4 Ways To Outsmart Healthcare Inflation: Jim Cramer’s Playbook for 2025

Healthcare costs are soaring to record levels in 2025, with inflation hitting an 8% annual rate for group plans—the highest in over a decade. But here’s the twist: This isn’t just a crisis—it’s a goldmine for investors who know where to dig. Let’s break down four actionable strategies to profit from this inflationary storm.

1. Buy Biosimilar Manufacturers—They’re the New Deflation Warriors

The rise of biosimilars like Humira’s cheaper alternatives is the single biggest deflator in this inflationary mess. These generics are slashing prices by up to 30% and outcompeting expensive biologics. The result? Health plans are loving them, and so should you.

Stock Spotlight:
- Amgen (AMGN): A leader in biosimilars, with a pipeline that could disrupt $10B+ brands.
- Pfizer (PFE): Leveraging its scale to dominate the market.

Why Now?
The biosimilar market is set to grow 15% annually through 2028. With CMS pushing transparency and cost-cutting, this sector is a no-brainer.

2. Back Ambulatory Care and Home Health—The Shift to Convenience Pays Off

Patients are fleeing expensive hospitals for cheaper, convenient alternatives. Ambulatory surgery centers and home health providers are booming, driven by site-of-care shifts and post-pandemic demand.

Stock Spotlight:
- TeamHealth (TMH): A leader in physician-led integrated care.
- LHC Group (LHCG): Dominating home health and hospice.

The Numbers Don’t Lie
This sector is growing at an 8% CAGR, with non-acute care now accounting for 40% of all procedures. Investors who ignored this shift in 2020 missed out—don’t make the same mistake now.

3. Bet on Healthcare Tech and AI—The Future Is Automation

Healthcare’s inflation headache is pushing providers and insurers to adopt AI-driven tools. GenAI is cutting administrative costs, improving diagnostics, and managing complex drug regimens. The IRA’s drug caps and CMS’s price transparency rules are accelerating this trend.

Stock Spotlight:
- Cerner (CERN): A healthcare IT giant with AI-driven analytics.
- Teladoc Health (TDOC): Leading the shift to virtual care.

The Bottom Line
Healthcare software and data analytics are on track for an $800B industry by 2028, with AI alone saving providers $50B annually. This isn’t just tech—it’s the oxygen of survival in this inflationary race.

4. Go Long on Managed Care—But with a Twist

Managed care stocks like UnitedHealth (UNH) and Centene (CNC) are caught in a squeeze: rising costs from Medicaid’s sicker populations and Medicare’s drug caps are eating margins. But here’s the play: Focus on companies that can balance affordability with innovation.

Stock Spotlight:
- UnitedHealth (UNH): Despite margin pressures, its scale and data analytics give it an edge.
- Owens & Minor (OMI): A supply chain specialist leveraging automation.

The Catch
The IRA’s $2,000 drug cap is a double-edged sword—it helps members but hurts MA plans. Look for companies with strong cost-management strategies and exposure to high-growth markets like telehealth or biosimilars.

Conclusion: Inflation’s a Bear, but These Plays Are the Honey

The 2025 healthcare landscape is a rollercoaster of inflation (8% in group plans!) and deflation (biosimilars saving billions). The winners will be those who bet on cost-cutting tech, convenient care, and innovation-driven deflation.

The data is clear: Biosimilars are growing at 15% annually, ambulatory care at 8%, and healthcare tech at 8%—all outpacing inflation. Meanwhile, CMS’s price transparency and the IRA’s drug caps are reshaping the industry, rewarding agility and foresight.

Investors who ignore this are playing with house money. Grab these four plays now—before the next wave hits.

Final Call: This isn’t just about surviving inflation—it’s about thriving in it. The playbook is clear. Are you ready to roll?