Weekly Health Tech Reads 6/29/25

👋 Hey all! Kevin here. Welcome to this edition of my free weekly newsletter, where I share my perspective on healthcare innovation news from the past week that I found interesting. Heads up that I’ll be off next weekend for the 4th of July holiday, then back to our regular scheduled programming on July 13th. Sorry for getting this out a few minutes late this week, power was out at home after some Midwest summer storms last night 🙄 

One of the more interesting conversations I had coming out of last week’s newsletter was a discussion about this slide from Humana’s investor day, highlighting Medicare Advantage’s traditional 3% margin profile and how Humana expects to get back there in the coming years:

The conversation centered around this question: how confident should we be that Medicare Advantage returns to the attractive margin and growth profile it experienced over the last several years? Not surprisingly, Humana seems quite confident that Medicare Advantage will return to its historical margin profile over the next three years and that it is a good market longer term.

But… what if the headwinds MA is currently facing keep it from returning to that margin (and growth) profile that have made it such an attractive market?

The WSJ reported on Monday that lawmakers in Washington are attempting to close yet another perceived loophole in the MA program, based on the WSJ’s reporting back in December. This loophole being that MA plans are getting paid to cover veterans, some of whom are receiving care through the VA, which is prohibited from billing MA. The result, according to the WSJ analysis, is that MA plans received $44 billion in overpayments between 2018 and 2021. It’d be another yet hit to profits for an industry that was already pre-tax margin negative in 2024 per the chart above.

It provides another example of how there seems to be ample bi-partisan frustration at MA insurers at the moment and the current state of the MA program, which seems like it is caught between two opposing sentiments. On the one hand, folks like Dr. Oz appear to be fans of the concept generally given he has pushed the idea of “Medicare Advantage for all.” On the other hand, you have Oz saying “there’s a new sheriff in town” at his confirmation hearing, while emphasizing his plans to crack down on the excesses in the program. It is clear there is a palpable frustration with the program’s current implementation, even if there is longer term conceptual support. How do those two opposing currents net out for MA plans?

While I tend to think that Humana’s narrative is generally right, the conversations I had this week also made me think about an alternative path here — that frustration in DC is high enough that the current Medicare Advantage market dislocation isn’t a short term event, but rather a long-term reset to a new normal for the industry. With profits eroding and plans seeking to price for margin, that will cause benefit reductions that will erode the value prop advantage that MA has over traditional Medicare, and cause growth in the broader MA market to stall or even contract. It feels vaguely reminiscent of the death spiral conversations had about the ACA in the 2017 era, albeit a different set of circumstances. As I cover in further below in the newsletter, this ACA death spiral topic came up for me multiple times this week. That upheaval could then open the door for an opportunity for a massive overhaul of the market, potentially including the introduction of Medicare-Advantage-for-all.

It strikes me that opinions on the answer to this question will continue to have massive implications for the broader healthcare innovation ecosystem, which has seen a ton of capital poured into businesses that have been built on the backs of the success of Medicare Advantage over the past decade. Whether you think Medicare Advantage is going to return to its glory days in the near term or is past its prime I think is a big question to keep an eye on for the next several years.

Kevin

Other Top Headlines

• The oft-discussed Medicaid cuts as part of the One Big Beautiful Bill are very much in flux over the last week as the bill works its way through the Senate. I can’t be the only person reading this who learned a lot more about the Senate parliamentarian this week and the role they play in passing legislation like this, which apparently includes blocking the Medicaid provider tax provisions, among other provisions of the bill. It appears that Dialed back language on Friday is garnering more support from Senate republicans.

  • I thought this piece from folks at Georgetown provided some helpful perspective on “winners” and “losers” from the legislation, noting that the “only clear winners that we can identify are firms like Deloitte that contract with state Medicaid agencies to design and operate eligibility and enrollment systems. They can look forward “a vast market opportunity” helping expansion states meet the burdensome and costly administrative demands of operating a work reporting requirement regime.” Deloitte’s Medicaid business has seen some negative press in the past few years. The fact that it is viewed as a clear winner here seems like par for the course.

• Best Buy divested Current Health this week, three and a half years after purchasing the hospital-at-home model for $400 million as a key part of its growth strategy in healthcare. Current Health was purchased by its co-founder & former CEO Chris McGhee for an undisclosed amount. The move underscores the challenges Best Buy has had recently with the model, despite Current apparently serving one-third of the hospital-at-home volume in the US. This STAT post does a nice job highlighting where Current will head from here, with Current shifting its focus to oncology and other high cost conditions that can be managed in home. Seems like a wise shift given the trends in the oncology market in particular, and it wouldn’t be shocking to see Current successfully re-emerge after this move.

• Aledade announced it is acquiring the Michigan VBC operations of Commonwealth Care Alliance, which includes an ACO and independent physician group in Southeast MI, as it grows in the Michigan market. Aledade now supports 1,500 primary care providers across 500 practices in Michigan. It will be interesting to keep an eye on Aledade’s performance as it grows via acquisition like this — the VBC operations it has acquired here have had three owners over the past three years, as CCA purchased Reliance Healthcare in 2022.

• Two startups in the employer innovation market, Decent and Nice Healthcare, announced they are merging. Decent has historically offered health plans to employers wrapped around Direct Primary Care models. That offering will now be integrated into Nice’s DPC-ish primary care model. I chatted with Nice’s CEO a few years ago about the Nice model and growth of the platform and how the economics of an NP-centric primary care model for employers might dictate a business model shift like this to capture and manage more of the healthcare dollar.

• CMMI announced the Wasteful and Inappropriate Service Reduction (WISeR) Model on Friday. The new voluntary innovation model will add prior authorization requirements using AI / ML in attempting to reduce fraud waste and abuse in original Medicare (not Medicare Advantage). The model will focus on areas at high risk of waste and inappropriate services, including skin substitutes, electrical nerve stimulators, and knee arthroscopy. The skin substitute market in particular has received a lot of coverage for the fraud that appears to be occurring in the market. It’s a good reminder that prior auths, when implemented thoughtfully, can be a useful tool. Whereas many CMMI models have struggled to demonstrate cost savings over the years, this seems like it has a fairly straightforward path to driving real savings via CMMI, which I can imagine would be a welcome change in DC.

• Speaking of prior auths, a large group of health plans announced on Monday plans to simplify the prior authorization process. RFK Jr and Dr Oz shared in a press conference on Monday that this is the first step in broader reform to restore common sense to the process.

• Commure, General Catalyst’s AI business, is planning on acquiring more businesses, according to this Endpoint news reporting. It appears ready to scoop up AI scribe startups it expects to run out of funding in the next several years, while eyeing an IPO within the next 18 months.

• Fresh on the heels of the Hims debacle discussed above, Novo Nordisk announced a new relationship with WeightWatchers to sell Wegovy.

Quote of the Week

HHS Secretary Robert F Kennedy Jr testified this week that wearables are a key part of his MAHA agenda, and that we should apparently expect one of “one of the biggest advertising campaigns in HHS history” so that every American has a wearable within the next four years.

As someone with a box of Fitbit and Misfit and Jawbone wearables collecting dust in my closet, I am both intrigued and skeptical at the head of HHS articulating this as a key part of the MAHA agenda:

Funding Announcements

• Abridge, an ambient clinical documentation platform, raised $300 million at a $5.3 billion valuation. Abridge notes it now works with 150 health systems and will record 50+ million medical conversations this year.

• Certify, a provider data intelligence company, raised $40 million.

• Mandolin, an AI platform focused on specialty drug access, raised $40 million.

• Arine, an AI medication management company, raised $30 million.

• NPHub, a job platform for matching and placing Nurse Practitioners, raised $20 million.

• SuperDial, an AI startup helping automate RCM phone calls, raised $15 million.

• Handspring Health, a virtual mental health provider for children and families, raised $12 million.

• Juniper Genomics, a whole-genome embryo screening platform, raised $4.6 million.

What I’m Reading

Principles for the Future of Healthcare and Life Sciences by Jim Breyer and Morgan Cheatham
Cheatham, who recently joined Breyer Capital from Bessemer, and Breyer share the firm’s perspective on investment opportunities in healthcare moving forward. It’s worth checking out the life sciences focus for the firm. As the last cycle of funds that invested in health care services mature and generally don’t generate the returns imagined, I imagine we’re going to see a lot more investor interest in the themes generally discussed here, and a lot less interest in more traditional health care services like rebuilding care delivery models. Read more

The AI Revolution Won’t Happen Overnight by Paul Hlivko
This is a refreshingly grounded take from Hlivko, Wellmark Blue Cross Blue Shield’s CIO, who’s lived through past tech overhauls. It breaks down six common missteps companies are making—like underestimating the data prep required, over-trusting vendors, and assuming AI can plug in like SaaS. The core message: flashy pilots don’t cut it—real value comes from slow, systems-level transformation. Read More

How GLP-1s Are Breaking Life Insurance by Dr. Ashwin Sharma
An interesting perspective on how GLP-1s can make patients look healthier than they really are, leading life insurers to misclassify risk—what’s now a multi-billion dollar issue known as “mortality slippage.” Read More 

June 2025: The AI Agent Schism by Ayokunle Omojola
Omojola shared an interesting, and very nerdy, take on the implementation of AI agents and how they use reasoning to complete tasks. The article digs into how AI can be used to automate data collection tasks for healthcare claims that are in the process of being status checked. Read More

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