Healthcare
27 Feb 15
Perhaps the most significant of the current trends in healthcare is the wave of new product innovation, particularly in therapeutics.
Otherwise known as Obamacare, the Affordable Care Act aims to overhaul the US healthcare system by increasing the affordability and quality of health insurance. This will clearly be positive for healthcare utilisation. People naturally demand more health treatment if they are insured versus uninsured.
US hospitals should be well positioned to benefit. As hospitals cannot turn away severely ill uninsured patients, a large portion of the services provided by hospitals are done for little or no cost. There are currently around 87 million people either without or have inadequate medical coverage in the US, representing approximately 28% of the population.
US hospitals actually write off around $40bn of billings as bad debt expense each year, but this should decline and earnings should start to accelerate as the uninsured get cover.
