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In the News
What happened in healthcare recently—and what we think about it.
- An update on President Trump’s healthcare nominees. Last Thursday, the White House pulled the nomination of former Rep. Dave Weldon, M.D., to serve as director of the Centers for Disease Control and Prevention. A supporter of debunked vaccine claims, Weldon appeared to face an uphill battle in the Senate. Additionally, last Friday, the Senate Finance Committee held a confirmation hearing to consider the nomination of Mehmet Oz, M.D., to be Centers for Medicare & Medicaid Services administrator. At the hearing, Dr. Oz was critical of Medicare Advantage (MA) and dodged questions regarding potential Medicaid cuts. As of Friday morning, a vote to advance his nomination from the Finance Committee to the full Senate had not been scheduled.
- The Gist: While none of the swing senators had directly come out against Weldon’s nomination, Weldon likely would have struggled to earn enough support to be confirmed. Legislators appeared willing to spend political capital opposing this nomination, even though the Senate has allowed President Trump’s other controversial picks through. Health and Human Services (HHS) Secretary Robert F. Kennedy Jr. was reportedly “upset” to lose this potential ally. There is no clear frontrunner to replace Weldon’s nomination for a role that has garnered scrutiny in recent years. However, while Democratic senators have criticized Dr. Oz for his healthcare investments and previous support of dubious products, his confirmation appears all but certain. As the “new sheriff in town,” Dr. Oz brings an untraditional set of experiences to a role that will be key to enacting Secretary Kennedy’s “Make America Healthy Again” agenda. As MA potentially exits its “golden age,” it will be noteworthy to watch whether Dr. Oz scrutinizes the program that has become more costly to administer than traditional Medicare or pull from his previous experience as a strong supporter of the program.
- HCSC acquires Cigna’s Medicare Advantage business. On Wednesday, Health Care Service Corporation (HCSC) announced that it had completed the $3.3 billion acquisition of Cigna’s MA, Medicare Supplemental Benefits, Medicare Part D and CareAllies businesses. Cigna will continue to provide pharmacy benefits for the next four years, per the terms of the definitive agreement, which was signed early last year. HCSC now has access to MA markets in an additional 25 states and the District of Columbia, the national Medicare Part D market and the Medigap market in 48 states and the District of Columbia.
- The Gist: With just 2% market share, Cigna was a minor player in Medicare Advantage, but the closure of this deal represents an official strategic divergence from other large payers. When this acquisition was announced, most other payers were committed to growing their profitable MA businesses; Humana was in the process of exiting the commercial insurance market so it could focus on MA. However, late 2023 and 2024 were a challenging time for payers, as MA utilization increased. Meanwhile, Cigna could focus on growing its pharmacy business, increasing pharmacy revenues by 35% and weathered industry headwinds better than its competitors. While this deal may be advantageous now, it will be interesting to follow how this strategic shift ages. With more than half of seniors enrolled, MA represents a huge, popular market that likely will continue to grow. The Trump administration appears to support continued MA growth.
- Probationary HHS workers rehired as tensions between executive and judicial branches grow. Last Thursday, U.S. District Judge James Bredar ordered the reinstatement of more than 24,000 fired probationary employees at 18 federal agencies by 1 p.m. ET on March 17, including more than 3,000 probationary workers at HHS. This ruling came shortly after another federal judge ordered the rehiring of federal employees at six other federal agencies. Bredar scheduled a hearing for March 26 to decide whether to extend this ruling. The Justice Department has appealed both rulings. While these HHS workers are reinstated for now, additional restructuring and layoff threats loom.
- The Gist: This case on the mass firing of the federal healthcare workforce reveals a legal question—which predates the Trump administration—at the core of many of the cases against the executive branch. The question of whether federal district court judges can issue a national injunction, effectively directing policy with implications far beyond their district, remains unsettled. The judiciary has been the only substantial check on Trump’s power, and tensions between the two branches recently reached a fever pitch. The Supreme Court has not ruled on the use of nationwide injunctions. However, given their increased use, it may now feel inclined to act. In this case, the federal healthcare workforce is vital to effective care delivery and significant cuts could lead to disruptions that hurt patients.
Plus—what we’ve been reading.
- The measles outbreak hits home—“That’s our kid.” Published earlier this month in The Atlantic, this piece introduces us to the father of the child who was the first American to die of measles in a decade. The measles outbreak in rural west Texas, which has since spread to New Mexico and Oklahoma, has resulted in 317 cases of the illness, 36 hospitalizations, and two deaths, the first that of a 6-year-old girl from the outbreak’s epicenter. This victim’s community is deeply religious, distrustful of outsiders and unhappy with the attention it’s receiving. Like many who are suspicious of vaccines, there is the fear that inoculations are more dangerous than the diseases they were developed to prevent. The young girl who died was not vaccinated. “The vaccination has stuff we don’t trust,” her father said, even after his daughter died. “We don’t like the vaccinations, what they have these days. We heard too much, and we saw too much.”
- The Gist: Before the measles shot was introduced in 1963, the number of deaths caused by the disease in the United States each year was 400 to 500. The mortality rate for childhood measles is 1 to 3 in 1,000, with one in five cases requiring hospitalization. Thanks to vaccines, the memory of suffering has faded, and the disease was declared eradicated in the United States in 2000. From a scientific perspective, measles should be a non-issue. Clearly, it’s not. In the county in which the death occurred, the measles vaccination rate among kindergartners is 82 percent, well below the 95 percent threshold for maintaining “herd immunity,” and experts say this may actually undercount vaccine resistance there. This article reminds us that behind each statistic is a human story, in this case, a deeply tragic one. Additionally, this outbreak highlights the importance of reaching patients where they are, rather than where we would like them to be, in order to build trust and ensure effective care.
Graphic of the Week
A key insight illustrated in infographic form.
Senior living M&A acquisitions increase again in 2024
This week’s graphic highlights new data that illustrates interesting trends in senior living mergers and acquisitions. An increasingly common trend for hospitals consolidation is also continuing in the senior living market. In 2024, there were 62 announced senior living M&A transactions, compared with 59 in 2023 and 48 in 2022. Much of activity constitutes for-profit entities acquiring not-for-profit entities; this trend nearly doubled between 2022 and 2024. For-profits predominantly acquired skilled nursing facilities (SNFs); this comprised 25 out of 33 transactions in 2024. Not-for-profits continue to shy away from SNFs because of the challenging nature of managing their operations. Another trend: the larger players are getting larger. In 25 out of 29 transactions in which a not-for-profit was the acquiring party, the acquirer already owned at least three facilities. While there is reason to be cautiously optimistic about continued M&A activity in senior living, factors such as potential Medicaid changes and staffing rule changes could hamper the sector.
This Week at Kaufman Hall
What our experts are saying about key issues in healthcare.
Potential policy changes in Washington have introduced a new level of uncertainty for healthcare leaders.
In Kaufman Hall’s 2025 Spring Rating Agency Update, the not-for-profit healthcare leads from Fitch Ratings, Moody’s Ratings and S&P Global Ratings discussed the current healthcare environment and the potential impact of possible policy changes on their industry outlooks and on individual organizations’ credit ratings. A recording is now available on the Kaufman Hall website.
On our Podcast
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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
