121 - Medicaid Cuts, AI Takeovers, and the Healthcare Power Struggle

Show Notes

Vic and Marcus discuss the latest developments in healthcare, policy, and technology, including major VC deals in medical claims automation and AI-driven medical coding, the rise of federated imaging networks, and the implications of a wearable defibrillator maker planning a $150M IPO. They analyze the House-passed GOP budget and its potential impact on Medicaid, as well as the White House’s push for price transparency in healthcare. The hosts cover Medicare Advantage enrollment trends, a proposed exchange for small businesses, and the privatization of Walgreens. Other topics include the end of the Ozempic shortage, Eli Lilly's $27B investment in U.S. manufacturing, AI advancements, cybersecurity risks, and Meta’s $200B AI data center expansion

Links:

3:12 - Camber gets $30M for medical claims automation Axios

4:32 - Charta Health Secures $8.1 Million After Turning Cold Emails Into Profit in Just 60 Days Aim Research

6:45 - Avandra lands $17.5M to build out federated imaging network

7:09 - Wearable defibrillator maker Kestra Medical plots $150M IPO

8:43 - New ‘Dream Exchange’ Aims to List Black-Owned Companies

11:43 - House Passes G.O.P. Budget Teeing Up Enormous Tax and Spending Cuts

12:42 - House budget plan advances, paving way for major Medicaid cuts

14:48 - Making America Healthy Again by Empowering Patients with Clear, Accurate, and Actionable Healthcare Pricing Information White House

16:08 - Price transparency enforcement gets a boost as Trump signs executive order HFMA

17:34 - BCBSA report: Addressing hospital, pharma costs could save $1T over next decade Fierce Healthcare

19:06 - Trump Team Weighs Pulling Funds for Moderna Bird Flu Vaccine

20:29 - Telehealth advocates turn up the pressure as Medicare deadline nears Axios

23:21 - Trump memo directs federal agencies, HHS to fire more employees and submit agency reorg plans

25:54 - Medicare Advantage growth slows as UnitedHealthcare nabs members, Humana sheds lives Healthcare Dive

28:09 - Walgreens' Breakup: Inside the Private Equity Takeover That Could Reshape the Pharmacy Giant Yahoo

29:17 - Semaglutide shortage ends as FDA sets deadline for compounders Pharmaceutical Technology

31:33 - Eli Lilly Plans to Spend $27 Billion on New U.S. Plants

34:28 - AstraZeneca’s Breast Cancer Drug Shows Positive Results In Late-Stage Trial

35:02 - Why We Don’t Trust Doctors Like We Used To

39:27 - First Measles Death Reported in Texas Outbreak

41:23 - Organ Transplant System ‘in Chaos’ as Waiting Lists Are Ignored

44:21 - Red Light Therapy Gets the Green Light, Sort Of

45:41 - AI Startup Anthropic Fi

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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.

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Thank you.

All right.

How you doing?

I'm good.

Warmed up here a little bit in Nashville.

So I mean, my mood's affected by sun and warmth.

So I've been in, it's been a good week.

Yeah.

I think you and most of us,

man.

Yeah.

The weather's been awesome.

I was walking around yesterday in a t shirt and so happy about that.

Uh, yeah.

And, and it feels like things out of DC are.

Slowing down a little bit.

They're not really taking a U turn.

Um, you know, the.

The general sentiment is still job cuts, budget cuts, um, doge, you know, but not fast and furious with the like executive orders and net new news.

It's starting to slow down a little bit, and maybe they're actually doing the work that they spent the first.

Two to three weeks there.

Yeah.

Talking about, yeah.

Yeah.

I think that's right.

Yeah.

Which is, which is kind of nice on the psyche, quite frankly.

'cause Yeah.

You know, ww whether you're forward, the, I

just whiplash, that's everything is

all

new.

Yeah,

that's exactly right.

Like, it doesn't matter if you're forward or you're against it, it's, it's a tremendous amount of change coming very, very quickly.

Right, right.

So, um, yeah, so I, I don't know, things feel like we're moving in the spring, we're getting out of the.

Yeah, we're back in the studio.

We're back to, yeah, no travel.

Yeah.

Yeah.

It's nice.

It's nice.

And, uh, we're prepping for our, our annual summit in about a month, which is, which is really, uh, going to be exciting and, and, uh, we'll have our LPs from across our funds, um, at that event.

So that'll be great.

Uh,

yeah, we're going to

record a show there too.

Yeah.

Yeah.

Yeah.

Yeah.

We're not going to say listeners.

Our listeners will get to get to at least, uh, Here a little bit for the live audience and everything.

Exactly.

Exactly.

They'll be some great sessions and we're gonna do a show there and we'll have a great guest for that show lined up already.

So, uh, yeah, I don't know.

Nothing else to talk about.

We should just get to it.

Yeah.

All right, let's dig in.

We're skipping the economy this week just because there was nothing Of substance to talk about there were a couple of like articles that were about the sentiment and the vibe, but that's not worth covering.

I think that's right.

It was just a lot of policy, a lot of other activity, but the economy is kind of bumping along.

It's not super great, but it's not terrible.

It's just kind of going along.

I mean,

at the time of this recording right now, it's, you know, the streets are red on, you know, in terms of like all the different markets are down.

The VIX is up, I think 20 percent right now.

Yeah.

So

the

yield curve inverted in a couple.

Different time differences, but not all the way.

It's just kind of like yellow lights.

Yeah.

Yeah And people were talking about that last week the the yen carry trade Being something that we need to watch out for maybe having a repeat of what we had with the nikkei Um, yeah, I think that's for march that exactly.

Yeah, exactly All right.

So let's start with vc there.

There's a fair number of uh, big deals, uh that happened the first one company called camber But previously was called juniper raised 30 million dollars for medical claims automation.

Yeah, and um Uh, Andreessen Horowitz, big VC firm, led the deal.

They're expanding in geography and specialty.

So they're moving, I think they were behavioral health, and now they're moving to home health and long term care, substance abuse, so adjacent to behavioral health, but new markets.

Um, so, good.

I mean, I think a good, good space.

One, one thing that I thought was notable was that Y Combinator joined their series B and I know that Y Com has a later fund, um, but I rarely see their name attached to a series B.

So I just thought that was interesting.

Yeah, especially when they didn't launch the company.

I thought their fund was more for their companies.

Kind of an opportunity fund, right?

Yeah, so that's that's interesting and probably something to take note of and watch for Y Combinator's evolution.

Yeah, maybe beyond just doing their early stage course

and into health care.

I mean, they haven't been a huge health care.

They do a little bit of health care a year, but.

If they get in more into health care, that'll be interesting.

Yeah.

I think AI turns them on about health care, right?

Because all the other labor intensive things, not, not in there, not in their wheelhouse charter health secures 8.

1 million after turning cold emails into profit in just 60 days.

Yeah.

So the two founders built and sold a company, uh, in AI, they sold it to open, open AI.

And then they sort of decided to look into healthcare.

But unlike a lot of Silicon Valley founders that just kind of turn on an AI computer and start doing healthcare things, they actually got, um, you know, credentialed and got trained in medical coding as actually a human coder and went through that process.

It's tight.

Uh, A lot of healthcare professionals, and then they use that experience to, to build a coding fantastic capital

is lucky to be, uh, investing in them, uh, 8.

1 million seed round led by Bain.

And yes, I mean, I think one of the things I've learned over the course of the last five years is how important subject matter expertise is in the founder.

Yeah.

Um, sometimes they.

See an opportunity, but they don't understand intricacies of, um, where the pitfalls really lie.

And the, you know, the fundamental difference is did you work in the space or not actually, you know, and so these guys are really smart and look, I actually think this is a really interesting path cause I, I've, I've heard a different company, uh, that actually came from the middle East and, and has now become stateside and they did the same thing.

I, so when I first heard the story, I thought it was them and I looked at the Congress and I'm like, no, no, no, this is not the same company.

Um, but.

You know, this idea of going and working in health care.

Here's the thing.

It's not that hard to get certified to become part of the health care workforce.

And then you do it for a year, and now you're a subject matter expert.

I mean, it doesn't take that long.

And you see all of the, let's call them friction points.

But you know them in a much more, like, uh, visceral way than just, like, looking at a website.

Exactly.

And probably after, like, your first four to five months of, you know, training, getting your certification and starting a job, You probably can start the side hustle in like five months, you know, and be coding at night while you're working during the day or whatever.

So it's, it's a really smart model here.

And again, congrats to Bain for being able to get into that deal.

Evandra lands 17.

5 million to build out Federated Imaging Network.

I think we all believe that Imaging is going to be one of the early adopters of AI and be able to be much more effective.

And so they're, they're sort of training models and gathering lots of images to train on.

So, interesting.

Wearable defibrillator maker, Kestra medical plots, 150 million IPO.

So this is interesting.

Uh, the company has raised again, it's another Bain capital portfolio company.

Um, they've previously raised 196 million.

Um, don't know a whole bunch of those names, but Bain capital T Row price.

So there are some, some more enterprise names that are on this list.

They raised almost 200 million.

They're IPO ing.

You know, at 150 million, it looks like, uh, Bain's going to own 52.

8 percent of the company.

And there are other owners.

So, I mean, what do you think they're, they're offering something like 20 percent of the company, maybe 20, 30 percent of the company.

So that would, that would value it, you know, north of a billion.

Yeah.

But it's, I mean, this is, they're claiming they're going to IPO on NASDAQ in the fall, I think.

I think it's in the fall, um, but there's no banker listed.

So I don't know if Bain is just trying to float an IPO themselves or they just didn't announce the banker, but the size of raising 150 million is a pretty small IPO.

You mentioned, I had not noticed it, but they've raised private capital in excess of that, which is again, not typical.

So great to see a healthcare IPO get filed and be planned, and it's a little bit different than I'm used to seeing with IPOs.

Yeah, and it could just be that Fierce didn't think to list the banker, you know.

Um, but it is interesting that the banker wasn't named, right?

All right, Wall Street Journal story here.

New Dream Exchange aims to list black owned companies.

I think this is a very interesting headline from the Wall Street Journal because then you read the article and the founders of this exchange clearly say they're race neutral.

Yeah, right.

So, it's

The headlines I mean, I think you know this.

The headlines are not written by the journalist.

And they, this headline is, is

Well, no, no, no, hold on.

The headlines can be read, written by the journalist.

They're, they're certainly not written by the subject of the, of the article.

And I, as I, as I read it, I've kind of jumped ahead, but it just stuck out to me as I read the headline knowing what the article is about.

So the article is about, um, you know, two, two black businessmen who are based in Chicago.

Yeah.

Okay.

Based in Chicago, uh, which is actually where I think the New York Stock Exchange is moving their exchange to Texas.

Oh, really?

Yeah.

Because, because it's not a net new that they're, that they're sending to Texas.

I think they're moving the one from Chicago to Texas.

Okay.

Um, so that, that's just an interesting, you know.

Point here, but, but they, they want to create, um, an exchange that is for small, small businesses.

There used to be the American exchange and the Toronto exchange, which were both sort of for smaller companies.

And I don't know that they exist anymore, but, uh, we need, we need more publicly traded companies.

We need more places for smaller companies, like the one we just covered 150 million raise.

Um, I agree.

This is not, I mean, they happen to be too.

Black guys that are starting it.

They say pretty specifically that it's not designed for black owned companies.

I mean, you certainly, you can be black owned, but any, any company they want to give a home to.

I think it's interesting that we're now seeing, you know, the Texas exchange.

is probably more of a conservative movement thing.

And this is probably more of a liberal movement.

What, what, I don't think it's necessarily black, but it's going to be in Chicago and, and more in the liberal side.

I

think this is great.

I mean, I, I, I want to see more, um, things that are not on the right, that, that have a real economic focus, you know, and an economic focus that is about businesses, right.

Um, not just about investing in.

Whatever, man, businesses, business creation, value creation, economic value creation, um, should not be a partisan thing, you know, both sides of the aisle should like be really into that.

And there's, there's a need for different exchanges.

I mean, the thresholds to be on New York exchange or NASDAQ are high and expensive.

And so having another exchange where they are vetting companies and it is regulated, but it's a lower tier where you can be smaller, I think would be really healthy.

Totally agree with that.

Totally agree with that.

All right.

House house passes the GOP budget teeing up enormous tax and spending cuts.

The numbers on this, uh, budget are staggering 4.

5 trillion in tax cuts.

And 2 trillion reduction in federal spending over a decade, uh, which is sort of lining up the major elements of President Trump's domestic agenda.

Yeah.

And it, it was, um, I mean, they don't have a lot of extra votes to spare and they, they pushed it across the finish line, which was surprising.

217 to 215.

Right.

I mean, they, they barely got it done.

Yeah.

And I think it was a lot of.

Whipping up their support and horse trading to get done.

Yeah, but they but they got it done So we'll see how it evolves the Senate has not On their side yet.

And so they have to get to do reconciliation to get both bills.

I think identical is a lot of concern.

We'll have the next story about, you know, how are you going to find 2 trillion in cuts?

HHS and particularly Medicaid is, has a big target on its back.

Yeah.

Medicaid has a, a multi hundred billion dollar, uh, target on its back.

Obviously that.

freaks out a lot of people, um, because it's, it's care for the most vulnerable.

And it's also a lot of the viability of, of our safety net hospitals.

Um, our nonprofit hospitals have to do a lot more charity care and a lot more, you know, their payer mixes much more leaning towards a government pay.

then the commercial pay.

Um, and even, you know, more and more for profit hospitals as Medicaid payments were brought up to be more on parity with commercial payments or supplemental payments.

Um, so it, it sort of lines up the whole industry quite frankly.

Um, and in this article from, uh, from fierce, they, they highlight that you had kind of all the big associations there.

So the American hospital association, obviously that's your nonprofit.

Federation of American Hospitals, that's your for profits.

Um, America's Essential Hospitals, that's your safety nets, right?

So like, there you go.

They're all sort of covered.

Yeah.

Um, the Association for Community Plans and, and they're, you know, they're messaging sort of at different levels of intensity based on how much of a target is on their back based on how big their total service area is.

That's, that's government pay, right?

Federation members are less Concerned.

Yes, but they are concerned.

They don't want to cut.

No, of course not.

Of

course not.

They're concerned, but they're less concerned.

Whereas America's essential hospitals, it's like 100 percent of business, right?

Right.

So, um, so they are like extremely concerned about these cuts.

Um, so yeah, it's look, I mean, Everyone is going to be watching this very closely in the healthcare space, um, to, to see where this is going to play out.

There will be a ton of advocacy, a ton of lobbying happening.

And I, I agree with you getting it, uh, how it will all play out in the Senate is going to be a completely different ballgame.

Uh, than when it was in the, in the house, so we will stay tuned this week's big presidential action executive order coming out of the white house was on price transparency, a relatively short executive order, um, as they go, but basically saying, Hey, you know, we, we put price transparency in place during, uh, Trump's first term, right?

Biden continued it, but was not necessarily very aggressive on it.

Of course, America's healthcare ecosystem was reeling from COVID.

So it makes sense that, you know, you were trying to kind of get the hospitals back to the

top focus.

Yeah.