infectious disease. So a a a pregnant woman walks into a room and a child is just developing measles and is, and is transmitting that, that could make that child sick for one that probably recover, but that could kill that baby.

Mm-hmm. You know? Mm-hmm. In utero. Mm-hmm. And so, so there's, there's a public policy reason for [00:34:00] that. Yes. Um, but in mothers around the world are being told to inoculate a six month old against a disease that, you know, the, the number of six year olds that died of COVID are in the probably single digits. If in fact that's what they, they, you know, they didn't have other things.

We don't know. Um, but, but like, huh, I don't, I don't trust the system. I don't trust anything about you. And so what has, what Robert F. Kennedy and the Secretary of As Secretary of HHS and Marty McCarey as head of FDA, they changed the COVID vaccine policy this week. 

Marcus: Yes. Yes. 

Emily: And what they did is they opened the door for.

For, okay. If we're gonna be, if we're gonna be approving vaccines, we are going to require a more rigorous, uh, standard of evidence. Okay. Uh, now that was a lot of the health policy. People are like, oh no, that's terrible. No, that's not terrible. What they're trying to do. And they said this explicitly, we are trying to reestablish trust.

Marcus: [00:35:00] Yeah. 

Emily: So we can either sit here and do nothing and trust continues to, or we can do something. 

Marcus: Look, I I think that's fair and that's good. Y you know, you have to also acknowledge all of the things you said are, are correct. I know people, you know, who I think are smart people who, who came to those same conclusions.

Uh, but I, I think you also have to acknowledge we now live in a very, very, very different information Age, right? Like, yeah, like the. On high does not control the flow of information anymore. No, no. It, it simply does not. No. And, and so you have to think about trust in a different way because you're, I don't care what side you're coming from, like you can have the absolute most truth in the world.

And there's a fairly robust group of like flat earthers out there right now that like they, they've got a megaphone, they've got YouTube channels, they've got whatever. Yeah. You know, and, 

Emily: and your, and your job as a lead, as a public official and speaking from somebody who was in office for nine years, your job as a public official is this really fine mix of I am [00:36:00] going to lead you.

Marcus: Yeah. 

Emily: But sometimes I have to talk you into it. Mm-hmm. You know, in other words, sometimes I have to make my case. No, I get that. I 

Marcus: get that. Yeah. And just 

Emily: because I'm here at the front of the room, you know, or secretary of HHS, you know, at the podium or whatever does no longer means you trust me. And, and so I have to, I have to.

Tell you why you should. Right. And they're starting with, in, in this, to rebuild this trust. They're starting with a flashpoint, which is, 

Marcus: and and it is a flashpoint. And it is a flashpoint. Yeah. 

Emily: Yeah. 

Marcus: It is a flashpoint. Yeah. 

Emily: Okay. All, um, alright, so keep going and then let's, uh, let's go onto one big beautiful bill.

Alright. All right. Which is, that is the ta name that the president gave to it, um, as a way of trying to convince the, uh, the, the house speaker of the house. 

Marcus: Oh, okay. Well, well, I, I, I just wanna make sure we, we close out the, the, the whole Maha thing. Oh, yeah. Mm-hmm. So I, I know about the COVID vaccine. I get that, um, I understand [00:37:00] this, this treatise that was rolled out last week.

This, this sort of mm-hmm. You know, this, this is the, I mean, what is it? The, the manifesto effectively like, like, like it's, 

Emily: it's a commission report technically, but it, I, but, but like, I call it the roadmap. 

Marcus: The Okay. The roadmap. Okay. So what is practical in there? Because, uh. I'm, I'm, I'm trying to sort of understand the impact to the industry right now.

Okay. And, and be, and I wanna do this before we get to the bill. Okay. Because we, the bill is so focused on the impact of the industry Right, right. Through, through budget. Right. You know, allocations. So I, I wanna understand what, in there, when, when you, when you say people are gonna be healthy, to me that circles back to the beginning of the conversation when we were talking about supply demand.

Right? Right. Okay. If people are going to be healthy, you are assuming we are oversupplied today. Right? For, for, for the, for the world we want to be in, we're oversupplied, it should 

Emily: be oversupplied on both demographics and on the world we want to live in [00:38:00] today. Okay. Yeah. Okay. Okay. Both, both parts of that.

Marcus: Okay. So, so, um, and I, I, I want to steer clear of the, of the budget stuff. Okay. But what things, what indications do we have are coming from, from HHS mm-hmm. From a Maha perspective, okay. Yeah. That. Are expected to decrease supply in the short to midterm. Some these, these, these big changes they're talking about, those will take, 

Emily: they're generational.

Those are 

Marcus: generational, right? Yeah. So that's, that's not really that 

Emily: Yeah. Would impactful today, I would say the first thing, uh, the, the first and obvious is the biotech and biopharma. Okay. Okay. Um, and you're seeing this complete meltdown of the biotech industry, which is overfunded, probably over earned, crowded into the same trades as we say the same ideas.

Marcus: Can, can I, can I. I, I'm not challenging. I just, I want to qualify [00:39:00] when you, when you say things like overfunded, right. Um, it's not a space I invest in. Right. Um, and the reason why I don't invest is because of the capital intensity. And quite frankly, I just don't, I'm just not connected to the kind of capital partners that will take something all the way through, all the way through the pipeline.

Right. So it, it's, it's just not viable for me. Right. Okay. Um, what I observe about it is that even if you get the science all the way through, and the science is remarkable, um, where, where things often get tricky is the economics of it. 

Emily: Yes. 

Marcus: It's, it's, especially 

Emily: if you're talking about like gene editing Yes.

And some of this really important stuff. Yes, 

Marcus: yes. There, there, there's a combination of immature delivery mechanisms out there today. Mm-hmm. Our manufacturer's not quite there. Our cold chain is not quite there. You know, there's more things we'd have to build out there, but also also. Th there's just an economics challenge Yeah.

Of how you take this asset that works perfectly, and then make it into something that's sustainably going to make money for. 

Emily: Right. All the, all the counterparts. Okay. So [00:40:00] let's take, let's cut the biotech industry in half. All right. Okay. And let's talk about the problem area. Uh, and when I say overfunded, I'm really talking about that part of it.

Yeah. Yeah. It's, I, I'm 

Marcus: glad I wanted to double click and I, I wanna get into what you mean there and 

Emily: when, and this is this part of the industry. It, it's, it's been a case of, um, get some research that's funded by NIH mm-hmm. At broad. Mm-hmm. Uh, or at uc d um, urban or, or mm-hmm. Or John Hopkins, whatever. Sure.

Alright. That particular project then gets spun out through the commercialization program. Okay. At those different universities. Okay. Okay. Um, and, and then that commercialized product, whatever, it's, at this point, you know, it's, it's, it's not re there's no revenue, right. There's not, in a lot of cases, even a, a trial that you can point to, um, that there's so much pressure to get the original funding out of NIH that a lot of those, uh, [00:41:00] commercializations projects or a lot of me too stuff, a lot of, um, stuff that the, where the sciences, the great Alzheimer's is the poster child for that.

The drugs. Okay. Okay. Um, and the, the system is corrupt is too strong a word. Everybody's responding to the incentives that they're given. Yep. Okay. Um, but those incentives are bad. And, and so you have a lot of biotech companies that just never got anywhere because. Science wasn't great, but there was lots of VC money to throw at it.

And, um, and, and the ones that were viable were getting bought by biopharma for, to make it all the way to the commercialization. That process is nearing, its its end. Okay. Then you have in biotech this stuff that isn't even really biopharma when I think about it, like gene editing. Mm-hmm. Mm-hmm. You know, so we just had a big headline.

Um, A a a a Baby, the Baby. Yep. Yep, yep, yep. Alright. [00:42:00] That is a, a process. Okay. That is scientists. Yeah. In a hospital. Yes. That's not really a drug in a bottle. No, no, definitely not. Definitely not. So, so the, we're coming to the end of the drug in the bottle. The drug in the vial mm-hmm. Mm-hmm. Kind of of 

Marcus: thing.

Mm-hmm. 

Emily: Unless it has a strong. Strong history of evidence. And that's the new policy, uh, at the FDA. So a lot of me too drugs, a lot of drugs that don't work, a lot of drugs that increase your overall survival. And I'm being hyperbolic here of course, but increase your overall survival two months and you throw up the whole time.

Yeah. I mean these are, these things happen. Yeah, sure. Okay. That's the kind of stuff that you're gonna see start to fade away. I think biopharma is in really deep, deep Do-do, to put it technically. Well, 

Marcus: I mean, I, I think, I think it was challenged. I think it's been challenged since 2021. 

Emily: Really? So, yeah.

Because what, since 2021, you have all this loss of [00:43:00] exclusivity. Yeah. Which you've known about for years. Yeah. And so Pfizer in particular, uh, but uh, also, you know, Merck had this idea, Santa Fe had this idea, alright, all this money coming into COVID. We use that vaccine as a bridge Right. To something else.

Right. All right. Problem is, there's no wealth there. There's, there's stump, there is no something else. Yeah. 

Marcus: There's no something else. Um, 

Emily: o ozempic became another bridge. Yeah. Okay. And everybody had to have an anti-obesity medicine. Meanwhile, we don't, still don't have a good therapeutic, uh, for Alzheimer's.

ADU helm, you know, and it's, I can't remember the, uh, the other drug. These aren't great drugs. Yeah. You know? Yeah. And, and they have a lot of clinical problems and you need a lot of supervision and so forth. Uh, we, Parkinson's, you know, they're Yeah, yeah, yeah, yeah. You know, childhood orphan, there's all these things that are happening and we're shooting people up with those.

Epic, okay. Um, so, so that first thing is, is definitely the pharmaceutical industry, um, which will, uh, I think it's inevitable. It's gonna have to get smaller, it's gonna have to restructure, uh, and it's gonna have to redirect its attention. Um, yeah. I mean, you can, you can, you can see it, you can see it, you [00:44:00] can see it happening.

I mean, there's a lot of denial. 

Marcus: No. Well, I mean, you know, Vic does a good job of grabbing stories every week. So, I mean, the, the, the story kind of bear it out like, like, uh, like Lily's a world beater. Um, and then. Past them. It gets y 

Emily: Yeah. I mean, 

Marcus: past them. It, it gets, it gets a little, you know, it gets a, it gets, it gets a little shaky.

Yeah. Um, and 

Emily: even Johnson and Johnson, you know, their blockbuster drug is gonna be for something called well smoldering melanoma. 

Marcus: I, I mean, you know, the good thing about Johnson and Johnson is they're like, they do other stuff. Yeah, yeah, yeah. Yeah. They, they, they've got enough, you know, they, they got enough diversity.

They are the healthcare 

Emily: industry. Correct. 

Marcus: Correct. They got enough diversity that it's like not that big a deal for them. I would put them out, you know, I would put them, I'd put, I'd put Lily, you know, Roche appears to, to sort of be in a D Regeneron is an interesting, Regeneron is really cool. Yeah. It's very cool.

Regeneron ISS really cool. Yeah. Um, I mean, there's just a short list of names we could say like, okay, these are the ones who are doing like, really cool stuff. Good. But like, there's a. Bunch where, you know, you read the stories every week and you're like, ah, man, they're like grasping at straws and don't really ha, you know what I [00:45:00] mean?

You could just 

Emily: hear '

Marcus: em. Yeah. No, no, no. Like, like there's a, there's a lot of challenges out there. Yeah. So 

Emily: that's the first part of the industry that's gonna be affected by making America health healthy, healthy get. Okay. Then I think the next, my next, um, target is going to be the mental health industry.

Mm, interesting. And, uh, although the mental health industry, we had a, a real big push. We de-stigmatized it back to the social, you know, aspects, cultural aspect. We de-stigmatized it, you know, mental health was something that people need to take care of, which they do. Um, uh, but since, in particularly, what, what, 

Marcus: what, what parts of it is it SSRIs?

Emily: Uh, so it's a, it's the drugs, SSRIs, uhhuh, the A DH, ADHD drugs, Uhhuh, the antipsychotic. They don't, these do not have great records. And they also may have, uh, impact, and I say may because the research is not great, uh, on the development of the prefrontal cortex. They may have. Okay. 

Marcus: So, so, so I think we're, we're talking not just mental health, but like pediatric mental health.

Emily: We, we are specifically talking about pediatric mental health. Oh, oh, okay. 

Marcus: Okay. Okay. 

Emily: Then we [00:46:00] have a, um, Abigail Schreyer wrote a book called Bad Therapy. Yeah, yeah, yeah. Okay. And this, which is all about, you know, are we, are, are we letting the difficulties of childhood? Yeah, yeah, yeah. And. Teenage We, yeah.

Marcus: Again, pediatric mental health. 

Emily: Can we work? I I I, I I got it. Yeah. I got it. I got it. Can we work through that better? I, and then it add in Instagram, right? I got, I got it. And you got yourself this. I got it. I got it. I got it. So if you 

Marcus: I got it. 

Emily: Pull that, uh, that part. So I, so I think it, the, the youth mental health piece of it piece.

Marcus: The youth mental health. Okay. And I think that's gonna 

Emily: form the inform the adult mental health, you know, the, the research going on about how the gut biome relates to mental health. Yeah. Still early. Yeah. But that could be a complete Yeah. I mean, different approach. 

Marcus: I mean, we, we, we need to have a different, um, we need to have a different mindset on diagnostics.

Mm-hmm. You know what I mean? And, and, and let people test their damn bodies. Yeah. And like, and get a better understanding of their unique. You know? Right. Yeah. Composition and, and what they should be eating, what they shouldn't eat right now, that's [00:47:00] so like shameful to be like someone who wants to get tests on yourself.

Right. You know? Um, and, and it's not supported by, by the healthcare system. Yeah. Here, can I write you a, a script? Yeah, yeah. It's, it's, it's not part of the preventative model, right. To like get enough diagnostics so that you can learn yourself, so that you can actually take care of yourself. So, right. And I this, so that, that to me is more fundamental than like.

Actually addressing, you know, overuse of, of drugs and things like that and overuse of therapy. But, but Sure. Yeah. And 

Emily: then the next piece of it, the next, my next is agriculture. Yeah. That's probably a near, near term. Okay. Thank God change. That's a 

Marcus: good one. Yeah. I think, I think most of us are happy about that.

Emily: Yeah. Uh, I don't think anybody's gonna be, um, too, no. Too happy about that. And then in terms of services, you know, there, you're, there's gonna have to be some, uh, share taking, it's gonna have to run more, um, more efficiently, but that, that's probably out a good, you know, four or five years. Okay. Although we're already seeing those changes.

Yep. But, but that's where it is. 

Marcus: Yeah. 

Emily: And I think something that is actually really exciting and now that we've gotten past the [00:48:00] AI is bad in healthcare. Yep. The idea of wearables and that. That sharing responsibility for your health. Mm-hmm. You know? Mm-hmm. That is something that has the possibility of very nicely into make America healthy again.

Totally agree. Especially as totally agree, those things advance. Totally agree, 

Marcus: totally agree with that. Yep. That's a good thing. 

Emily: And then, and then the, the data that you gather and the information that you gather and you, you get to a place where you're, and, and any doctor will tell you this, the healthiest people are the people that engage in their own health.

Marcus: A hundred percent. 

Emily: You know, and hundred percent. And it, and that's the, that's the piece of it that I think will Yeah. Will come in the near term, uh, as well. So, 

Marcus: okay. That was, that was, that was solid. Alright. Alright. Big beautiful Bill. Let's go. One big 

Emily: beautiful bill. Alright. Alright. So one big, beautiful bill is pending, uh, uh, at the Senate right now.

And the one big beautiful bill is, um, uh, passed the house. With a lot of criticism, it didn't cut the deficit enough. Now let me just make everybody sure. Everybody understands that that deficit number comes from the Congressional [00:49:00] Budget Office. Mm-hmm. Which has a record going back since the founding, actually the Congressional Budget Office of getting it wrong.

Mm-hmm. Yeah. 

Marcus: Yeah. 

Emily: And particularly when it comes to raising and lowering taxes. Yeah. Why? Because it's an immensely dynamic system. Yeah. Yeah. And And they do the best they can. They do the best they can, and they're always wrong. Yeah. Yeah. They do the best they can. Yeah. Now, if you're talking about fairly simple stuff, not so bad.

Yeah. If there was, yeah. So it was criticized on the house side for not cutting the deficit enough. The deficit defined by, okay. You know, the city, I don't 

Marcus: care that much about what it was criticized on the house side. I mean, the house is kind of a. 

Emily: But as you, but the important part is the Senate 

Marcus: that I care more about this.

Okay. The Senate I care more about the Senate. The Senate, the 

Emily: Senate's got the bill. Yeah. And they're actually saying, yeah, maybe we should have cut the deficit more. 

Marcus: And we're hearing, okay. So the Senate is saying that 

Emily: the members of the Senate are saying that. Okay. 

Marcus: You know, like, like what are the numbers that, that, that are being talked about?

And, and also like, can you talk about key players? Like who, who's, who's sort of being vocal that matters here. Okay. 

Emily: So the vocals [00:50:00] on the senate side are Mike Lee, Ron Johnson. Um, uh, who else? I haven't, you've not heard from any moderates. Um, John Cornyn, who's got a mm-hmm. A primary challenge mm-hmm. Uh, in Texas, uh, um, Ron Paul, um, who is, is just, you know, a curmudgeon about, uh, deficits.

Mm-hmm. Mm-hmm. 

Marcus: Um, 

Emily: there's enough there to, to affect it. And the most important part is the president. Kind of backed off of that. Okay. Just passed that bill. Yeah. If you think it needs more deficit reduction, you know, let's, let's see that proposal. 

Marcus: Okay. Okay. 

Emily: And the areas that are most likely to be a target is the fma, the federal matching rate, uh, for Medicaid programs.

Okay. In states, particularly for the expansion populations. Yep. Yep. So that would affect your California I, Illinois, New York, but not Texas and, and Florida. Right. Okay. And this slide here, this, I ran [00:51:00] few scenarios on how many people would come, I mean, off the rolls 

Marcus: mean that's really surprising 

Emily: what, 

Marcus: what you just said 

Emily: it is.

Marcus: Well, where, where they're looking to cut the deficit anyway. Oh 

Emily: yeah. Well it, you know, the Medicare expansion population is the, um, these are Medicaid. Medicaid, I'm sorry, Medicaid expansion population are people who are, um, between um, a hundred, uh, between a hundred and 138. Percent of the federal poverty level.

Uh, and many of them are working, you know, um, and, but they're all able to work. Okay, sure. 'cause they are, they're not in the other categories in Medicaid, blind, disabled, dual eligible, uh, pregnant women. Yeah. And children. Yeah. You know. Yeah. But, but year. But, 

Marcus: but you're, but okay, let's, let's, let's take that profile for a second.

So, on one hand, they want the work requirements, right? Like, you know, if you want Medicaid and you can months, the, the worker requirements 

Emily: are in the house bill. Yeah, yeah, yeah, yeah. Right. Effective in 2020, uh, [00:52:00] 7, 6, 6. Oh, they pulled it back. It was seven 

Marcus: and they pulled it back to 6 26. It was 29 

Emily: and then it became 26.

Marcus: Oh 

Emily: yeah, the 29 was kind of a joke. It's like, oh, well, where the states aren't ready. I'm like, oh, for heaven's sakes. It's not that hard. 

Marcus: Yeah. I, I I thought it was 27. Pulled to 26. Yeah. No, 

Emily: it was 29, pulled to 26. Oh, okay. 

Marcus: Alright. So, so, so work requirements are likely for a large part of those who are part of the Medicaid expansion.

Um. Checked off, but, but still, because they're a hundred to 140. 'cause I mean, you talk like the, those states have, I mean, I know it's all relative, but those states have really high cost of living and, and 

Emily: they do. Um, and, uh, I think that the, um, the pushback on, on that is if you look at how much the federal government pays as a share of the total bill mm-hmm.

Uh, for Medicaid mm-hmm. In expansion states for versus non-expansion states. Mm-hmm. It's high. Mm-hmm. What, what is it? It's in the 70, 75%. Okay. So [00:53:00] the, the, the whole program, the original program was we'll pay, you know, roughly half. Okay. For California is a wealthy state. Yeah. For example, we'll pay half, uh, the federal government will pay half.

You pay the other half. Uh, a state like Alabama, the federal government will pay 60%. You'll pay, you know, 40%. But, but what's happened is the way in which the financing systems work, which I won't border anybody with right now, has created this system where the federal government is now paying roughly. 75% of the bill, even in a state in California where it should be half.

Mm-hmm. And that has to do with the medi, the expansion population where there's a 90% match. And it has to do the way, with the way in which California very carefully and strategically makes sure people are classified in a way that is, um, that, that gets the highest match possible. We're talking about state incentives.

Yeah. Yeah. It's incentives. Incentives, incentives. Incentives. Yeah. Those, those incentives, back incentives. So that, that's kinda what the, the. The, where the play is Okay. Is in [00:54:00] those, the, the matching dollars from, uh, from the federal government. Okay. And, and I think that that's a, um, uh, the other part of it, the other debate is on covering undocumented individuals.

Mm-hmm. California made a very big deal about how we're gonna cover undocumented people. I thought at the time, how do you do that? They, they say, well, we're using our money because the federal government doesn't allow, you know, to use federal taxpayers for undocumented in Juul. Um, but when you actually pull the numbers apart, there's no way the federal government's not paying for that.

Um, so, so, um, ano another piece of it is we are not going to pay for undocumented individuals. Yeah. I, I 

Marcus: don't, I don't expect that that to happen. 

Emily: Yeah. I don't either. And that if you go to this slide right here, I, I'm, I, I charted, see how California, um. The national Medicaid enrollment is a year over year change.

Look at that. That's the dark blue line. And then the Medicaid enrollment year over year in California. And see how those lines are just very close [00:55:00] together all through 20 18, 20 19. Mm-hmm. 2020. And then in 2023, when California says, okay, we're gonna cover undocumented individuals in the state. Look what happens.

The, you get the disenrollment across nationally and California doesn't behave the same, stays high. Yeah. In Cal, California. So my estimate, there's about 2 million people in California, for example, that are not, uh, are probably gonna have to come off those roles. And Gavin Newsom, the governor has, has said, yeah, we're gonna have to, uh, reduce that.

That, yeah. And he, 

Marcus: he, he's already talked about that. Yeah. Yeah. So there, 

Emily: there's a lot of consensus on that. The goal is, I, I mean, there is a goal and there is a desire to get Medicaid expenditures back to the 2019 level. I think that's gonna be hard to do. 

Marcus: Mm-hmm. 

Emily: Um, but that's, uh, that, that's a goal on the side.

So that's where the, a lot of the focus is. Okay. And I'd say most of the focus 

Marcus: Okay. 

Emily: In the one big beautiful bill. And then, um, we do have, let's see, alright. Supplemental payments. You had asked me about this. Yes. Right? Yes. And so there's two, um, financing mechanisms that are under scrutiny. [00:56:00] And then the, and the house side said, the house said.

Okay. This, and I'll explain what they're in one second, but supplemental payments and, and state directed payments. Mm-hmm. Those are, um, whatever is in place now. Mm-hmm. Okay. I can stay there. All right. Okay. We're not gonna do any more of those. 

Marcus: Okay. That, that was what the HFMA article was referring to, which is like, there's not this huge fallout, so the for-profits are actually gonna be okay.

Emily: Yeah. Everybody should be okay because it's a kind of a status quo. 

Marcus: Do. Okay. Alright. Was that lobbying? 

Emily: What, oh, I'm sure it was, but it also is practicality, right? When you take that much money out. 

Marcus: No, listen, listen. Yeah. I've been wondering how the hell this is gonna work. Yeah. I mean, I'm like, that is not, that's not gonna work, right?

I mean, that's gonna crater 

Emily: You're 

Marcus: the health systems. 

Emily: Yeah. You're moving an aircraft. 

Marcus: Yeah, yeah, yeah. No. Okay. Okay. No, that, that, that's why I wanted to talk about this. Yeah. Because like we've, we've been, you know, we've, over a week we're talking about the supplemental payment state, state [00:57:00] directed payments, and it's like.

Guys, I understand you want to kind of correct this potential loophole, but. Yeah, it's, it's, it's now core 

Emily: right now to operating and the, the be it's core 

Marcus: to operating. Let me just 

Emily: stop and explain what the two, the two are and the difference. Yeah. Supplemental payments are created when a provider, um, agrees with the state in which it operates in that it will pay more provider taxes.

That's typically a bed tax. Okay. I'll pay more taxes, and what happens is that money is paid by the provider to the state. Then the state uses that money to match federal dollars. Mm-hmm. Then that money comes back to the state. So $1 becomes $2. Right. Okay. And it's redirected back to the providers. It cannot be done on a quid pro quo basis.

Okay. You know, you just because an HCA hospital in Houston Yep. Paid, you know, a million dollars doesn't mean they get $2 million back. Right. That's the, the one of the rules. Okay. Right. Um, but nonetheless, as you could see from this chart, who [00:58:00] benefits from supplemental payments primarily in patient hospitals.

Okay. Um, it is a, it's always been very bipartisan that. That the, uh, Chris Jennings, who worked for, uh, the Clinton administration, he said it's a national scandal. How we pay for Medicaid, you know, because it is so opaque. But that's how supplemental payments work. Now, state directed payments are a little bit different, and mostly what those are, and there's some differences, but, uh, mostly what those are is a Medicaid managed care organization.

All right? Um, be because there's, you know, fee for service, uh, su supplemental payments exist largely in fee for service. But if you're a Medicare, Medicaid managed care ser. The program, how do you get that supplemental payment thing to happen? Yep. All right. So they came up with state directed payments, and what happens there is in most cases, the Medicare Managed Care organization agrees to pay more taxes.

That does, it makes it same round trip, more taxes go to the State Treasury. State Treasury matches [00:59:00] those, those come back and then the state tells the managed care organization, alright, send that money to those hospitals, that money to those nursing homes and, and, and so forth. Right. Okay. Um, and it is a, um, again, a very opaque.

Process. And, uh, in the supplement case of supplemental payments and patient hospitals are most likely affected. And if you go to this next slide, this is the state use of state directed payments. All right. On the one ca case, you know, most of the money is used for uniform rate increases, and that's raising the rate for everybody, um, in the state.

Mm-hmm. Who provides services to Medicaid patients. And then there's a few other things, like if you have a value-based purchasing program, it will reimburse you for that. Okay. So we got 11, 

Marcus: 11%. Yeah. Going to VBP. 

Emily: Exactly. And um, and this has been criticized because of some redistributive effects and a few other things which are very technical in nature.

Um, but this is the other area, uh, that has been a focus, uh, Paragon Institute, which is pre-con conservative, [01:00:00] uh, group that has got lots of former Obama, uh, former Trump officials in it, has been calling this money laundering or legal money launder. I, 

Marcus: yeah, no, I've been reading their emails about it. I've trying to.

Emily: Trying to kind of cast it in this, you know, cri with some criminality. Yeah. Which is not, not true. No, it's, it's 

Marcus: not, it's not a, not not great language. 

Emily: Is it fair for the taxpayers? No. You know what would Yeah, but they're, 

Marcus: but they're a think tank. I mean, they, they kind of, they, they get a little licensed, but what they're 

Emily: doing is, it's not necessarily illegal or anything else.

What they're doing is they're making the political system defend behaviors that are not ne well, they're, they're opaque. And like I said, it's a bipartisan Right. Used to be bipartisan that you should, you should do this a a little bit differently. So, um, so the, the HMMA article, you were noting that they were not that in these cases, the law is gonna change on a go forward basis.

Right. Alright. 

Marcus: Right 

Emily: now. The one thing to keep in mind is that most of these [01:01:00] supplemental payments, these extra add-ons for Medicaid payments, those are part of section 1115 waivers. Mm-hmm. That Medicaid, yeah. CMS approved, which are 

Marcus: basically gone. 

Emily: So as the state comes in and says, okay, we have to renew our waiver.

Marcus: Mm-hmm. 

Emily: Well, we are going The bar, the 

Marcus: bar, the bar for renewing a waiver is very, very high now. Very high now. Yeah. It's very high now. Yeah. So you'll 

Emily: have to, you'll, we'll have to come up with some of the, so, 

Marcus: so that's what's gonna happen. It's, it's like we're gonna leave it in place, but you do have a checkpoint and we just are gonna parse it out year over year based on your waivers.

And 

Emily: we're guarding the checkpoint. Yeah, yeah. 

Marcus: Based on your waiver expiration dates. Right? Yes. Now, they're not all annual, are they? 

Emily: Uh, no. They're every five years. Ah, yeah, 

Marcus: yeah, yeah. So they'll stagger over the course of the next five years, their expirations. Right. And so there will be sort of a take down.

Emily: Of the over, so the, it's an off ramp. It's an off ramp. Right? 

Marcus: It's an off ramp. Right. Ah, okay. That's, yeah. So that's a clever way to sort of not do it right away 

Emily: because you don't want to Yeah. You're gonna do a lot of damage, but Nope. 

Marcus: No, but you're doing it over five years. 

Emily: You're doing it over five years, [01:02:00] roughly.

That's, it could be longer. 

Marcus: That's clever. Yeah. It's, yeah. I mean, 

Emily: and this by the way, is where, how it used to work. Okay. Because it, this, these two things have never been considered good policy. 

Marcus: Yeah. And, 

Emily: and they're only happening because the, the Biden administration had an attitude of let's just. It wide open.

Take as much money as you want. That was, and you could see it in every single chart I've got. I don't know what the reasons for that were, but you can see it in every single chart. And so what you have to do now is, are, okay guys, we've gotta get off that high wire and get down to some more appropriate reimbursement.

And that's, well, okay. 

Marcus: I mean, Biden administration came along during COVID hospitals were screwy then. I mean, so 

Emily: there, that was some of it that, that it was, it was. It 

Marcus: was at least some of it. 

Emily: 2024 is a big year. 

Marcus: Uh, election year. 

Emily: Yes, exactly. Election year. Jobs, jobs, 

Marcus: jobs, boosting, boosting the economy. 

Emily: Okay.

Those are good [01:03:00] reasons. 

Marcus: Yeah. They're they're political reasons. Yeah. But, but they, you know, I mean, a lot of the things that Biden was doing that year were kind of economy boosting GDP numbers, kind of like everything is looking really good. Yeah. Right. Yeah. Um, you know, 

Emily: and that's the economy's big problem, is it is very much levered to lever healthcare and government workers.

Yeah. Yeah. Um, and you have to, Scott Bein says the Secretary of Treasury, we're gonna privatize that system, Uhhuh. And, uh, and this is, this is how you would do it. Will the Senate be more aggressive than the house? We'll see. Um, I mean, there's some things they could do, um, and, uh, to make the, the supplemental payments and the state directed payments, um, get burn off faster.

Um. I don't think they're gonna do that. I don't think they're 

Marcus: gonna do that. I think they're focused. I don't, I don't Focused on the 

Emily: fmap. 

Marcus: Yeah. I don't know why the, why that would, 

Emily: uh, yeah. I don't, I don't be focused. Yeah. I don't think, and, and you know, when you go back to the demographics, this is a problem that's gonna have to take care of itself anyway.

Marcus: Yeah. 

Emily: Um, you're [01:04:00] not gonna have the Medicare populations. 

Marcus: It's a much clearer thing. And also politically probably positive for them because it does, uh, uh, have a disproportionate impact on blue states. Right. Yeah. Right. I mean, it, it, you can, you can mostly divide the map of Medicaid expansion, blue and red, right?

Emily: Y well, you, I mean, mostly, yeah. Mostly. Mostly. Yeah. But yeah, I mean, you have nine states that have not expanded. You know, you have a state of Virginia, you know, expanded. Um, and, uh, and, and so it's, it's, it's not as clear cut as it was. It's not, it's not that clean in, in 2014. Why? Because if you can expand and get the government to pick up 77% Yeah.

Well, why wouldn't you do that? Yeah. Uh, and, and the answer is you wouldn't do that because it's gonna cost you further on down the road. Right. Which some governors have made that point. Right. In certainly in Tennessee and Right. And Texas. Yeah. So 

Marcus: I, I think you're right. I, I think, I think the FMAP is, uh, I think that's is a much safer place for senate to [01:05:00] focus politically.

Yeah. 

Emily: Right. Yeah. And the, the work requirements, they'll pick those up and uh, and you know how I. How much work requirements actually affect enrollment? Mm-hmm. Is a really open question. Um, how are they gonna, it, it's how are they gonna, it used to be a, like, test that Okay. It used to be really hard, but with the, uh, uh, dis-enrollment, a lot of, um, processes were put in place.

Mm-hmm. Mm-hmm. And, and a lot of, for example, if the computer systems can confirm that you are enrolled in SNAP benefits. Mm. 

Marcus: Okay. 

Emily: Done. You're, you're qualified. Mm. Okay. Okay. Um, if it can read your, you know, tax return Okay. And it could see and verify your income done. Okay. Okay. If you are in the W2 10 99 system, you know it can, it can see you.

Okay. All right. If you are working outside of the 10 99 W2 system and you're in the cash economy mm-hmm. Which [01:06:00] back to undocumented individual, it's a little tougher. It's a little tougher. Right. So it kills two birds with one stone. Well, well, 

Marcus: I, I just viewed. Uh, not entirely, but I certainly could because I think it's, it's, I think it's got a, it's got dual ideological ties.

One is to the, the importance of individual responsibility. Right. And the second is to, um, undocumented. 

Emily: Yeah. Well, and if you go back to the birth of healthcare in America mm-hmm. So Lyndon Johnson is responsible for, uh, the Medicaid program. 

Marcus: Yeah. 

Emily: Uh, nobody ever would have thought about providing health insurance to people who don't work.

Uh, you know, they, they, the state's there to help. 

Marcus: Yeah. 

Emily: The, you know, the, uh, the very poor, the very sick, blind, you know, disabled. Right, right. There was nothing, there's nothing in the debate at that time, right. In the sixties where 

Marcus: for the able bodied, unemployed for an able 

Emily: bodied, yeah. It was like, because at the time, you know, people had insurance through their employers.

Mm-hmm. You know? Mm-hmm. Mm-hmm. The problem that exists is so many people are self-employed and the individual market, but, but [01:07:00] also broken, but also broken. 

Marcus: Back then, it was probably less of the default idea that you're sick. Like it was probably less of an individual hazard to not have coverage. Right. I mean, because food was better, the environment was safer.

Yeah. Like it was like kind of other other things. 

Emily: Yeah, exactly. Yeah. And when in, in 1965, you know, there was, in, in the seventies, for example, breast cancer was destigmatized. All right? There was this point in time where people didn't talk about women having breast cancer because they were sick. You didn't talk about, I mean, look at Franklin Roosevelt, right?

Yeah. How there's like one picture of the guy in a wheelchair. 

Marcus: Right? Okay. 

Emily: Right, right, right. Because you, you don't wanna project stigma. You didn't want weakness. Yeah. The weakness. So the, now they compare 

Marcus: that to Greg Abbott, right? 

Emily: Yeah. Compare that to Greg Abbott. Exactly. Right. So you, you had this change, this cultural mm-hmm.

Shift. 

Marcus: Mm-hmm. 

Emily: Mm-hmm. And, uh, and so, and that's back to make America healthy again. That's kind of what, what, uh, what they're trying to do. And the work requirements fit fairly nicely into that. Okay. And, and, and I think what you're gonna see is people are, who are in the cash economy. Uh, we'll [01:08:00] come out of Medicaid, um, if they can't find a way into the W2 10 99, you know, uh, system.

Marcus: Okay. Um, ha. Have, have we covered the big beautiful bill from the healthcare perspective? Like have we really kind of run down the big, the big issues? 

Emily: Yeah, I think so because you know, what it's trying to do is save, uh, the, the direction yes, if you will, was. Cut $800 million. Yes. Um, I'm sorry, 800 billion.

Billion 

Marcus: billion. 

Emily: Uh, and that, but, but over 

Marcus: over how many years? Over 

Emily: 10 years. 10 years. Right. Okay. Okay. And the, the assignment was to the Energy and Commerce, uh, committee. Energy and Commerce Committee has, um, has authority over the, uh, Medicaid program. Okay. So basically what those instructions were saying is cut $800 billion outta Medicaid.

Marcus: Sure. 

Emily: Uh, so there really isn't a lot of other stuff. I will say the SNAP benefits, um, uh, supplemental nutrition assistance program, uh, that will be, uh, eliminating, uh, junk food, uh, yeah. Yeah. Particularly soda. So does, yeah. [01:09:00] Uh, and the, the beverage industry is running what has to be one of the lamest campaigns I've ever seen, which is 

Marcus: Yeah.

I mean, they're not, they're not gonna win that one. No, no. They're not gonna win that one. 

Emily: Like, you shouldn't be eating that crap anyway. You're 

Marcus: not gonna win. I mean, it's called supplemental nutrition. Yeah. Like, it's, it's just. You're, you're not gonna win that one. You're not gonna win that one. Well, their 

Emily: campaign is your, your cart, your choice.

And I'm like, that is a loose person. That's not, that's 

Marcus: not, that's, that's dead on arrival, buddy. Loose. That is dead on arrival. Okay. Alright. Uh, so the, the final one was deregulation. Deregulation, 

Emily: yeah. Which, 

Marcus: you know, I. I, I understand the context of it. Uh, so are, are there any charts for deregulation? Uh, there's 

Emily: really no charts for Yeah, because, because 

Marcus: it's, it's not well formed yet.

Right. It's not 

Emily: really well formed, but I'll point out a couple of things. Okay. Okay. 

Marcus: Um, and of, I just want to make the point, you, of course, we're not talking about deregulation of things like agriculture. 

Emily: No, just because, because we need more there. Yeah. We need, we need to see more information. But what we know about healthcare right now is the deregulation is to, for the first part of it, is, uh, we are gonna eliminate [01:10:00] quality metrics, uh, that we don't think are valuable.

Mm-hmm. And the first thing, for example, COVID vaccines, if you are a healthcare provider, you're, you get scored on the number of people who are up to date on their COVID vaccine. Mm. Okay. Um, this is a easy one to do because it, it implicates the ability of the workforce. People left the workforce because of it.

Uh, so we we're gonna take that out of your quality mix. Metrics right now, because we know how people feel about it. Okay. 

Marcus: And, and also COVID iss not a problem. So I, I I think that's kind of a nice benign, easy one to removed. Right. But there're also, 

Emily: there are also things like eliminating, um, metrics on health equity.

Okay. 

Marcus: Well we know that's coming. Yeah. You knew that was coming. We, we knew that's coming. We 

Emily: also, um, know that they have eliminated quality metrics on social determinants of health and things like that. Yep. We know that. We know 

Marcus: that's coming as well. 

Emily: S but what we don't know is they've asked for more information.

They, the CMS has said, all right, give us some other ideas. What, what are, what's in hurting your ability to be, uh, efficient and successful and to treat [01:11:00] patients the way we want? We don't know what those things are gonna be. Mm-hmm. And if you just look at the history, so we, this, this first set of rules that were issued asking for some deregulation ideas, those were mostly written in the Biden administration.

Mm-hmm. All. And then they're released this spring. Mm-hmm. So they're all formed up. Yep. Then they added their little sprinkle. Yep. Okay. Yep. 

Marcus: Yep. 

Emily: The next set of rules, which will be possibly this summer, alright. For calendar year 2026. Okay. Or. We wait until the spring and summer of 2026 to see what they, what they wanna do.

Um, those are going to dive even deeper into the regulatory changes. Okay. So that's when you're gonna see really where are 

Marcus: they gonna go beyond quality stuff? Like, are we gonna get into Oh yeah. I think 

Emily: it's gonna go well beyond quality stuff. Um, I think it's gonna, anything that is, 

Marcus: we're, we're not, we're not directionally talking about safety deregulation, right?

Emily: No, no, no. And Okay. Which is, you know, a lot, largely a state, uh, uh, a state survey. Yeah. Question. [01:12:00] Although. The CMS has some role? No, it's gonna be, I think the first things on the agenda are reporting that doesn't produce, you know, results. Because what happens is the system is incremental. You know, somebody comes up with this great idea Yep.

We want this piece, piece of information. Yep, yep. And it lasts for a few decades. Yeah, yeah, yeah. You know? Yeah, yeah, yeah. Um, so there's are the kinds of things that Got it. 

Marcus: So, so process and reporting, everything's gonna be looked at from a, from a perspective of, but that, that's, that's a, you know, that's a, that's a much larger trend happening right now, you know?

Yeah. Across all industries. Right. I mean, so, well the Trump, 

Emily: Trump administration's attitude was in the first Trump administration and, and this one too, is you all are qualified professionals. Mm-hmm. Mm-hmm. They operate hospitals mm-hmm. And nursing homes mm-hmm. And so forth. We expect you to. Operate like qualified professionals.

Mm-hmm. Mm-hmm. Uh, we're so we're not gonna get all up in your business, you know? Yeah. And, and 

Marcus: I mean, you're really talking about bureaucracy, right? Y Yes. You know, creating people that need to check the reports because of the, because the report exists, right? Not, not, not, not [01:13:00] because it actually makes the industry any better, right.

And every industry that's highly regulated and, and has to be highly available because of whatever critical things has this stuff. And nobody does it like healthcare. Yeah. It's, it's, nobody does like healthcare. Yep. Okay. So, so that's, that's one big thing. The thing I was looking for you to talk about that was, uh, just starting to make progress in Trump won, and then COVID hit is competition.

That's why I, that's why I, that's, that's where I thought you might be going, but, but, but you're not. Okay. So you're not talking about competition. 

Emily: So what I did not see in this spring set of rules, maybe I see it this summer, 

Marcus: okay. 

Emily: Um, is things like, um, eliminating the, uh, outpatient. Only list. I mean, the inpatient only list, right.

That's a list of services. Yep. That Medicare says you gotta do these inpatient. Yep. And by the way, it was only created in 2000. It's not even that old, you know? Oh, that's interesting. That's interesting. Yeah. And it was, it's protectionism. Right? Of course. 

Marcus: Of, of course, of course. The 

Emily: other part of that is the ambulatory surgery centers.

[01:14:00] There's a list of covered procedures that you could perform. An ambulatory, I expect those to go away, and I don't think they're gonna be as nice as they were in, uh, in Trump one, uh, where they say, okay, we'll phase this in over a period of time. I think they're just gonna pull the rip cord. Okay. Uh, and you all, y'all knew it was coming.

I mean, we talked about it. You, it got reversed by the Biden administration, so if you didn't figure this out, well, you probably shouldn't be running a hospital. Uh, so, so that, I expect that, um, price transparency, I'm gonna continue, we're gonna continue to see that. Mm-hmm. Uh, ramp, um, the compliance is difficult.

Um, the private market solutions haven't really emerged. Um, the, uh, and it's, it's difficult, you know, because a lot of these hospitals, they don't even know, you know, it, it, it's like somebody checks a box and it goes to billing and somebody hand codes it and, you know, it, it's, it's, it's a bit of a mess, but I expect more, uh, more guidance on that as well.

Marcus: So in, in the, in the cycle of government and policy [01:15:00] making, um, when could we expect those types of things to happen? Like, can they happen this year based on agendas and schedules and. And roadmaps or, or are they, are those things, is deregulation really gonna be a 2026 concern? 

Emily: I, I, I'm gonna group it into 2026.

Okay. More likely. Okay. Um, and for two reasons. The first is just the rhythm of the system. 

Marcus: Yeah. 

Emily: Um, the second is the make America healthy again. Uh, it, that policy needed to be published, which it has, and now everybody needs to follow through with that in rulemaking. And what is happening, I'm sure at HHS is Robert F.

Kennedy says, okay, here, here's the framework. All right. Let's make sure that all the rules that, uh, that we publish conform with those things. And if they don't conform. Then, you know, we need to, we need to talk about how we're gonna change the policy. That, that's what I'm expecting. Okay. Uh, and if you [01:16:00] look at Trump one, which got started late in the whole healthcare, um, system, but if you look at Trump one, you know, they really hit their stride late 2018, um, and early 2019.

Uh, and I would expect that to happen sooner because we are prepared or they are prepared. Um, so 2026, uh, maybe 2025 on some things, but, but the system is, is kind of points to 2026. Okay. 

Marcus: I think we ran through. Uh, I 

Emily: think that's it. 

Marcus: Awesome. Okay. I feel clear now. Okay, good. I'm good, I'm good. Uh, I think I understand.

Where we are on the bill. Okay. So, uh, deadlines for, for, uh, getting the bill done. 

Emily: Uh, so I expect that the one big, beautiful bill is supposed to, the talk right now is that it will, um, it will pass after the June recess. Okay. So [01:17:00] that's, I think the first two weeks of June is recess, so before July 4th Okay.

Is, is, seems like a Okay. Hard date. And if July 4th doesn't happen, it'll be before the August recess, so, okay. So you should see, you should see something happen here, uh, this summer. Okay. 

Marcus: Uh, and then, and then the rollout. Of the implications for, from that bill, you know, for, for states, for federal matching.

When, when does that all, so 

Emily: the, the work requirement in the, in the statute from the house, or the bill from the house says that, uh, the work requirement, uh, rule rules, the guidance from CMS needs to be done by the end of this year. All right? Mm-hmm. So you'll be able to see that, you know, uh, fairly quickly.

Okay. We'll have to see what they do on the, the fmap. Okay. And, and some other things, but, um, but, 

Marcus: and, and, and how do you anticipate that broadly impacting, um, managed care organizations? The 

Emily: work, the work requirement? Mm-hmm. Piece of it. Mm-hmm. Mm-hmm. I expect you're gonna see in California, my estimate is you lose about 2 million people, um, who are, uh, [01:18:00] who are, shouldn't be on, uh, on the, on the, on the roles because they are undocumented, which means there's no.

We can't match a W2 or 10 99, they're in the cash economy. Mm-hmm. Mm-hmm. Uh, is, is way, it is. Uh, and I, I'd say nationwide is probably about 4 million people would come off, off the rolls. Um, there are, last I looked about 72 million people enrolled, not counting chip. So it's not a huge, uh, difference. Um, but you know, if fmap changes it's 5%.

It is 5%. But it, that's, 

Marcus: that's, you know, not, it's not nothing. It's not nothing. But that's not nothing. 

Emily: Um, and it, and for a, a managed care organization like Centene, which is heavily leveraged to California, it could be, it could be, uh, impactful. Yeah. Uh, 

Marcus: yeah. 

Emily: And, and then if the FMAP changes, uh, we could see even more, you know, people come off the, off the rules as well.

Okay. Uh, you know, the estimates, um. My estimates range, you know, fairly broadly. The one [01:19:00] that most of the health policy people are saying is it's, you know, 20 million people, you know, we'll cut, we'll lose their insurance. Well, which is not the right way to phrase it, because if you're in Medicaid, alright, uh, and you are kicked off of Medicaid, you have several options.

One of those is your employer. A lot of people who are employed and have available to them. That's interesting. Employer sponsored insurance. Yeah. Uh, but they enroll in Medicaid. Why? Because it's free. Yeah. Because they meet the income requirement. They meet the, they 

Marcus: meet the requirements. Yeah. That's, and 

Emily: um, and so the, uh, the other part of it of course is, um, uh, of the, you know, the, the a CA offers, uh, insurance as well.

Marcus: Mm-hmm. Yeah. So, so the Yeah. But those will, those will. Those will eat into their, their households and, and they're already pretty, 

Emily: pretty thing could Well, if you're in that low income, yeah, alright. You're, you're probably gonna get sub heavily subsidized, so it should, but not, 

Marcus: but not a hundred percent subsidized.

I guess it's just my point. It's 

Emily: very close to a hundred percent in, and when you're at that low income levels mm-hmm, 

Marcus: mm-hmm. 

Emily: Uh, assuming you're, you know, documenting it, telling the [01:20:00] truth, those, those are very few, very big subsidies. Very big subsidies 

Marcus: From, from who, who, who, 

Emily: uh, it's the tax credits. Yeah.

So you get these tax credits Yeah. You get from the federal government. Okay. You, um, and there are all kinds of crazy incentives in there too. Okay. So, but, but people can move in that, and we've gone, they, the, the, the fraud people at the ga uh, the government Accountability office and also at the, um, office of the Inspector General, you know, say they're.

There's probably a million people who are enrolled in a CA and Medicaid. 

Marcus: Hmm. 

Emily: You know, why did that happen? Who knows? There are lots of people who enrolled in several states in Medicaid, you know, there, they're all, there's all kinds of lack of structure there. 

Marcus: Sure. 

Emily: That when you, when you just go, oh, 20 million people are gonna lose insurance and they're gonna be uninsured.

That that fails to account for number one, the craziness of the system. Yeah. It's comp 

Marcus: it's complicated. I, I understand that. And also it 

Emily: fails to acknowledge the options that, you know, 30 [01:21:00] years ago weren't there. 

Marcus: No. Yeah. 

Emily: And that, and now are 

Marcus: No, that's fair. That's fair. Uh, I mean, I, I, I just assume we won't know, and I, I don't think it's anything to, to sort of get, uh, too riled up about until it all takes place and then you see how it all washes out.

Um, but I, I was more wondering what the, what the actual sort of impact to, to managed care broadly is. And and you think it's gonna be not, it's not gonna be broad. It's gonna be because, you know, healthcare is market to market. It's gonna be focused in the areas where there's gonna be significant dis-enrollment, which is gonna be the areas where it's 

Emily: big blue stage.

Big, big blue 

Marcus: states. Yeah, yeah, yeah, 

Emily: yeah. That's where you're gonna see most of the impact. Yeah. 

Marcus: Yeah. Which is, which is even in those states, likely to be o over indexed to a few companies. Yes. Right? Yes. Right. To a few companies it sort of specialize into in that population. Yes. Right? Yes, that's right.

Yeah. Okay. Alright. That makes, that makes sense. Uh, what about providers? Same, same also geographically, kind of like, uh, 

Emily: you know, I'm not su I'm not super worried about the providers and for this reason is that, you know, the, when you're talking about the expansion population, just for example, [01:22:00] yeah, because the, the undocumented population, um, they were, they're working in the cash economy.

Alright. Um, and let's say they come off of Medicaid, they lose their coverage, you know, for that, just using this one example, you know, that's a population where the insurance is, uh, where their healthcare needs are episodic, uh, and often not particularly severe. Okay. Uh, a, a, a coverage for a pregnant woman.

That's something that, you know, it, the states are gonna have to deal with that, but if you're talking about. An able-bodied individual, you know, who's working in the cash economy, who gets, you know, kicked off of Medicaid program, chances are that their needs, their healthcare needs are not that great. Um, and, and so there is a, that when we say 20 million people are gonna lose health insurance or 4 million or whatever, you know, there's, there's things about that number we don't know.

Marcus: Mm-hmm. 

Emily: You know, are, is the average age 35? Well, you probably don't have much to worry about, you know? Yeah. Um, is the average, is [01:23:00] it, is it all pregnant women? Well, that's a different story. Yeah. And so we have to think about, you know, that what, 

Marcus: what about increased usage of. Of, I mean, you know, incentives.

What about increased usage of, of ERs as, as sort of a negative should care 

Emily: just actually centers, but, um, could be, uh, 

Marcus: e ERs. I, I think for that population though, are a little bit more sort of, yeah, 

Emily: we could see more er use, we could see more uncompensated care. That's, that, that's what, that's what 

Marcus: I'm talking about.

That's what I'm talking about. 

Emily: You know, I, I just am hesitant to put big numbers on it because I don't think you can put any 

Marcus: numbers on it until it all plays out. Yeah, right. I just don't think that that makes a lot of sense. Uh, it's, it's too complicated. We gotta see how are the states gonna respond? You know?

There's a lot to sort of wash out. 

Emily: Yeah. Here we, we don't know. I, I just think taking that 20 million people are gonna lose, uh, in insurance and 10 million of them are gonna die or whatever the kind of, you know, do and bloom, uh, comes out of the health policy. First of all, people do everything they can not to die.[01:24:00] 

And so, and so you and losing health insurance is probably really far down the list of preventive things that they're doing. Yeah. Um, so, so we, we just, we just need to see how the, the system responds. Yeah. I don't have, I don't, I, I'm just not that negative on it. Okay. 

Marcus: Uh, thank you. 

Emily: You're welcome. Thanks for having me.

Appreciate. 

Marcus: Yeah, no, super helpful. And, uh, we'll, uh, we'll bring you back next quarter. 

Emily: Alright, great.