Category Archive for "Healthcare"

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Why HMOs are Cheap, Despite Rising Utilization

Utilization rises as the economy strengthens; with economic strength comes rising employment. For commercial HMOs, the question is whether the benefits of employment growth (which brings enrollment growth, sales growth, operating leverage, and improving underwriting risks at the margin) can

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SSR Index of Current-Quarter Healthcare Services Demand Estimates Growth within 50bps, Before Earnings are Reported

‘Unit demand’ for US healthcare ties closely to underlying economic measures, including but not limited to rates of employment. A critical mass of these measures is available during or immediately after a given quarter; using these we model current-quarter unit

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April “Employment Situation” Report Mixed on Healthcare Hours. A Flu Effect?

The Bureau of Labor Statistics on Friday published the April 2012 Employment Situation report, which includes payrolls and hours worked at the industry level through March 2012. While aggregate healthcare hours, and medical / surgical hospital hours were slightly up

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Is There a Cyclical Rebound in US Healthcare Demand? Evidence to Date from 1Q12 Results

The link between quarterly reports and underlying healthcare demand is remarkably noisy and signals from 1Q12 results thus far are mixed; however on net we see convincing evidence of strengthening US healthcare demand   With a single exception (HUM) commercial

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Healthcare Demand is (Cyclically) Improving Ahead of Estimates and Share Prices; Something Has to Give

Estimates for healthcare stocks appear too low in light of improving healthcare demand; this is especially true for healthcare sub-sectors that are highly geared to changes in patient volumes (our favorites being Non-Rx Consumables, Hospitals, and HMOs) Over the past

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Latest BLS Aggregate Hours Data Continue to Support Pro-Cyclical Thesis

The Bureau of Labor Statistics on Friday published the March 2012 Employment Situation report, which includes payrolls and hours worked at the industry level through February 2012. With the exception of general med / surg hospitals, aggregate healthcare work hours

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Why Losing the Individual Mandate is Good for HMOs, and other Earnings Consequences of Various Supreme Court Outcomes

We expect the Supreme Court to rule on the Affordable Care Act (ACA) this June/July (i.e. to find the Anti-Injunction Act does not apply), and to let the Medicaid expansion stand (driving a 13 percent gain in Medicaid spending, &

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Accelerating Growth in Hospitals’, Physicians’ Offices and Other Care Settings’ Labor Hours Signals Improving Healthcare Demand

Reported earnings are a surprisingly weak indicator of near-term changes in healthcare demand; the dominant settings of care (hospitals, physicians’ offices) are vastly under-sampled   In contrast, monthly aggregate labor hours offer a timely and broad-based sample of activity in

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Large Cap Pharma’s Dependence on US List Price Growth is Unsustainable

List price increases account for 48% of real US pharma sales growth since 1980, and roughly ½ of global returns to R&D spending since 1990. More recently eroding mix has compounded reliance on real pricing, which drove 145% of real

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The Pro-Cyclical US Healthcare Thesis – Impact of ROW Economic Risks

US healthcare demand growth is slow for cyclical reasons; this implies an acceleration of US healthcare demand as the broader economy improves; we recommend hospitals (e.g. HCA, UHS, THC), HMOs (e.g. UNH, WLP), and non-Rx consumables (e.g. BAX, BDX, COV)

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