Health:Further

Show Notes

In this milestone episode, recorded the day after a significant election, Vic and Marcus delve into the outcomes and implications of the presidential and Senate races, discussing the impact on markets, including the Russell 2000’s response and big tech and cryptocurrency reactions. They explore anticipated shifts in venture capital, the role of influencers like RFK Jr. in healthcare, deregulation's effects on small businesses, and possible Medicare and Medicaid adjustments under the incoming administration. The conversation also touches on the growing influence of media personalities versus traditional outlets and the role of unions and regulatory bodies in shaping future business landscapes. The hosts conclude by reflecting on trends from previous episodes and expectations for the economy and healthcare policy under new political leadership.

Links:

2:54 - Election 2024 resultsGoogle

4:11 - The Winners and Losers From the ‘Trump Trade’ Gripping Markets WSJ

9:53 - Fed Prepares Rate Cut Amid Economic Contradictions WSJ

10:25 - Trump Will Create New Winners and Losers in Healthcare WSJ

17:23 - Insurers prep for Trump admin friendly to Medicare Advantage and mergers, hostile to Medicaid and ACA Fierce Healthcare

17:27 - CVS holds back guidance as it outlines plan to right the ship at Aetna Fierce Healthcare

18:31 - RFK Jr. talks health care agenda following Trump win: NBC

32:14 - Elevance Health says star ratings snub cost insurer $375M Fierce Healthcare

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What is Health:Further?

Every week, healthcare VCs and Jumpstart Health Investors co-founders Vic Gatto and Marcus Whitney review and unpack the happenings in US Healthcare, finance, technology and policy. With a firm belief that our healthcare system is doomed without entrepreneurship, they work through the mud to find the jewels, highlight headwinds and tailwinds, and bring on the smartest guests to fill in the gaps.

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.

Episode 100.

Yes, we made it.

Yeah, and uh, what an auspicious episode 100 we have.

Yeah, we did not plan for episode 100 to be recorded the day after election day.

We're recording this on Wednesday, November 7th, and, uh, the whole world knows that the results are in at least for the presidential and the Senate.

I think they're still thrashing around on the house.

Um, and so by the time you listen to this baby, or maybe not, that will have been figured out, but, uh, there's, there's no question in terms of the both popular and electoral college votes for president.

Um, Donald Trump is the president elect and, um, I think it's, you know, from a, from the perspective of everyone worried about civil war, the victory was so decisive.

I don't think there's any concern about that any, anytime soon.

I think that's right.

I mean, I, I think I was pretty shocked.

I think everyone was pretty surprised at how big Trump's win was.

Yeah.

Uh, but the silver lining in that is that he won the popular vote.

He won the electoral college.

He won everything without I mean, even if there was some some election somewhere that had a question or a few ballots.

It doesn't matter, right?

Yeah, I mean, I think so many people were worried, you know, this thing is no way it's going to be done in 24 hours It's going to drag on for weeks.

Like that was kind of the that was the default narrative, right?

And, um, we don't have that, right?

We have, we have clarity on what's going to happen.

So, um, I think that is, that is a good thing.

And, you know, look, we're going to spend a very short amount of time running through a couple of stories.

And then I, I want to spend our episode 100 kind of looking back over the last 99 episodes that we've, that we've done in the healthcare world we knew and the venture capital world we knew.

There were enough.

Twist and turns in that yeah, you know over the last year and a half that we've been doing the show and Holy cow, it feels like we are in for a wild rollercoaster ride

Yes, the next the next six months.

I think you're gonna be pretty wild a lot of change It's unclear what, we have lots of opinions, but none of them are validated because it's only 24 hours in.

Agreed.

A lot of change.

Agreed.

Uh, but I think, I do think some things are definitive.

Oh yeah.

And I think those things that are definitive will both be attributed to the election results, as well as things we can kind of start to bank on now.

Right.

Yeah.

I think that's right.

So we'll, we'll hash all that out.

So with no further ado, episode 100, let's dig in.

Uh, all right.

So let's start with the actual results, Vic.

Yeah.

So I think probably most people know Trump won.

I mean, right now there's a couple states still outstanding, but 295 electoral college votes are in his camp.

He needs to 70 to win.

So obviously it's finished.

He might get to 306.

Either way, he won by a lot.

Yeah, yeah.

Decisive win.

Um, the Senate.

The Senate is, I think, pretty clearly between 52 Republicans, it could get up to 54.

But there are two, uh, pretty moderate Republicans from Maine and Alaska.

You know, if they only have 52, they're going to, they're going to have, um, kind of like a Joe Manchin in, in a reverse where you're going to have to go through these moderate Republicans for, to get anything done.

If they're able to get to 53 or 54, they'll have a little more leverage.

Yeah.

All right.

So let's, let's hopped over to the markets.

Um, I, I, I think the first thing I looked at when I woke up this morning was the markets.

I didn't look at the actual count results.

I knew, I knew Trump won, so I was like, I the numbers on that.

But I wanted to see how is the market responding.

Um, and really interesting.

All the markets were up, but the Russell 2000 index, uh, was up 8%?

Yeah.

On the day?

Yeah, it's 8 percent today.

So on the day, the day, right, exactly, which is a very surprising to me.

I mean, I think, um, I think it's a view that the markets have that I share that.

There's going to be a lot of benefits to U.

based companies and the Russell has been pretty beaten up.

It hasn't, it hasn't gotten all the, uh, kind of growth this year that, that the S& P 500 or NASDAQ has gotten.

And so I think there'll be, it'll be some benefits to all companies that are for profit in the U.

But I think it was sort of a catch up, like, well, you know, rising tide's going to lift all these boats and the Russell's a little behind.

I, I, I feel that this is.

A lot of vindication for what we've been talking about for many, many episodes now, which is we're in the early stage venture capital stack.

The companies we're investing in are smaller companies.

You know, if one day they get to an exit, it's likely they're either going to be in a rollup or a small cap company.

Right.

Much more likely they'd be in the Russell than the S& P.

Yeah.

Right.

Um, and I think Our market segment has really been depressed for a long time.

Yeah.

Um, and, and it's because the, there's been so much consolidation at the top of the stack because we can't have M and a activity happening.

Right.

So when you, when we don't have M and a activity happening, it's actually the smaller companies that.

that struggle and suffer.

There's no liquidity.

There's no exits.

There's no, you know, turnovers.

There's no return of capital.

Um, and few and everyone else can just buy the mag seven on the public market.

So it's like, why would you even play with the private markets?

There's no, there's no alpha there, right?

There's no upside to doing it.

Yeah.

I think that's right.

There's a lot of cash sitting on the sidelines that would like to do MNA.

I think there'll be I mean, one of the predictions that's not very controversial is there's going to be a lot of M& A activity in the next year, the sort of pent up.

There's boards that, you know, have ideas about corporate development, but they haven't wanted to fight the regulation of the FTC and DOJ.

Um, so yeah, I think it'll benefit small cap, it's going to benefit our portfolio.

It's going to benefit the, you know, the, the.

Business environment broadly.

And the other thing that I think is pretty different in the Russell or our portfolio as compared to the large cap is you're, you're subject to regulation.

You don't have ability to capture regulators.

You're not lobbying.

You don't, you don't have the girth.

Yeah.

Maybe some small businesses can group together.

But it's not like Apple or Google or Amazon lobbying for something.

And so cutting regulation, I think, uh, really helps the smaller companies and the venture backed companies.

Yeah,

yeah.

I mean, I think it's interesting that the response from the street was Buy up Russell.

Yeah.

Right.

Like that's the opportunity you want to front and run.

And that quite frankly, the S and P and the Dow kind of had the Trump win priced in.

Yeah.

Right.

And whereas the Russell didn't have it priced in.

Yeah.

So I think that's really interesting.

Uh, and then this article in the wall street journal that, you know, they, they cover yields and, and ETS, but they do talk about winners and losers.

Um, big tech and crypto Tesla stock, uh, you know, went shot through the roof.

Yeah, today.

Nvidia did very, very well as well.

Um, crypto, uh, I mean, Bitcoin is all time high, all time high.

Yeah.

And, and the fast follower to Bitcoin right now is Solana and it had like 20 percent jumps right on the day, day over day.

Yeah.

20%, which is pretty crazy.

Pretty crazy.

Yeah.

I mean, I think a Trump win in this manner is somewhat a risk on it's a clear

signal that we're risk on.

Right.

We're, it's definitely, uh, a very economic oriented vote, right?

Like, like that is the core issue.

And so I think that's why the markets is the place to look to see what the, you know, what, what the response is.

Uh, conversely, there's a, there's a clear view that.

tariffs are coming.

Yeah.

And so if you're a tariff exposed company, those, those shares dropped.

And so think, you know, Best Buy, Williams, Sonoma, Nike, Target, all those stocks took a pretty big hit.

Yeah.

Yeah, that's right.

I think, um, I mean, this was, I think it was an economic election in my view.

Part of the attraction to Trump is If you're not happy with the economic environment today, I just want something different.

And whether I agree with everything Trump says or not, probably no one agrees with everything he says.

Right.

I'm, I'm falling behind, especially the lower part of the K, you know, the lower income, less, less educated.

Yeah.

they are suffering.

And so I think the financial market is reading what I think is going to happen, which is there'll be stimulus tax cuts, the Fed stimulus, there'll be regulation cuts, and hopefully it will get to the general population, but it's going to go through financial assets as a first stop because that's what always happens.

Yeah, yeah, no, I, I think that's, I think that's right.

Uh, the Fed prepares a rate cut amid economic contradictions.

Yeah.

So it's a, you know, previously scheduled Fed meeting tomorrow.

It is, uh, highly anticipated.

They will do a 25 basis cut.

I do not expect, um, Chairman Powell to change his direction based on something like an election.

I think he.

He wants to say he's data driven, and I expect he'll do a 25 bit work cut.

Yep.

I agree with that.

We are seeing, uh, articles starting to explore what a Trump administration will bring to healthcare.

Um, I think we, we have to see whether or not this is going to be a sweep or not.

If this is a sweep, it's going to be a very, very different story than even what this story is focused on.

This is just really focused on the, the regulatory agencies, um, not sort of the, you know, You know, the full stack of what could happen.

Yeah, this is based on what

could the president do without Congress.

That's right.

You know, there is a, I don't know, 50 50 or even 60 40 chance that the ruling will get the house.

Yeah.

So, so, uh, I mean, right now people are scrambling a little bit and, and, you know, Trying to read tea leaves because trump has not been uh, abundantly clear about his views on health care Uh, you know, maybe they're trying to pull his playbooks off the shelf from from his uh, 2016 uh run But it seems like the the payers did pretty well in the markets Um with a view that the deregulation will actually kind of reverse course for medicare advantage Um, because it's more You You know, pushing risk capitated and it's more

market based.

It is market based kind of approach, which I.

I think Trump is on record of saying he prefers.

Yeah.

So that, that's a, that's a win for, for insurers.

Uh, just given what's happened over the last 12 months.

Yeah.

Right.

Yeah.

One of the rebound,

if anything.

Right.

One of the things that, um, this article does that I, I'm not ready to do is to take the, some of the programs 2025 Republican document and, Project that Trump will do those things he I think he might do some of those things, but I don't think it's going to be that one to one.

I think there's been so much noise and things around that it's going to it's going to emerge.

I think a little differently.

I agree.

And I think I think that the, um, the swiftness of the win To me shows the strength of trump, right?

And not necessarily the strength of the heritage foundation or any of these other groups, right?

And so I don't believe he's beholden to any Plans or agreements or any of those kinds of things i'm not saying they're off the table But i'm saying he's sufficiently strong to do whatever it is.

He wants to do, right?

Yes, if he decides he wants to execute that plan, then that's fine So, um Um, but it's not clear to me that that's actually what he is going to do.

Yeah, and, and I don't have, um, inside knowledge more than anyone else, but I have been reading a bunch about it.

I think he is, he's learned a lot from 2016 and is really trying to.

Build his team ahead of time in a much more, um, kind of buttoned up, uh, understand the, the, all the bureaucracy that you're going to have to work with.

As opposed to 2016, it maybe just came in, not that he was unprepared, but it was a much more rushed, put something together.

I mean,

At the end, based on how many people came and went through, through that, through, through that term, I mean, it was kind of the B team, right?

It really wasn't put together that well.

I think if you're looking in on the front end of, of this run and what this term is shaping up to be, It's a lot more like the a team, uh, you know, the people that he's got around him, just pure talent, proof of execution, um, and proof of ability to, to, to lead full, you know, full organizations on their own, multiple organizations in some cases, uh, it's, it's just stronger from a talent perspective.

So, um,

yeah, I think that's right.

But he also has eight years or whatever, several, a lot of years where he now knows.

people in these circles more.

Yeah.

So he, he knows who he trusts and who he wants to work with, with a much stronger conviction, I think, than previously.

Yeah.

So this, this article, um, assumes that Medicaid is, is going to get, Uh, you know, knock back a peg.

That's not entirely clear to me.

I don't see why Medicaid would not move in a very similar direction to Medicare from a Medicare Advantage view, why it would not just become more sort of market based and, you know, more, hey, let's, let's capitate and let's, let's bring in innovation and bring in new players.

So I don't know.

I mean,

yeah.

I mean, I think we're already seeing a trend.

least in private markets for carving out particular disease states or types of population or geographies in Medicaid, accepting risks for a particular population and then having to deliver.

Yeah.

And I do not think it makes sense in any world to cut back Medicaid, which is, you know, for the poor and the children.

I mean, I just don't think that's no politician is going to that's a hard thing to cut.

I don't I don't see how that Now, reorganized, brought to more market based things, maybe fewer bureaucracies, fewer people in the bureaucracy, maybe try to save some money on how it's managed, any of those things, but I don't think they're going to really cut it.

cut back on the spend on the benefits.

Yeah.

Conversely, if you have a sweep, um, especially after the failure to do so in his first term, uh, the ACA could, could be really impacted.

Yeah.

Well, certainly the expansion side of the expansion states, I think, uh, many of the reasons that some states didn't expand is they're worried about the federal subsidy.

ending at some point.

Yeah, but I think that's, that's could happen.

I mean, I think also some of the penalties, right, that, that show up in the tax code as far as like the requirements to have coverage.

I think those things could also be impacted because I, you know, I'm not, it's not entirely clear to me that those things are, um, The most celebrated aspects of the AC, right, you know, having a marketplace is one thing, having a being forced to purchase something on that marketplace, which then creates an incentive for the prices to be higher because it's a forced buyer.

Yeah, I think that was a negotiated settlement with the payers.

Like, if you're going to have to allow anyone to come on without any pre, you know, precondition exclusions, then everyone's got to have insurance all the time.

Otherwise, I'll just wait until.

Until something happens, and then I'll sign up then.

Um, but yes, it could, it's all going to be on the table to be looked at, I think.

Yeah, I think, I think that in particular is going to be on the table.

This article, I think, yeah, similar, uh, so we'll just put it in the show notes.

Uh, CVS, holding back guidance as it outlines plan to write the ship at Aetna.

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