OVERVIEWPlease join us for our quarterly Health Care Themes presentation Tuesday January 15th at 10AM ET. We'll be updating and elaborating on our current themes, initiating new ones, and walking through the highlight impacts on our current positions - all within the context of the Macro Quad Four dynamic . We'll also be including some new work from our developing data science effort here at Hedgeye. Dial-in information will be available before the call or contact Sales@Hedgeye.com for access |
US Medical Economy Update | Stocks have been broadly weak alongside indications of slowing global growth as the effects of Quad 4 (as discussed last week by our Macro team) persist. While the weakness has been broad-based, not all Health Care companies are created equal and some are well positioned to outperform.
- Consumption appears to be turning positive after a long #ACATaper hangover recedes
- Wage inflation is set to accelerate for medical professionals and technicians against a backdrop of rising utilization and an extremely tight medical labor market
- Insured medical consumer trends by payor are key to volume, price and margins, but it depends on the provider/vendor
- Capital raising, venture capital trends, NIH funded clinical trials are derivatives and drivers of the health of the market
Health Care Policy | With two years left in his administration, re-election still far from certain given weak approval ratings, the Trump Administration’s policy agenda and reaction thereto will continue at top speed in Q1 2019. Of course, before all that can happen, Congress and President Trump need to re-open that 25 percent of the government that has closed due to lapsed funding.The major regulatory and legislative themes that will dominate the narrative are:
- ACA Constitutionality Challenge – Conventional wisdom suggests it will be over-ruled but Hedgeye’s own court watcher, Paul Glenchur isn’t so sure.
- Drug Prices – The new Congress, a shift in power and a number of high profile challengers to the president, means a lot of a competition to see who can be more aggressive on drug price policy. Meanwhile the Trump administration is pursuing its own agenda of regulatory changes to safe harbor rules, Part D and Part B reimbursement, pharmacy price concessions, among other things. The States aren’t holding back either. Legislation on PBMs, Medicaid reimbursement and even importation are going to be considered.
- Data Privacy and Interoperability – While Facebook and other tech platforms will be the focus of the new Congress, CMS’s efforts to modernize HIPAA are certain to be in the mix, as well as discussions about disclosure of genetic tests results and security of health-related apps and wireless devices.
- Anti-trust – The administration’s report on competition and patient choice that was released on Dec. 26, suggests continued pressure on anti-trust enforcement system, including changes to horizontal AND vertical merger guidelines. Congress is already signaling some bipartisan agreement for change as well.
Data Science | New data science and engineering techniques are building at Hedgeye across screening, factor analysis, and metric forecasting.
- Algorithms that combine public and proprietary data sources, and know-how, for key company metrics
- Factors that are driving performance and stock selection, what happened and what's about
Position Monitor and Company KPIs | With our longs and shorts we've been positioned to best play our Health Care Themes. We'll have updates on key drivers and catalysts with a special focus on where we think the greatest opportunities are ahead.
