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How the Public Option could help the economy and what companies could thrive

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zulchzulu Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Sep-17-09 06:45 PM
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How the Public Option could help the economy and what companies could thrive
Edited on Thu Sep-17-09 06:47 PM by zulchzulu
I found a great article that shows what companies would benefit from the Public Option. Granted, the article was written a while back, but the analysis is enough proof that the Public Option would make for some new interesting opportunities in the various business sectors that would be involved:

The healthcare reform is likely to provide health-care insurance coverage for some 46 million uninsured Americans (15% of the total population). The reform, in all probability, is likely to expand the revenue basket for providers of medical products and services, including pharmaceutical companies. In addition, this is likely to provide substantial opportunities for life insurers in the US. As a result, life insurance industrys revenue pie is expected to go up from 46.6% of total insurance industry in 2007 to 48% by 2012.


President Obama and congressional Democrats favor changing the program to allow or possibly require direct government negotiations with drug manufacturers, which is expected to sharply lower the program's cost. Another likely money-saving tactic will be greater use of inexpensive generics through new incentives.

These changes are likely to favorably impact companies such as Abbott Laboratories and Johnson&Johnson. These companies seem to be well-positioned in growing pharmaceutical, device, and consumer health-care markets. In the domestic pure play pharma segment, Bristol-Myers and Schering-Plough are likely to be benefited as compared to their peers.


Competition from generic biotech drugs would put pressure on drug pricing, and lower returns that are necessary for firms to recoup investments and to support pharmaceutical and biotechnology innovation.

Genzyme and Celgene could be the winners. Genzyme is likely to achieve its 20% annual earnings growth strategy and invest in new alliances for late-stage clinical assets, and see multiple new drug approvals/label expansions for existing products in 2009. Celgene has the best earnings growth prospects among large-cap industry leaders.


Obama has also stated his support for genetics research and technology advancements, which could benefit companies such as Illumina and Affymetrix.


The largest managed care organizations, such as UnitedHealth Group (UNH) and WellPoint (WLP), have the size and economies of scale to help control medical costs and, therefore, profit more from such a program.

Given Obama's support of e-prescribing, increased generic utilization, and an approval pathway for biogenerics, as well as increased health insurance enrollment, pharmacy benefit managers, including Express Scripts (ESRX) and Medco Health Solutions (MHS) and the large drug distributors, including AmerisourceBergen (ABC), Cardinal Health (CAH), and McKesson (MCK), are poised to increase profitability.


Companies that provide outsourced psychiatric facilities, such as Psychiatric Solutions (PSYS), and outsourced surgery centers, such as AmSurg (AMSG) could be the winners. In addition, long-term acute care hospital and nursing home providers that provide services at significantly lower costs than acute care facilities, such as Kindred Healthcare and Sun Healthcare Group are likely to be the winners.


Hartford-based Aetna had 366,000 Medicare members at the end of December. UnitedHealth served nearly 1.5 million, and Humana, 1.4 million. Even Aetna and UnitedHealth could gain in the long run through efficiency gains (IT implementation).

Full article:


The reason I'm showing what essentially is a stock tip sheet analysis is to get the message out that the Public Option would not only be the correct thing to do, but if you are an investor or want to show these stock tips to a leery Republican, they might see that there are opportunities for the economy to get better DUE TO THE PUBLIC OPTION!

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zulchzulu Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Sep-17-09 11:17 PM
Response to Original message
1. Did...
... I freak people out?

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DrToast Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Sep-17-09 11:21 PM
Response to Reply #1
2. That article isn't about the public option
In fact, the article plays up how it will be a boon for insurance companies.
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