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In the News
What happened in healthcare recently—and what we think about it.
- UnitedHealth Group falls short of earnings expectations. UnitedHealth Group (UHG) shares plunged last Thursday after the company reported its first-quarter results and adjusted its 2025 outlook. The company revised its net earnings per share to $26 to $26.50, lower than its previous guidance of $29.50 to $30 per share for the year. UHG reported that high utilization in UnitedHealthcare’s Medicare Advantage (MA) business and unexpected changes in its Optum Health division drove the earnings miss. This miss was the company’s first since 2008 and sent the stock’s price down more than 20% last Thursday, its biggest single-day price drop since 1998.
- The Gist: UHG endured lower profitability across its business segments in 2024. However, as the model vertically integrated payer, this miss took the industry by surprise; UHG had weathered increased medical costs in 2024 better than most of its peer payers. It remains to be seen whether these challenges are a bellwether for the industry or unique to UHG. Elevance beat analysts’ expectations earlier this week while Humana and CVS will report their Q1 earnings next week. As the largest employer and affiliate of physicians nationwide, Optum Health was uniquely exposed to Centers for Medicaid & Medicare Services risk model changes. It seems that UHG is now learning what health systems and some retail health clinics have known for a while: managing downside risk and clinicians is a tough financial and logistical challenge. While generous MA payment rates in 2026 may solve some of these problems, it will be interesting to see how UHG navigates these turbulent waters.
- Eight synthetic food dyes to be phased out of food supply by 2026. At a press conference on Tuesday, Department of Health and Human Services (HHS) Secretary Robert F. Kennedy Jr. announced that 8 petroleum-based synthetic food dyes would be phased out of the U.S. food supply. The Food and Drug Administration (FDA) will revoke authorization for Citrus Red No. 2 and Orange B, which are “very rarely used;” HHS and FDA will also work with the food industry to remove the 6 other dyes by the end of 2026. HHS and FDA have also requested that already-banned Red No. 3 be removed from the food supply before the deadline previously set by the Biden administration. Synthetic food dyes have been linked to behavioral and cognitive problems in children.
- The Gist: The “Make America Healthy Again” movement has long criticized the use of dyes in the food supply, so this achievement is a key win for Secretary Kennedy, who wants to achieve substantial changes to the food supply before the end of this administration. Ending the use of synthetic food dye enjoys rare bipartisan support; a state-by-state patchwork system has emerged as states from West Virginia to California enacted their own restrictions. Notably, much of this change is based off an “understanding” with the food industry that appears willing to work with Kennedy. Six of the 8 dyes—for now—are not being banned outright. While there is strong current support for this movement, should the political winds shift, the food industry may be less compliant without a legally binding agreement.
- Eli Lilly’s GLP-1 pill shows promising results. Last Thursday, Eli Lilly announced the success of the first of seven parts of the Phase 3 clinical trial for its GLP-1 pill. The efficacy and safety of the medication, orforglipron, was similar to that of Lilly’s injectable GLP-1s, reducing weight by an average of 7.9% and lowering A1C levels by an average of 1.3% to 1.6% across doses. This successful Phase 3 result for a small molecule GLP-1 taken orally is the industry’s first. The company plans to apply for FDA approval for weight-loss use by the end of 2025 and for type 2 diabetes use in 2026.
- The Gist: An oral GLP-1 would be a gamechanger in a market whose value has exploded in recent years. Many patients dislike or cannot use injectables, so an oral medication would greatly increase GLP-1s potential market size. The drugmaker reported it expected to launch orforglipron “without supply constraints,” a nod to the shortages the company experienced for years, which allowed compounding pharmacies to enter the market. On the heels of Pfizer’s announcement to discontinue developing its oral GLP-1, Eli Lilly is emerging as the leader in the “fight for the future of the obesity market.” Should further trials succeed, orforglipron could transform the healthcare ecosystem and heavily influence how providers plan long-term strategies.
Plus—what we’ve been reading.
- Can organs successfully be frozen, then transplanted? Published last week in The New York Times, this piece details a breakthrough in kidney transplantation. Scientists successfully transplanted a kidney that had been frozen for 10 days into a pig. The article details the challenges facing kidney transplantation, including that one reason why the waiting list is so long is that the kidney’s small transplantation window limits the number of qualified potential recipients. By drawing from other research, scientists were able to figure out a way to thaw the kidney without damaging it, a longstanding hurdle. While scientists are still far from transformative human studies, this promising result in a large mammal is a beacon of hope.
- The Gist: This breakthrough is a huge step forward for medicine that is hard to overstate. This research could overcome a key hurdle for freezing organs in humans, which would reduce shortages and likely lead to fewer organ rejections. Notably, an insight from a Canadian wood frog study years earlier was key to designing this case’s successful protocol. Scientific progress is often made over decades and built on accumulated knowledge. As federal research institutions and universities face potential research funding cuts, this story is a reminder of the need to support seemingly small steps that may lead to the next generation of medical breakthroughs.
Graphic of the Week
A key insight illustrated in infographic form.
Public does not want Medicaid funding cuts
As Medicaid cuts look increasingly likely per Congress’ recently-passed budget plan, this week’s graphic uses survey data from KFF to take stock of the public’s view of the program. The data show that most Americans want Medicaid funding to increase or stay the same. While Democrats support the program’s funding more strongly, only about one-third of Republicans want the program’s funding to decrease. Rural residents, who tend to rely on Medicaid more than urban residents, also strongly favor maintaining or increasing Medicaid funding. Survey respondents overwhelmingly expressed that Medicaid is important to their local communities, with more than 9 in 10 respondents across political party identification agreeing the program was very or somewhat important to their community. Rural residents expressed overwhelmingly strong support, with 98% calling the program very or somewhat important. Medicaid enjoys a popular reputation and has transformed care access in communities nationwide, making public pushback about potential cuts likely.
This Week at Kaufman Hall
What our experts are saying about key issues in healthcare.
A recently announced federal policy change—currently on hold pending court challenges—would cap the amount of money research institutions receive from the National Institutes of Health (NIH) for indirect costs to 15% of a grant.
In a new article, Matthew Bates discusses how this policy change calls out institutions and individual researchers for playing by rules that they did not create. Indirect costs have been inflated because direct research costs more than the NIH is officially willing to pay. Americans have undeniably benefited from NIH-funded research. Do we, as a nation, want to cure disease? If so, are we willing to pay for it?
On Our Podcast
The Gist Healthcare Podcast—all the headlines in healthcare policy, business, and more, in ten minutes or less every other weekday morning.
Coming up next week, a recent KFF Poll finds widespread misinformation regarding measles and the MMR vaccine. We get that story and other healthcare news this upcoming Monday.
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Thanks for reading! We’ll see you next Friday with a new edition. In the meantime, check out our Gist Weekly archive if you’d like to peruse past editions. We also have all of our recent “Graphics of the Week” available here.
Best regards,
The Gist Weekly team at Kaufman Hall
