Below is a chart and brief excerpt from today's Early Look written by Health Care analyst William McMahon.
Since that last update on our 2Q21 Health Care Themes Call, demand recovery has been a common theme throughout the first quarter of 2021 health care earning season. It seems at this point that it is less likely that a client disagrees with us on the existence of pent- up demand, but rather the potential and rate at which it will be unlocked. We understand those concerns, but only need the story to be a little true to be right.
Today’s chart of the day below suggests that while the delivery system may be “back to trend” and capacity constrained, we see +4% to a full return to trend, +3% for utilization, and a multiplier from deferred care that could drive medical consumption well into the double digits as the US Medical Economy re-opens. For Health Care, these are big numbers.
We will be keeping an eye on pent- up demand as well as the resulting return to trend + which we believe will result from it. When we benched several of our long ideas earlier in the year, we saw a gap between emerging pent-up demand and decelerating estimate trends in Health Care. According to our MicroQuad outlook, we expect estimate the momentum to begin improving next month, at the same time we should also be seeing evidence medical utilization is taking off.