Health Care Set for Shake-Ups
Sweeping health care reform -- a major goal of the new Democratic-controlled Congress -- could bring relief to hospital companies but hurt managed care giants.
Big companies in both groups could attract buyers looking to capitalize on looming changes in the meantime.
In recent years, hospital companies like giant HCA have suffered dearly as a result of mounting bad debts from the uninsured. In contrast, managed care players such as UnitedHealth (UNH) have capitalized on opportunities created by the same uninsured crisis. Specifically, they have rolled out consumer-driven health plans aimed at providing affordable -- if limited -- health care coverage to those who cannot pay for richer, more traditional benefits.
Hospitals have seen their unpaid bills, worsened by high deductibles and co-payments, keep climbing as a result. Meanwhile, health insurers have flourished with help from explosive growth in their consumer-driven offerings.Now, however, top Democrats have started calling for new programs that promise fuller health care coverage for all Americans. They are pushing for rich benefits rather than the skinnier packages favored by Republicans and heavily promoted by major health insurers. That kind of coverage would be good for hospitals and bad for consumer-oriented HMOs. Still, most experts foresee more routine developments in 2007 -- such as ongoing industry consolidation -- before revolutionary changes can take place.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV