Drugmakers, insurers and hospitals expected to see gains from health bill

Mar 24 2010

Kaiser Health News: "Most health industry sectors are winners - some bigger than others -- under sweeping health care legislation that will expand coverage to 32 million uninsured Americans over the next decade, analysts say." Hospitals and drug makers are both winners; insurers could go either way, depending on long-term cost trends; and, doctors "got a pass," according to one expert (Galewitz, 3/22).

Bloomberg/Businessweek: "Drugmakers, who took part early in negotiations with the Senate Finance Committee and the White House, may have the most to gain. ... For health insurers, the potential increase in customers will be tempered by subsidy cuts for custom Medicare Advantage plans offered to the elderly, and the prospect of new regulations. ... Biotechnology companies, a group led by Amgen Inc., based in Thousand Oaks, California, won 12 years of protection from generic medicines derived from proteins ... Hospitals will have more paying customers and less bad debt as a result. ... Makers of medical devices, Medtronic Inc. of Minneapolis among them, are likely to benefit the least" (Tirrell, 3/22).

The Boston Globe: "The broad stock market registered a small gain the day after the US House approved sweeping legislation to reshape the nation's health care system. Most of the stock benchmarks that track individual sectors within the health care industry were also modestly higher, as were companies in key medical businesses. ... most stock analysts agreed the market's tempered reaction showed investors had taken political developments in stride and continued to follow many different issues, especially prospects for a continued economic recovery in the near term" (Syre, 3/23).

The Associated Press: "Last summer, [drug, hospital and insurance company] executives visited the White House and pledged to do their part to help pay for the health bill. By signing onto the effort early and agreeing to absorb some of the costs, they were able to help shape its final form. Only time will tell how smart that trade-off was for the industries, but a quick look at the bill passed by the House late Sunday shows it was far from their worst-case scenario: A government-run health care plan that would compete against private insurers? Never made it out of the Senate; Price controls on Medicare's prescription-drug program that would squeeze drug-industry profits? Quietly dropped from consideration last fall; Cuts in payments to hospitals serving Medicare patients? Trimmed to modest levels and delayed until 2014" (Perrone, 3/23).

Roll Call reports: "They may not be popping the corks on the Champagne bottles yet, but a number of medical stakeholders are cheering the health care package that could sweeten their bottom lines and bolster their political clout on Capitol Hill. The brand-name drug companies, hospitals, doctors and senior citizens group AARP were all early supporters of the Democrats' effort to overhaul the health care system. As a result, the Democratic leadership sought to protect these key interests in the final package approved by the House" (Roth, 3/23).

The Hartford Courant: "Health insurers on Monday were generally quiet about the health reform bill President Obama is expected to sign today, but industry groups warned that premiums will rise and the chief executive of CIGNA Corp. said the sweeping measure does nothing to rein in medical costs. David Cordani, the CIGNA CEO, said the reform will increase the price of health insurance for several reasons. The bill adds $70 billion in taxes on insurers which will be passed along to consumers" (Sturdevant, 3/23).