In our last blog, we referenced La Terreur (from the French Revolution) in relation to, and as a way to reflect on, the assassination of UnitedHealthcare CEO Brian Thompson on December 4, 2024. This event, which has been updated to an “act of terrorism” by Manhattan District Attorney Alvin Bragg, initially did not seem to be a turning point for healthcare. However, it wasn’t long before someone compared the assassination to the killing of Archduke Franz Ferdinand on June 28, 1914, which is often cited as one of the key events leading to World War I. While I thought about the comparison, I still believe that nothing justifies such a murder.
President Trump Weighs In
What continues to capture my attention is the wave of frustration expressed online. Many people have stories—many of which center on issues with insurance authorizations. President Trump, as reported by Fox News, headlined with “Trump blasts UnitedHealthcare CEO murder suspect support,” and was quoted as saying, “I think it’s really terrible that some people seem to admire him – like him. It was cold-blooded, just a cold-blooded, horrible killing.” Even Trump’s detractors would likely find it hard to disagree with this sentiment. People are clearly frustrated, and social media has amplified that anger, providing a platform for widespread expression. Some might even argue that this very dynamic is what helped Trump in his historic political comeback.
This week, President Trump also made waves in the healthcare world. Reuters reported on his comments regarding the role of “middlemen” in the pharmaceutical industry. Trump remarked, “The horrible middleman that makes more money, frankly, than the drug companies, and they don’t do anything except they’re a middleman.” These remarks, made during a news conference at his Mar-a-Lago club in Palm Beach, Florida, have had an impact on insurer stocks.
As someone who has owned pharmacies and captive drug dispensaries in physician offices, and worked as a Third-Party Administrator (TPA) and in global-risk management for 14 healthcare plans, I can tell you that navigating the world of Pharmacy Benefit Managers (PBMs) is a baffling task. We never really understood exactly what PBMs did or who received the so-called “rebates” (or, more accurately, kickbacks). It was a murky area, shrouded by strict non-disclosure agreements. Sometimes, we got the rebates; other times, they went to the Managed Care Organizations (MCOs). And on many occasions, we proved it was cheaper to simply pay the full price at the pharmacy. The complexity of these arrangements is something that remains difficult to explain, even for people working within the healthcare system. At one point, we worked with the big three pharmaceutical distributors that control about 90% of the U.S. market—McKesson, AmerisourceBergen, and Cardinal Health—each with different products, and with 14 MCOs, some large enough to have their own PBMs, while others used third parties. As an MSO, we had access to more intelligence and data than most of the MCOs we worked with.
There are two significant points we’ll dive into after the holiday break: 1) pending U.S. legislation that seeks to place “guardrails” on PBMs, and 2) the efforts by PBMs to acquire cancer specialists, seemingly to lock down their largest customers.
I also find myself wondering why Amazon hasn’t entered this space. When we owned pharmacies, we purchased pharmaceuticals at a 26% discount off the Average Wholesale Price (AWP)—and we had only two pharmacies. That didn’t make sense. Personally, I often pay for generic medications with a discount card because it’s cheaper than what commercial insurance offers.
Back to Trump’s comment on middlemen: As we’ve discussed before in the context of the now-famous DOGE (Department of Government Efficiency)—which, ironically, is not a real department but led by entrepreneurs Elon Musk and Vivek Ramaswamy—there are many intermediaries in healthcare that are, in some cases, created or enabled by regulations. While I won’t name names to avoid creating more enemies, I can tell you that there’s a trillion dollars in healthcare spending that could be reduced by streamlining operations, eliminating redundant regulations, and dismantling sacred deals across the board.
Ultimately, it is the consumer—the intended beneficiary of the system—that is being hurt the most. Physicians also bear the burden of increasing regulations, growing patient volumes, and shrinking payments when adjusted for inflation.
AI and the New Consumer of Healthcare
We are entering a new era where consumers will fight to take more control over their healthcare, including managing referrals and accessing their data. I foresee companies (perhaps even ours) assisting consumers in gathering the necessary documentation to challenge insurers when they deny referrals, treatments, or medications. If the insurance company denies a claim, we can leverage the vast body of research—such as the 200,000 studies published in the last 25 years—to fight back. Great research is often hard to dispute, and I’ve been on many sides of this issue.
AI can match the consumer’s condition with the most appropriate treatment regimens, based on a doctor’s recommendations and published clinical research. It can also support doctors by suggesting changes to patients’ nutrition or exercise plans, which could help alleviate the time burden on physicians. Additionally, with the integration of Internet of Things (IoT) devices, AI can track a patient’s progress in real-time, with that data being shared directly with their doctor.
For more information, refer to these articles:
Trump Blasts UnitedHealthcare CEO Murder Suspect Support
Insurer Stocks Fall After Trump Says ‘We’re Going to Knock Out the Middleman’
-Noel J. Guillama, Chairman
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