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Takeaway: No changes to the position monitor July 1, 2019

Position Monitor | DXCM TAM (smaller!), Trump Transparency, ACA legal, when GDP slows do this - 2019.06.24 Position Monitor Note

Overview

We covered our weekly Position Monitor in a webcast earlier today and took questions. Click here to watch the video replay where we covered the items below.

DXCM | Reimbursement environment for G6 and G7 does not support larger TAM and we remain short.  This includes Medicare reimbursement which includes on T2 insulin intensive patients along with T1 diabetics.  The path to broader availability runs through a substantial regulatory change, or legislation.  Our review of available data showing the additional outcomes benefits of CGM, which would be critical to expanding use to a broader population, appears to trend positive in markers such as HbA1C, but we are still searching for the key study.  We suspect the real-world may present challenges.

HCA, THC | Last week, the Executive Order (EO) on price transparency announced by President Trump appears accretive to for-profit providers who generally have greater cost controls and offer better prices in their markets.  Price transparency policy proposals included in the EO have near term deadlines, making this White House effort worth watching which is likely to impact both provider and payor pricing practices.

UNH, ANTM | The ACA Constitutionality challenge is teed up with oral arguments next week and judges expressing interest in standing of House of Representatives and AGs to appeal.  We weight the positives and negatives.

Macro | Sector and Sentiment, what works and what doesn’t in Quad 3 and Quad 4, or what to do when GDP slows.  The broader economy seems very likely to slow heading into 2H19. We've begun taking a closer look at individual factors such as sellside rating, short interest, revision trends to subdivide Health Care stocks into bins to better select our long and short exposure.

(Link for an uncooperative browser: https://app.hedgeye.com/feed_items/76243)