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POLICY/HEALTH PLANS/HOSPITALS/PHARMA: Wall Street roundtable on the industry

(Note: somehow this was written and not published 10 weeks ago in early September…showing both that I’m fallible and that not that much has changed in 10 weeks, apart from a little minor politicking. Given that Friday is the lighest traffic day on TCHB, I figure I can get way with posting it now!)

HSC is out with its newest issue brief and this one is a summary discussion of several Wall Street analyst types about the health care industry. It’s a very intesting piece. Here are a few key nuggets (or the “shorter” version in blog terms):

  1. Health plans are pricing high to avoid a repeat of letting trend get away from them as happned in 1997-9. Employers apparently are back to being cranky, confused, aimless and spineless, but are pushing costs onto consumers. Trend is slowing which will eventually put downward pressure on premiums.
  2. Medicare regional PPOs are a non-starter, but there’ll be money made in Medicare HMOs on a county by county basis until Congress wises up and cuts back on HMO payments (i.e. we’ll revisit the 1992-1997 cycle)
  3. CDHPs are massively overhyped.
  4. Hospital spending isn’t going up as fast as predicted just a couple of years ago and the rapid pace of physicial plan expansion could lead to overcapcity and bad news for hospital pricing

There’s also a transcript of the whole discussion. I don’t agree with everything they say (and Wall Street analysts are often as wrong as Internet health pundits albeit at a much higher salary) but it’s well worth reading as a view on what several smart people who watch the numbers of the industry very closely see coming down the pike.

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