Health insurance stocks have looked a lot like the April temperatures here in Chicago: up, down, up, down.
After Medicare Advantage payment increases surpassed expectations earlier this month, major health insurers saw significant gains in the market. Then on April 17, UnitedHealth Group stocks plunged about 20 percent in premarket trading after the company fell short of first quarter earnings and revised its yearly outlook.
Other health insurers took a hit after UHG’s dismal announcement, including CVS Health (shares fell 8.5 percent in the immediate aftermath) and Humana (shares fell 16 percent).
But things appear to be looking up now. It’s 60 degrees in Chicago today, and Elevance Health announced first-quarter earnings that exceeded expectations—buoying health care companies after last week’s sell-off.
Medicare Advantage is at the center of the seesaw as health care stakeholders—on the payer and provider sides alike—parse meaning from these early earnings reports. UnitedHealthcare’s MA business reported elevated care activity, particularly in physician and outpatient services. While Elevance also saw higher MA costs, but they weren’t unmanageable.
To make sense of it all, I connected with Zarek Brot-Goldberg, an assistant professor at the Harris School of Public Policy at the University of Chicago, specializing in market structure, organizational structure and regulatory design in U.S. health care.
Brot-Goldberg’s take? “We shouldn’t over-extrapolate from one quarter report.”
If UHG’s report was indicative of a larger industry problem—i.e., a more structurally expensive phase of senior health care delivery—we would see a pattern across other insurers, Brot-Goldberg told me. Instead, Elevance’s healthy outlook suggests that this is more of a UHG problem than an industry problem writ large.
“United is kind of a complicated entity, because they’re so vertically integrated and their business model these days involves a ton of the health care supply chain,” he said. “They also exert a lot of control downstream on physicians through their ownership of providers.”
“It’s hard for me to say exactly what is causing the sudden shy,” he continued—but there are plenty of possibilities. UHG is the largest provider of MA coverage in the country. The company’s outlook also called out lower-than-expected beneficiary engagement among members in plans that are exiting certain markets—an issue that’s now impacting UHG’s Optum Health’s ability to secure adequate 2025 reimbursements.
Plus, like any company, health insurers benefit from a strong labor market, Brot-Goldberg said. They find themselves in trouble when people are laid off and companies scale back their health plan purchases—so our current situation isn’t ideal for an entity like UHG.
It’s also possible that UHG just made a mistake, Brot-Goldberg posed.
“I think that’s a that’s probably the most plausible answer,” he said. “These guys use complex forecasting models. Those models can be wrong, and sometimes they can be very off.”
Overall, hospital and health system leaders shouldn’t fret about UHG’s outlook, but they’d be smart to keep an eye on the company, according to Brot-Goldberg.
“If [UHG] suddenly looks less profitable, you worry that they’re going to seek other ways to cut costs and imagine that they would be more aggressive when trying to negotiate reimbursement rates,” he said. “That’s one thing you might be concerned about if you were a hospital executive…is there a general squeeze in demand for quality health insurance that is going to have to be made up on some margin somewhere?“
Essential Reading
Are AI-powered health care claims tools really improving the revenue cycle? It depends how you define “improvement,” finance and rev cycle leaders told me. Hospitals that enlist AI to handle claims and dispute denials report significant savings, both from right-sized reimbursements and improved labor efficiency. Still, payer-provider relations are tense as both sides try to navigate—and automate—the convoluted payment process. Get the full story here.
A Supreme Court case is challenging the legal authority of the U.S. Preventative Task Force, created by the Affordable Care Act. The task force recommends certain preventative services that insurers must cover at no cost to the patient, like cancer screenings and HIV prevention drugs. Two conservative Christian employers in Texas claim that the task force is unconstitutional and have posed a religious challenge, alleging that HIV prevention drugs “encourage and facilitate homosexual behavior,” The New York Times reports.
In this article, my colleague Kate Plummer unpacks how the case is unfolding. The ruling, expected in June, could impact preventative care access for more than 150 million Americans.Providence CEO Erik Wexler announced a hiring freeze for non-clinical roles—and multiple other cost-cutting measures—in an internal memo obtained by HealthLeaders. The Renton, Washington-based health system head expressed concerns about “economic headwinds that have shifted rapidly, forming a perfect storm that threatens our financial sustainability.”
Other steps to slim down expenses include restricting nonessential travel and filing lawsuits over delayed payments and denied claims from insurance companies. The system has already cut 46 leadership roles since the end of last year, ended major league sports sponsorships and spinning off its investment arm to include other partners, CEO Editor Jay Asser reports.
On Wednesday, Wexler shared the memo on his LinkedIn page, an unusually transparent move for a major health system CEO.
Here’s some good news in honor of Earth Day (which was Tuesday, if you missed it). The Association of Medical Device Reprocessors calculatedthat its members sold 36.3 million reprocessed single-use medical devices (or SUDs) back to hospitals and surgical facilities in 2024. In addition to reducing greenhouse gas emissions, this exchange helped health systems save more than $451 million last year. +
Reprocessed single-use medical devices (or SUDs) cost between 30 and 50 percent less than virgin materials and are more environmentally friendly. By using these recycled devices—including pulse oximeters, harmonic scalpels and EP catheters—health systems across the globe reduced CO2 emissions by 115,382,133 pounds last year. That’s equivalent to eliminating 5,889,103 gallons of gasoline!
Pulse Check
Bill Gassen is the president and CEO of Sanford Health, the largest rural health system in the United States. Based in Sioux Falls, South Dakota, the $11 billion system serves 2.4 million patients across 56 hospitals and more than 270 clinics.
As a rural provider, Sanford faces unique challenges when it comes to access. Many of its patients live in remote areas, so the health system has been investing in new methods of care delivery. In November 2024, the system unveiled a 60,000-square-foot Virtual Care Center (take a peek inside via this feature article). And to kick off 2025, it completed a merger with Marshfield Clinic Health System, based in Wisconsin.
Rural hospitals around the nation are struggling to make ends meet, but Sanford is singing a different tune: finishing 2024 with a positive operating margin of 5.2 percent. The organization says it owes that success to operational discipline and the prioritization of patient care. Gassen emphasized that focus on access when we connected for a pulse check:
Strategic partnerships have been a core lever for Sanford in recent years. What do you see as the most underutilized type of collaboration across the health care industry today?
We need to put more focus on how smart, strategic system combinations benefit patients—especially if we are serious about advancing innovation, expanding access and driving transformation.
The increasingly complex and rapidly evolving health care landscape demands we think bigger and act faster. We must look beyond siloed models and seek opportunities to blend strengths with other organizations who have a shared vision for a fully integrated operating model.
System combinations open the door to reimagining how care is delivered at every level— from expanding primary care access in rural communities to extending the reach of specialty services typically concentrated in urban areas. They enable us to share collective expertise, scale new technologies, improve health outcomes and strengthen our workforce —ensuring we can continue to meet the needs of our communities who place their trust in us.
For example, since merging with Medcenter One in Bismarck, North Dakota, in 2012, we’ve grown provider recruitment by a net increase of more than 54 percent: hiring more than 400 new clinicians, adding several new service lines and expanding specialty access.
I believe the future of health care rests on the shoulders of organizations willing to combine with purpose and vision—those who recognize that the health care challenges and opportunities we face today are too big for any one organization to tackle alone. By combining capabilities, resources and solutions-focused ideas, we can redefine what world-class care looks like and create a future where every patient, in every community, has access to the care they need to live healthier lives.
Improving access is also a major goal for your system—especially in rural communities. Which strategies have been most effective in reaching patients where they are, particularly in remote locations?
Sustainable access to care is a top priority for us—especially in rural areas, where two-thirds of our patients live. We cannot fear innovation. What we do will not change, but how we do our work must if we want to solve the most pressing challenges in health care today, including access, quality and sustainability.
That’s why, in 2021, we launched a landmark $350 million virtual care initiative. Virtual care is one of the most important tools we have to bridge workforce gaps and ensure access is not limited by a zip code. Our new Virtual Care Center symbolizes our commitment to reimagining the future of care.
Today, we deliver virtual care in 78 specialties across Minnesota, North Dakota and South Dakota. Two-thirds of our patients who utilize virtual care live in communities at least 30 miles from a major medical center, saving an average of 176 miles in travel, a tank of gas and time off from work.
Virtual care isn’t just about convenience—for many, it’s virtual care or no care at all.
We’ve also been focused on expanding virtual behavioral health. One in five behavioral health visits with a Sanford Health provider is virtual, and patients can now use a new self-scheduling tool in our electronic medical record. We’ve also launched a virtual behavioral health program in 26 critical access hospitals, helping rural emergency providers connect with mental health specialists in under an hour—improving care in time to make a difference.
C-Suite Shuffles
Dr. Wesley Burks is stepping down from his roles as CEO of UNC Health and dean of UNC School of Medicine,effective September 2. Dr. Cristy Page, chief academic officer and president of UNC Health Enterprises, will take the reins in the interim while the organization searches for a permanent successor.
Burks—who has helmed the academic system since 2018—plans to focus on the development of North Carolina Children’s, a new enterprise conceived during his tenure in partnership with Duke Health. The project will center around the state’s first freestanding children’s hospital, per UNC. Dr. Mehmet Oz was sworn in as CMS administrator on Friday by HHS Secretary Robert F. Kennedy Jr. During the ceremony, President Donald Trump said that Oz will “work tirelessly to strengthen and protect Medicare for our nation’s seniors and Medicaid for the needy,” claiming “there will be no cuts” to the programs that Oz now oversees.
Jeffrey Bowie, the CEO of Oklahoma-based cybersecurity firm Veritaco, was arrested and charged with installing malware on a computer at SSM Health’s St. Anthony Hospital, The HIPAA Journal reported. SSM confirmed that patient data was not accessed during the attempted breach.
This story is a grim reminder that you can’t be too careful when it comes to cybersecurity! Earlier in the month, I spoke with some of the industry’s leading cybersecurity experts about precautions that hospitals frequently overlook and simple safeguards that everyone should employ. You can watch our full conversation for free here.
Executive Edge
Lisa Shah
Dr. Lisa Shah is a physician focused on obesity and metabolic disorders, and is the executive vice president and chief medical officer for Twin Health: a company that creates a “digital twin” of each user’s metabolism, then offers recommendations for daily activity, sleep and nutrition via a smartphone app.
It may sound like a Black Mirror episode, but there’s science behind this technology. According to the American Diabetes Association, digital twins have shown significant rates of remission for patients with Type 2 diabetes.
This week, I connected with Shah to learn how she (and her digital twin) maintain health and wellness while managing a busy schedule:
- “As a mom of three, a practicing physician and a working professional, every hour of my day is critical—especially the time I spend with my children. I’ve discovered that true wellness comes from prioritizing my metabolic health while balancing my role as a parent and a very demanding career.
- “My Digital Twin and my care team recommend six hours of sleep and the importance of 7,500 steps, so I choose to exercise in the mornings so I can reserve my evenings for family time. When I can’t get in my morning workouts, I’ll try to get my steps in however I can—whether it be housework or frequent, short, dog walks. My Digital Twin has shown me that those steps can be more impactful than a high-intensity workout. Mindful eating is another part of my wellness routine, and for me, that means enjoying the foods I love in moderation instead of restricting them.
- “Twin has helped me find a rhythm that works: staying active, spending quality time with my kids, and eating with intention. When I do these things, I feel better, my mood improves and I feel more balanced overall. This ensures that I can be more engaged at work and bring more energy and focus to my professional responsibilities.”
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