Healthcare Market Scared

I found this Wall Street Journal article very interesting:

The Affordable Care Act has been so good to health-care stocks that even a small possibility of change should cause concern.

The sector again sold off sharply Monday in the wake of a federal judge’s ruling last weekthat the law known as Obamacare is unconstitutional. Shares of hospital operator Tenet Healthcare and Medicaid-focused insurer Molina Healthcare both slid, for example. Including Friday’s losses, those two were off by 13% and 20%, respectively, by midday Monday.

The investing risks the ruling introduces are hypothetical but potentially severe. The law is still in place for now, so the ruling won’t directly impact the sector’s business operations and it could be years before all appeals are heard. This isn’t the first time that this politically charged law has faced a challenge.

Those caveats aside, the financial threat is real if the ruling sticks. By expanding access to health insurance via state exchanges for individual policies and a major expansion of Medicaid eligibility, Obamacare created millions of new customers. The result is an ideal environment in which to sell insurance, hospital beds, medical devices or pricey new prescription drugs.

There is a real chance that this environment evaporates and the downside could be significant. A broad index of health-care stocks has nearly tripled since the law passed in 2010. Whatever policy framework replaces it would likely reduce access to health insurance, creating a ripple effect on consumption.

Health care has been the strongest performer in the S&P 500 this year, living up to its reputation as a haven during uncertain times.

Losing that port in the storm could cause health problems up and down Wall Street.

So, here is the part people should focus on:

Those caveats aside, the financial threat is real if the ruling sticks. By expanding access to health insurance via state exchanges for individual policies and a major expansion of Medicaid eligibility, Obamacare created millions of new customers. The result is an ideal environment in which to sell insurance, hospital beds, medical devices or pricey new prescription drugs.

It was an ideal environment NOT for patients but for insurers, hospitals, drug and device makers! This article was from the business section that gives advice to investors. Now you know that the ACA was for these industries mostly. They reaped the rewards of increased profits and share price. As for patients, some benefitted but many got destroyed by this crappy law.

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Douglas Farrago MD

Douglas Farrago MD is a full-time practicing family doc in Forest, Va. He started Forest Direct Primary Care where he takes no insurance and bills patients a monthly fee. He is board certified in the specialty of Family Practice. He is the inventor of a product called the Knee Saver which is currently in the Baseball Hall of Fame. The Knee Saver and its knock-offs are worn by many major league baseball catchers. He is also the inventor of the CryoHelmet used by athletes for head injuries as well as migraine sufferers. Dr. Farrago is the author of four books, two of which are the top two most popular DPC books. From 2001 – 2011, Dr. Farrago was the editor and creator of the Placebo Journal which ran for 10 full years. Described as the Mad Magazine for doctors, he and the Placebo Journal were featured in the Washington Post, US News and World Report, the AP, and the NY Times. Dr. Farrago is also the editor of the blog Authentic Medicine which was born out of concern about where the direction of healthcare is heading and the belief that the wrong people are in charge. This blog has been going daily for more than 15 years Article about Dr. Farrago in Doximity Email Dr. Farrago – [email protected] 

  4 comments for “Healthcare Market Scared

  1. JRDO
    December 22, 2018 at 5:04 pm

    People on Obamacare are have their healthcare costs subszidised by the government, not by the premiums paid by citizens and employers directly to the private insurers. There is certainly aspects of the ACA I find troublesome, but the increase of premiums, deductables and co-payments by private insurers was pure greed by the private insurance companies and hospitals. One of the great scams is the private insurance companies’ and hospitals successful scapegoating the ACA as a reason to increase prices- they are laughing all the way to the bank.

  2. Cliff Norman
    December 22, 2018 at 10:52 am

    Including the word “Market” was a curious choice of words. To have a market, the consumer (patient) must be able to work this relationship to determine “value.” Value = Quality/Price. I am talking about actual care, not insurance. It is next to impossible to get a price on anything, not even the delivery of a baby, an ancient procedure. When Singapore posted prices, they went down over 50% in a short amount of time. We don’t have a market in Health Care, we have crony capitalism on steroids.

  3. Mario
    December 22, 2018 at 7:46 am

    IMHO, ACA had nothing to do with patient care. It was purely a political (Marxist) ploy. Why is that so hard to understand? Whatever superficial gains the healthcare industry made is temporary until the redistribution of wealth runs out of other people’s money. Comrade Barry, you …”could of been contender…”, but blew it on a failed ideology of your parents and upbringing.

    • rsw
      December 22, 2018 at 3:01 pm

      The ACA, which funnels uncountable trillions of government and private dollars into the coffers of unregulated for-profit insurers and their share-holders, is Marxist? Give me a break.

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