UnitedHealth’s next physician acquisition & the January health insurance churn

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JPM24 is ~here~

The J.P. Morgan Healthcare Conference is exhausting and wildly expensive — a rather apt metaphor for the health care system itself. But the confab also acts as a truth serum, as health care executives, attorneys, and financiers get so excited about mingling and dealmaking that their real motivations walk right onto a stage.

This is especially the case with hospitals. Last year, hospital executives made a couple things explicitly clear at the conference: They were going to raise prices and buy whatever they needed to grow revenue. Well, that happened, and now Tara and I expect hospitals to project more optimism even if they are still losing money on patient care, we write in our JPM24 preview.

Sixteen nonprofit, tax-exempt hospital systems will be at this year’s JPM meeting, and Tara will be focused on them. Other big topics we’re watching? How health insurers view Medicare Advantage as scrutiny grows and members get more care, and whether there will be any big provider, care delivery, or health insurance IPOs this year. Read our preview of this year’s conference.

That January health insurance churn

An underappreciated dysfunction of our health care system: Every month, millions of working Americans lose or switch their health insurance plans, inevitably creating confusion with their doctors and hospitals and potentially resulting in care getting postponed.

But that dynamic is not always captured in the federal government’s data on job separations (the latest data came out Friday). What about the people who don’t leave their jobs, but still move to different health plans?

This effect is acutely felt in the opening days of January, when new health insurance plans go into effect for most workers. Employers may swap carriers, forcing workers to get new insurance cards. Or people may switch to their spouse’s or partner’s employer plan. Appointments are pushed back because whoops, you have new insurance, and everything wasn’t authorized in time. Has this happened to you or someone you know? Reach out with your health insurance switch-a-roo stories: [email protected].

Chief competition officer

A couple weeks ago, we told you about the new health care competition advisers that HHS, FTC, and DOJ are standing up as part of the Biden administration’s crackdown on “corporate greed” in health care.

My colleague Brittany Trang has the scoop on HHS’ pick for its new “chief competition officer” position: Stacy Sanders. She currently works within HHS and has been in charge of implementing the Medicare drug pricing negotiation process, among other things, and now will lead the agency’s efforts to promote competition in health care markets. Before she joined HHS in 2022, she was a staff director for Sen. Bob Casey and before that was federal policy director of the Medicare Rights Center, a patient advocacy group. Read more.

Walgreens: Not that into providers anymore

Walgreens had a moment where it increasingly wanted to be your doctor and nurse practitioner — for example, investing more in VillageMD and acquiring Summit Health. But now that the pharmacy chain is under new management, that vision will not expand.

“I would not expect to see us investing in additional primary care assets,” new CEO Tim Wentworth said on last week’s earnings call. Wentworth, the former head of Express Scripts, the pharmacy benefit manager giant that he sold to Cigna, took over for the ousted Rosalind Brewer in October.

Part of the reason Walgreens is calling off its provider binge: Wall Street is very unhappy with the company’s finances, and the biggest drag on Walgreens’ profitability is VillageMD. FYI: Wentworth said Walgreens has no plans to buy a PBM, either. If you’re craving more: Walgreens will hit the JPM stage at 11:15 a.m. ET today.

UnitedHealth’s next physician acquisition

UnitedHealth Group is looking to buy The Corvallis Clinic, a 100-doctor practice in western Oregon, Christian Wihtol of The Lund Report reports.

UnitedHealth already employs or is affiliated with 10% of all U.S. physicians. And this deal only came to light because the Oregon Health Authority, a division of the state’s government, has a “health care market oversight” program that requires significant transactions within a community to be reported and evaluated.

Industry odds and ends

• UnitedHealth reports fourth quarter earnings Friday morning.
• Staying on UnitedHealth: The conglomerate is suing a small company that is focused on managing the health of diabetes patients. That competitor was founded by two former top UnitedHealth executives, and the lawsuit alleges those former employees stole trade secrets they previously sold to UnitedHealth to create their rival firm. Read the lawsuit.
• CVS Health expects its Medicare Advantage membership “to grow by at least 800,000 in 2024,” the company said in an update to investors. That is a big amount, and it was partially expected after companies like Humana said they were “not as competitive” this year. In fact, CVS attributed the big expected jump in membership to “a higher than historical proportion of new sales coming from competitor MA plans.”
• Essentia Health and Marshfield Clinic Health System — large hospital systems with facilities in Minnesota, Wisconsin, and North Dakota — ended their merger talks.
• The former CEO of One Medical, Amir Dan Rubin, is starting his own health care venture capital firm called Healthier Capital, Melanie Evans of the Wall Street Journal reports.
• Select Medical, whose main business is operating long-term hospitals and inpatient rehab facilities, is considering a spinoff of Concentra, its division that operates clinics that cater to workers.

The Meme Ward