We present to you the final installment of our videos from last week’s Best Ideas call that Hedgeye held for its institutional subscribers. Healthcare Sector Head Tom Tobin is looking to short UnitedHealth Group (UNH) for multiple reasons that include:
-Utilization has been negative: cost trend has been negative for the last 3 years. While some medical spending is discretionary, underlying demand is unlikely to remain negative for long.
-Costs are likely to accelerate: Our forecast of physician office visits and maternity suggest a recovery is ongoing.
-Affordable Care Act creates problems: The Affordable Care Act creates a host of market uncertanties and has a high probability of being disruptive to the health insurance market.
Watch the video we’ve posted for Tobin’s full rundown on UNH.