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1Q 2020 Health Care Themes | Recent Research & Policy Updates, Q&A Please join us on Wednesday, January 22, 2020 @ 10 AM ET - Add to Outlook Calendar Participating Dialing Instructions Toll Free: Toll: UK: 0 Confirmation Number: 13697771 Healthcare & Health Policy Subscribers: CLICK HERE for event details (includes video link, materials link and dial-in). |
Key 1Q 2020 Health Care Themes
Health Care Labor Demand
US Medical Economy | Growth trends turned positive September 2018 and have remained solid over 2019. It wasn’t until 3Q19 that we finally saw these trends clearly in earnings and stocks. It helped too that “Medicare for All” fears faded, and the Hedgeye Macro went from Quad 4 into Quad 3. Heading into 2020, the script has flipped. Growth is good, but evidence of acceleration is scant. In rate of change terms, the deceleration hitting the US Medical Economy now will likely materialize in the second half of 2020.
Hedgeye Process
Front Running the Quants | We continue to enhance and refine our methods for finding high probability longs and shorts. The result is a method that integrates the macro and fundamental equity factors in a repeatable and robust process. In our view, it has become increasingly untenable to focus solely on individual stock fundamentals, but from the top down and macro perspective was too blunt a tool to be effective at the level of a single stock or subgroup. Combining the two perspectives has yielded tremendous results that allow us to bridge the gaps from Macro to the Insured Medical Consumer, to the US Medical Economy, and finally to single stocks.
Health Care Policy
Insured Medical Consumer Model | Medicare Advantage growth exceeded forecasts at the HHS Office of the Actuary, with PPO plans being the biggest winners, and suggesting federal policies favoring MA plans over traditional Fee-for-Service are working. Meanwhile, slowing growth in employment mean little upside to employer-based insurance.
Election Politics | The durability of Sanders versus Biden makes for a compelling countervailing narrative against the undeniable rise in health care utilization. Biden’s prospects as nominee should be more clear in Q1.
Price Transparency and Interoperability | From EHR vendors to hospitals to health plans, everyone is trying to stop the Trump administration from filling their moats with interoperability rules and price disclosure. These issues may come to a head in 1Q in court or through final rule-making.
Position Monitor Updates
Guardant Health (GH) | Claims Data Update from 4Q19 Indicates a Beat, but Less Upside Than 3Q19
Invitae (NVTA) | Claims Data Update following 4Q19 Miss; Acquisitions an Area of Focus in 1H 2020
Illumina (ILMN) | Preannouncement agreed with our positive Sequencing Consumable growth outlook based on NIH and genetic testing claims trends
Tenet Healthcare (THC) | Our Forecast Algorithm for Same Store Adjusted Admissions Decelerates in 4Q19
AMN Healthcare (AMN) | Tracker and Subsequent Indicators point to Accelerating Demand
Mednax (MD) | Our Forecast Algorithm for Same Unit Volume Implies 4Q19 Upside
All data available upon request. Please reach out to with any inquiries.
Thomas Tobin
Managing Director
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Emily Evans
Managing Director – Health Policy
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