David R. Kotok, August 4, 2024

(The following was first published on Cumberland Advisors’ website and via LISTSERV. For details, visit https://www.cumber.com/.)

I’ve written previously about healthcare and how it is about 18% of the total US GDP. For specific portfolio questions, go to Matt McAleer or John Mousseau or email me.
 
The rest of this missive is my opinion only. All errors are mine alone.
 
Here are two links for background:
 
“The Healthcare Sector,” July 11, 2024, https://www.cumber.com/market-commentary/healthcare-sector-0
“Healthcare Sector,” Oct. 18, 2023, https://www.cumber.com/market-commentary/healthcare-sector
 
Now that it is out in the open and with the publication of Project 2025 ( https://www.project2025.org/policy/), we now can examine what the 2025 roadmap says about our healthcare. Pls note that Trump has been trying hard to distance himself from 2025. It continues to damage his political prospects, IMO. The Heritage Foundation leadership official on Project 2025 has advised his staff he will “step down.” How Trump gets away from this 2025 albatross will be interesting to watch since so many parts of it were drafted by his former administration appointments and colleagues. Politics at work for readers to determine for themselves.

https://www.project2025.org/policy

I can see why Trump is running away from Project 2025 healthcare proposals. IMO, 2025 is the most distortive and destructive plan I have seen when it comes to healthcare. IMO, the Heritage Foundation has moved from a conservative policy think tank to a radicalized extremist groupthink cell. I believe that their proposal could uproot the national healthcare system of the United States. Heritage Foundation’s Project 2025 wants to return healthcare governance to the 50 states. You will see this frequently repeated in the document.
 
I invite readers to take the time to read the entire healthcare section, starting on page 449. I have read all of it. I intend to write more about 2025 in future missives since it impacts our markets, investment future, and our personal lives.
 
Here’s an excerpt from the opening preamble on page 449: “U.S. life expectancy, instead of returning to normal after the COVID-19 pandemic, continued to drop precipitously to levels not seen since 1996 with white populations alone losing 7 percent of their expected life span in just one year.³” The number 3 in the quote links to a footnote that supports the assertions about life expectancy. (When I examined Project 2025, I researched the footnotes, too.) Here’s the USA Today report linked to footnote 3: “Americans’ life expectancy continues to fall, erasing health gains of the last quarter century,” https://www.usatoday.com/story/news/health/2022/12/22/us-life-expectancy-continues-fall-erasing-25-years-health-gains/10937418002/.
 
If you read the preamble and the recited reasoning of Project 2025 on healthcare and then you read the footnoted reference on life expectancy, you can decide for yourself if Project 2025 is accurate or if it is disingenuous and you can decide if it as a purely radicalized political statement or if it is truly focused on policy outcomes and on how to protect the health of the citizens of the United States. Note that the USA Today report never mentions Trump or Biden; it simply reports the numbers. Also note that in my referenced writings on this subject there are multiple citations of the “how” and “why” of the life expectancy decline. And Project 2025 is silent on the subsequent recovery of life expectancy as we proceed in the post-pandemic and now endemic Covid period.
 
The Project 2025 healthcare narrative ignores the decline of life expectancy during the Trump administration, and it blames the entirety of the decline in life expectancy on the Biden administration. It is silent about Long Covid which, as I have written, impacts millions of Americans. And it would dismember or eliminate governmental and quasigovernmental organizations in the US that are actively confronting the healthcare threats to Americans. Not just for Covid but for all of them.
 
Here’s an example.
 
(Page 462) “The CDC and NIH Foundations, whose boards are populated with pharmaceutical company executives, need to be decommissioned. Private donations to these foundations – a majority of them from pharmaceutical companies – should not be permitted to influence government decisions about research funding or public health policy.”
 
Readers can examine the full Department of Health and Human Services chapter (https://static.project2025.org/2025_MandateForLeadership_CHAPTER-14.pdf) in Project 2025 and see how the healthcare trajectory of the United States would be redirected. IMO, it is a frightening trajectory.
 
You can find the information about the boards and activity of the two foundations at these links. Here’s NIH Foundation: https://fnih.org/. The Foundation for the National Institutes of Health (FNIH) is a not-for-profit, 501(c)(3) charitable organization established by the US Congress in 1990. Here’s CDC foundation: https://www.cdcfoundation.org/. Established by Congress, the CDC Foundation is an independent, 501(c)(3) public charity.
 
Why did Congress form these two charitable organizations? Project 2025 is silent. Project 2025 doesn’t explain that these are funded charitable organizations and that they are not taxpayer funded.
 
Here’s why they were created. Dealing with health issues was determined by Congress to be fraught with risk when it was political. And it was fraught with risk when it was fragmented and left to the 50 individual states and their 50 versions of local politics. Reason: illnesses and epidemics don’t have state line boundaries. Pathogens don’t vote; they just infect, sicken, or kill.
 
In addition, Congress (Democrats and Republicans) realized, too, that when there was an emergency, the appropriations process was too slow. The need for a practical, necessary, and timely response is not considered in Project 2025 which has taken an extremist position. IMO, 2025 wants to send national healthcare for Americans into a reverse downward spiral after more than 35 years of improving and positive results. Just ask yourself if you would like the medical treatments from 35 years ago or the ones from today. I did. I am alive because of those newer results. Many people I know are alive because of those newer results. And we can all point to failures whenever politics got involved with healthcare. IMO, people are dead because of politics in healthcare. People are sick or permanently disabled because of politics replacing policy in healthcare. You can figure out what that means for you and me if Project 2025 becomes a reality for our healthcare.
 
Lastly, a personal disclosure. I am a philanthropic supporter of the CDC Foundation which is directly attacked by Project 2025. And I know of the work done on very short notice on such epidemic and pandemic risks like Zika and Ebola and Covid. Note please, I am not a pharmaceutical company, and I don’t work for a pharmaceutical company.
 
Readers may wish to review the pamphlet I wrote about Zika, which includes details about how partisan politics set back Zika research at a crucial juncture for over a year. Just ask the family who suffered the birth of a microcephalic child due to Zika how they feel about politics and healthcare. Here’s a link to the story about my support of the CDC foundation: “David Kotok: Champion of Public Health through Philanthropy and Ethical Leadership,” https://www.cdcfoundation.org/stories/david-kotok-champion-public-health-through-philanthropy-and-ethical-leadership .
 
America has enjoyed huge successes in healthcare, which it derives from the 18% of the national GDP devoted to the sector. Those successes require endless, open, scientifically based, and national (not state specific) discussion and expertise, trials, grants, etc. My second-generation leukemia treatment drug is one of those successes. So is a drug-coated stent.
 
IMO, it would be a national tragedy to uproot and destroy our national healthcare system through the highly radicalized political meddling being offered by Project 2025 and the Heritage Foundation.
 
Here is a link to my Zika pamphlet:  https://www.cumber.com/sites/default/files/2021-08/Zika-Pamphlet-by-David-R-Kotok.pdf

Here’s a diverse but instructive reading list about healthcare.
 
“Healthcare workers are in demand – and the industry can’t get enough of them,” https://finance.yahoo.com/news/healthcare-workers-are-in-demand–and-the-industry-cant-get-enough-of-them-193133785.html
 
“Health Workforce Projections,” https://bhw.hrsa.gov/data-research/projecting-health-workforce-supply-demand
 
“The ‘Trump trade’ has divided health-care stocks into two camps. How to play the next moves was discussed by CNBC,” https://www.cnbc.com/2024/07/19/the-trump-trade-has-divided-health-care-stocks-into-two-camps-how-to-play-the-next-moves.html (CNBC Pro subscriber paywall).
 
“Spillover of highly pathogenic avian influenza H5N1 virus to dairy cattle,” https://www.nature.com/articles/s41586-024-07849-4
 
“COVID-19 Can Increase During Any Season of the Year,” https://m.emailupdates.cdc.gov/rest/head/mirrorPage/@eFH_vdM.html
 
“Postacute Sequelae of SARS-CoV-2 Infection in the Pre-Delta, Delta, and Omicron Eras,” https://www.nejm.org/doi/full/10.1056/NEJMoa2403211
 
“Hundreds of millions of life years lost to Covid pandemic: WHO,” https://www.deccanherald.com/world/hundreds-of-millions-of-life-years-lost-to-covid-pandemic-who-1220128.html
 
“Biden Has COVID. And Data From the CDC Suggests He’s Far From the Only One,” https://www.usnews.com/news/health-news/articles/2024-07-18/biden-tests-positive-for-covid-19-as-virus-activity-level-is-high-in-u-s
 
“Vaccines Significantly Reduce the Risk of Long Covid, Study Finds,” https://www.nytimes.com/2024/07/17/health/long-covid-vaccines.html
 
“Picking the Optimal Variant to Target in Updated COVID-19 Vaccines Is Tricky,” https://jamanetwork.com/journals/jama/fullarticle/2821220
 
“Progression From Presymptomatic to Clinical Type 1 Diabetes After COVID-19 Infection,” https://jamanetwork.com/journals/jama/article-abstract/2821151
 
“Unsafe Ozempic Knockoffs Are Flooding the Market,” https://www.bloomberg.com/news/articles/2024-07-22/ozempic-wegovy-knockoffs-for-weight-loss-are-flooding-market
 
“RFK Jr. floated a job in a Trump White House as he weighed endorsing Trump,” https://www.washingtonpost.com/politics/2024/07/22/rfk-jr-floated-job-trump-white-house-he-weighed-endorsing-trump/
 
“Vaccines Did Not Cause Rachel’s Autism,” https://x.com/peterhotez/status/1815759920177824042
 
“Pharmacy Benefit Managers: The Powerful Middlemen Inflating Drug Costs and Squeezing Main Street Pharmacies,” https://www.ftc.gov/reports/pharmacy-benefit-managers-report