How Much Does Healthcare Reform Cost? [View article]
you are right - and as someone mentioned, the CBO score assumes the -21% cut to docs persists - back that out and you get a +$1T costing bill. The cost is higher than purported, the savings will likely be lower than purported. hocus pocus
The Truth About the Health Insurance Industry [View article]
Well said......on average, at a 85% MLR, and 12% admin ratio, HMOs are left with a 3% margin, and that’s before debt and taxes. The industry is profitable, but not to the degree that zealots on Capitol Hill would have you think.
Recession-Proof? The Beauty of Big Pharma Is in the Eye of the Beholder [View article]
what does this have to do with Pharma? Confused. anyways, the # ABC just printed tells that Rx adherence hasnt really fallen off a cliff bc of the macro
UnitedHealth Is Looking Healthy - Barron's [View article]
The stock is definitely cheap, but investors will continue to hit the $HMOs with below-historical multiples (10-20x) as long as the capital markets are distressed - dont forget that these guys invest their premiums! Also, a weaker job market (7.6% UR as of Friday) also puts commercial enrollment in check - what these guys have to do - all managed care companies need to do - is price judiciously, cut custs, and make opportunistic acquisitions while the group remains cheap...
Most Volatile Stocks on Earnings Reports [View article]
Joe Paduda is out on his famous health blog citing CVH as a major takeout target in 2009, in fact, its his #1 prediction. Def will see some vol in this name in 09
short sellers eventually have to go long and cover, so technically they do "invest"...the above poster is a bit light headed today, it seems. without shorts, we'd have more Enrons around - is that what you want?
Scientific Investing with Thermo Fisher Scientific [View article]
I like your pieces b/c they are short and you focus on valuation, but it'd be awesome if you could add a quick paragraph of what the companies do to make money, and why their business is attractive (ie. investment thesis and/or key drivers - why should I pick stock A if stock B does the same thing, etc.) You don't have to take my advice at all; I just think you could round out your articles a bit better : ) - Thanks and keep up good work !
this article is greatly misinformed in that it suggest CVS/Caremark is not under "political scrutiny" and that the PBM business is on "neutral" political ground. Caremark has long been under the regulator's eye and the reform that just passed specifically has stuff in there that puts PBM practices (rebate transparency) under the microscope...
Forbes Speculates on Winners From Healthcare Reform Bill [View article]
the real question on this increased volume should be what is their margin profile versus BEFORE reform. In general, the volumes will come in at lower profits. Some company will pass along fees, others will not. Some will get healthy customers, some will not. Some companies will not see enough of a boost in volumes (maybe the mandate and penalties to small business are not enough) to offset the degradation in margins. As for pharma, the narrowing of the Part D gap also has mixed ramifications, given more adherence, more brand uptake presumably, but at the cost of providing rebates of ~50%....
LHC Group: Home-Based Healthcare Is Good Business [View article]
nice thoughts. agree -- either way, bigger players will benefit from shift in reimbursment cycle and mom/pops will get rolled up. Industry should get more concentrated, you are right.
The Truth About the Health Insurance Industry [View article]
" A major problem for group health care insurers during a declining payroll economy is that younger workers in excellent health choose to self-insure ( take their chances) and not to buy insurance, while those already in bad health or currently collecting more in benefits than they'll every pay in premiums stay insured through COBRA. "
EXCELLENT POINT...adverse selection and member attrition are behind the rate hikes
High Conviction: A Hospital Operator That Benefits From Healthcare Reform [View article]
1) most of the TRI synergies have been captured, so Im not sure the bulls are leaning on this for EPS upside. Whats left? Another 100 bps of margin improvement in your model?
2) Re reform, if the Medicaid volumes do not expand - as proposed in reform that’s on the table – as fast as some of these hospitals lose their DSH payments, that could be a negative issue. I would not say reform is clear cut good for them. Id say net modest positive. They cut a lot of costs and one time things in 2009 to make EPS and those wont be around in F10 (ex: merit increases wash out, 401K changes, lay offs). In other words, admissions will have to be materially better this year for the acute grp to fetch higher multiples. Pricing has been good for the most part. You have a good pt – they are still feeling the recession – THC commercial admissions were weak, and it sold off hard.
** Overall, I agree more with you across the board than I disagree with you, so thanks for writing an article.
How Much Does Healthcare Reform Cost? [View article]
The Truth About the Health Insurance Industry [View article]
Buyer Beware: 30 Biggest Bankruptcy Risks [View article]
30 Stocks Worth Investigating for 2009 [View article]
Recession-Proof? The Beauty of Big Pharma Is in the Eye of the Beholder [View article]
UnitedHealth Is Looking Healthy - Barron's [View article]
Most Volatile Stocks on Earnings Reports [View article]
Some Investment Themes for 2009 [View article]
Scientific Investing with Thermo Fisher Scientific [View article]
Almost Family: Growth at a Reasonable Price [View article]
Two Healthcare Stocks I Like Best [View article]
Forbes Speculates on Winners From Healthcare Reform Bill [View article]
LHC Group: Home-Based Healthcare Is Good Business [View article]
The Truth About the Health Insurance Industry [View article]
A major problem for group health care insurers during a declining payroll economy is that younger workers in excellent health choose to self-insure ( take their chances) and not to buy insurance, while those already in bad health or currently collecting more in benefits than they'll every pay in premiums stay insured through COBRA. "
EXCELLENT POINT...adverse selection and member attrition are behind the rate hikes
High Conviction: A Hospital Operator That Benefits From Healthcare Reform [View article]
2) Re reform, if the Medicaid volumes do not expand - as proposed in reform that’s on the table – as fast as some of these hospitals lose their DSH payments, that could be a negative issue. I would not say reform is clear cut good for them. Id say net modest positive. They cut a lot of costs and one time things in 2009 to make EPS and those wont be around in F10 (ex: merit increases wash out, 401K changes, lay offs). In other words, admissions will have to be materially better this year for the acute grp to fetch higher multiples. Pricing has been good for the most part. You have a good pt – they are still feeling the recession – THC commercial admissions were weak, and it sold off hard.
** Overall, I agree more with you across the board than I disagree with you, so thanks for writing an article.