Cut Out the Middlemen
Michael Mignano
@mignano
−1.4%
since Sep 15
The idea
I believe too much money in American health care is being drained by middlemen: private equity strips providers while insurers and benefit managers post record profits and deny care. So this basket skips the extractors entirely and owns the fixers instead: direct-to-consumer medicine, HSA platforms that keep health dollars with patients, low-cost care settings, and software that cuts out waste. It's spread across five themes with no single holding over 8% and 10% in cash to add if the theme sells off, held for years unless the structural story changes.
What it owns
- Drugmakers that sell treatments directly to patients or invent cures that remove years of managed care from the system, earning by innovation rather than by managing benefits. · Eli LillyIt sells weight-loss drugs and other treatments directly to patients online at cash prices, bypassing pharmacy benefit managers entirely., Novo NordiskIt ships weight-loss and other drugs directly to cash-paying patients through NovoCare Pharmacy at prices that cut through pharmacy benefit manager markups., Vertex PharmaceuticalsIt makes actual cures for cystic fibrosis and sickle cell disease, removing years of expensive managed care from the system with its dominant franchises., Regeneron PharmaceuticalsIt earns by inventing treatments that work rather than managing benefits, with Dupixent expanding into new conditions and replacing aging product revenue.21%
- Companies that sell care and medication straight to patients for a listed price, letting them skip the insurer entirely. · Hims & Hers HealthIt sells prescription care and generic drugs straight to subscribers for cash with no insurer in the middle, relying on strong subscriber growth and prices low enough to beat insurance., Amazon.comIt offers pharmacy and flat-fee medication delivery with posted cash prices that undercut the traditional pharmacy benefit manager model., Teladoc HealthIt replaces expensive office and urgent-care visits with virtual ones, the cheapest care setting available, relying on visit volume growth and stable direct-pay business., LifeMDIt is a smaller cash-pay telehealth company growing revenue without leaning on insurance reimbursement, riding the shift to direct patient payment for care.19%
- Outpatient surgery centers and independent lab networks that deliver the same care far cheaper than traditional hospital systems. · Tenet HealthcareIt has rebuilt around ambulatory surgery centers where operations cost far less than hospital stays, with surgical volumes and outpatient margins as the main drivers., Quest DiagnosticsIt operates a national lab network that runs tests at far lower cost than hospital labs and sells tests directly to consumers, winning outsourcing deals from hospitals., Labcorp HoldingsIt is the other half of the low-cost testing duopoly, winning hospital lab outsourcing deals and expanding its direct-to-consumer test menu., Ardent Health PartnersIt operates lean regional hospitals in growing mid-size markets under public ownership rather than private equity, relying on admission growth and margin improvement.18%
- Platforms and software that let patients and employers keep health dollars in their own hands instead of flowing through benefit managers and middlemen. · HealthEquityIt is the largest independent health savings account custodian, keeping patient health dollars in the patient's own hands as accounts and balances grow., GoodRx HoldingsIt lets patients pay cash prices below their insurance copay, proving that the middle layer overcharges, and relies on growing monthly users and pharmacy partnerships., Waystar HoldingIt cleans up billing between providers and payers by cutting denied claims and administrative waste, money the middleman currently consumes.18%
- Tools that strip administrative overhead and trial-and-error spending, the part of health spending that everyone agrees adds no value. · DoximityIt saves doctors hours of administrative work each week and gives pharmaceutical companies a cheaper way to reach physicians than traditional sales forces., Veeva SystemsIt provides software that lets drugmakers run clinical trials and compliance with less overhead, reducing the cost of bringing new medicines to patients., Tempus AIIt uses artificial intelligence on lab and genomic data to route patients to the right treatment faster, cutting the trial-and-error spending that bloats care costs., PhreesiaIt automates check-in, payments, and paperwork at the doctor's office, replacing front-desk overhead and collecting patient payments up front.15%
- Cash10%