UnitedHealth warns of rising medical costs in the healthcare industry, impacting health insurers' stocks. Incredible Health's CEO breaks down the nursing shortage and rising healthcare expenses. The potential benefits of opening up immigration to alleviate labor stress are explored. The hosts analyze J Powell's statements and the uncertainty surrounding the Federal Reserve's decision on monetary policy.
Read more
AI Summary
AI Chapters
Episode notes
auto_awesome
Podcast summary created with Snipd AI
Quick takeaways
United Health's shares declined after remarks about rising medical costs and increased percentage of premiums paid for medical costs.
The unpredictability and disagreement among investors about future hikes or cuts in healthcare costs has created uncertainty in the market.
Deep dives
United Health Group's remarks on surgeries impacting healthcare sector
United Health Group's chief financial officer, John Rex, made remarks about a rebound in surgeries and outpatient care for Medicare patients, which would increase the percentage of premiums paid for medical costs. This caused United Health's shares and other insurers' shares to decline while boosting healthcare providers and device makers' shares.
Understanding the medical cost ratio and its impact on United Health's margin
The medical cost ratio, which represents how much United Health pays for medical costs, is around 82%. John Rex mentioned that the ratio is likely to increase to around 83% in the second quarter. While this is not the worst scenario, the unpredictability and disagreement among investors about future hikes or cuts in healthcare costs has created uncertainty in the market.
Impact of the rebound in care activities on United Health and the Medicare advantage business
The rebound in care activities, particularly in Medicare advantage plans, has positive implications for both insurers and care providers like United Health. The comments from United Health's CFO indicated that the company has experienced increased demand for care delivery, which is beneficial for their business. However, the Medicare advantage business has faced regulatory pressure, making it a challenging environment for health insurers.
Bloomberg News Health Care Reporter John Tozzi and Bloomberg Intelligence Senior Health Care Analyst Glen Losev discuss shares of US health insurers plunging Wednesday after comments from a UnitedHealth Group executive triggered concerns about rising costs. Dr. Iman Abuzeid, Co-Founder and CEO at Incredible Health, breaks down the hiring firm's 2023 Healthcare Executive Report on the state of nursing. And we Drive to the Close with Liz Young, Head of Investment Strategy at SoFi and Bloomberg Intelligence Chief US Interest Rate Strategist Ira Jersey. Hosts: Matt Miller and Madison Mills. Producer: Paul Brennan.