Investment firm’s analysts think subpar health-care usage rates may curb growth for health-care companies
BERWYN, Pa.--(BUSINESS WIRE)-- Few people look forward to visiting the doctor’s office, but today’s high unemployment rate, rising health costs, and low consumer confidence are conspiring to make those visits even less popular. According to the latest Sector Focus commentary by Turner Investments, health-care companies may see a period of lackluster growth in the near term, as patients delay receiving health-care services to feel better physically until they feel better financially.
Turner, an investment firm based in Berwyn, Pennsylvania, publishes Sector Focus commentaries monthly as part of the continuing efforts of its five teams of security analysts to monitor market sectors for its growth-stock portfolios.
Titled The New Abnormal: why health-care utilization rates are low, the piece was written by the five Turner analysts who cover the health-care sector: Heather McMeekin, portfolio manager/global security analyst; Vijay Shankaran, senior portfolio manager/global security analyst; Richard Simons, portfolio manager/global security analyst; Frank Sustersic, senior portfolio manager/global security analyst; and Theresa Tran, global security analyst.
As the analysts see it, shaky consumer confidence and job security may be the culprits behind subpar utilization rates, or the rates at which health-care services are used. They note that “patients are putting off doctor’s visits, drug prescriptions, surgeries, and other medical procedures until they perceive that a more stable job market in particular and more stable economic conditions in general prevail.” Until consumers regain their confidence, the analysts expect hospitals, pharmaceutical companies, and medical-device manufacturers to face barriers to growth.
Turner believes three managed-care companies -- Aetna, WellCare Health Plans, and UnitedHealth Group -- could benefit from lower utilization rates by collecting membership fees, mainly from employers, but paying for relatively few procedures for employees.
To read this November 2011 Sector Focus in its entirety, click on this link to the Turner Investments Web site: http://www.turnerinvestments.com/SectorFocus. Or call 484.329.2407 for a free copy of the piece.
The views expressed represent the opinions of Turner Investments and are not intended as a forecast, a guarantee of future results, investment recommendations, or an offer to buy or sell any securities. There can be no guarantee that Turner will select and hold any particular security for its client portfolios. Past performance is no guarantee of future results.
Many health care-related companies are smaller and less seasoned than companies in other sectors. Health care-related companies may also be strongly affected by scientific or technological developments and their products may quickly become obsolete.
Turner Investments, founded in 1990, is an investment firm based in Berwyn, Pennsylvania. As of September 30, 2011, we managed more than $12 billion in stocks in separately managed accounts and mutual funds for institutions and individuals.
As of October 31, 2011, Turner held in client accounts 352,810 shares of Aetna, 756,189 shares of WellCare Health Plans, and 30,240 shares of UnitedHealth Group.
CONTACT:
Turner Investments
Abbi Anderson, 484-329-2407
[email protected]
KEYWORDS: United States North America Pennsylvania
INDUSTRY KEYWORDS: Practice Management Health Hospitals Other Health Professional Services Finance Insurance General Health Managed Care
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