Though he's months from taking office, investors are already considering what effect President-elect Barack Obama could have on the healthcare industry. According to at least one analyst firm, his plan to bring healthcare to more uninsured Americans could have a strongly beneficial effect on several sectors, including hospitals, medical centers and hospital equipment makers.
Moody's Investors Service is estimating that the annual cost of the Obama plan could be around $100 billion to $200 billion, which would be added to existing government spending of about $800 billion. This influx could positively affect the top-line growth of many providers, Moody's says.
Improvements in these sectors' financial positions would come not only through more provider reimbursements, but also through cost savings arising from having patients go to primary care doctors rather than costly emergency departments, freeing capacity within hospitals. Think of it as a ripple effect.
However, there are a few downsides to Obama's proposals as well, Moody's said. The plan's demand that providers coordinate care better through improved health IT, not to mention the fact that rules tying payments for Medicare, could be pricey. Also, hospitals in particular could find that insurers bargain harder, as the plans Obama proposes would give them tighter margins, the research firm notes.
To learn more about the report:
- read this Yahoo News piece