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A GOP Vision of Health Reform From a Bush (but Not That Bush)

Stocks in this article: ATHN AOL FNMA FMCC AMZN UNH CSLT

Republicans would be irritated by his proposal to have a government-backed financing plan, similar to Fannie Mae (FNMA) or Freddie Mac (FMCC), that would help finance companies pushing new, untested approaches to health insurance and absorb some early losses. Sarah Palin might be offended by Bush's dismissal of her "death panel" argument and his refusal to buy into "tort reform."

But the broad outlines of what Bush wants are similar to the future that former Obama Administration health care guru Ezekiel Emanuel sketched earlier this year in his own book, Reinventing American Health Care. (In a hospital-like cross-subsidy that would make Bush laugh, Amazon.com (AMZN) discounts his book and Emanuel's for customers who buy both.)

Both see a future where price pressures make consumers and employers get smarter. In Emanuel's telling, Obamacare's tax on more-expensive health plans, which takes effect in 2018, will force companies to shop harder for insurance and educate their employees more about their options and financial incentives, pushing them to lower-cost care. In Bush's telling, more-radical deregulation than Emanuel foresees does much the same thing.

Some companies will get hurt in transition while others make fortunes. Hospital utilization will likely fall, pointing to a tricky future for hospital chains like Tenet (THC) and HCA (HCA): They may adjust but with work, because hospitals are the system's highest-cost providers. (Their shares have both beaten the broader market since HCA's 2010 initial public offering).

The emphasis on tools for comparison shopping will help companies like Castlight Health (CSLT) -- Athenahealth was an initial investor and cashed out in Castlight's initial public offering this year -- and may also help UnitedHealth Group (UNH), whose Optum unit is in much the same business.

Naturally, Bush also hopes reform will benefit Athenahealth, already the top-performing electronic medical records stock since 2009.

But true to his libertarian leanings, Bush sees a better reason than money to make the change.

"We need shopping, I believe, not only to fix health care but also -- and I know this may sound strange -- to express our own humanity,'' Bush says. "In my vision, each of us will fashion the health care we want and deserve. We'll express ourselves."

At the time of publication the author had no position in any of the stocks mentioned.

This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.

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