Obama Election: Winners and Losers in Healthcare
The pharmaceuticals and health insurance industries might want to take a Xanax. They’re likely to be losers in president-elect Barack Obama’s plan to overhaul healthcare in the U.S., according to a post-election report by Moody’s Investors Service.
Healthcare providers, hospitals and medical devices manufacturers could be winners because more customers would be covered by insurance and thus would seek more medical services. Moody’s estimates the cost of the Obama plan will be between $100 billion and $200 billion.
Hospitals in particular could benefit because more people who go to emergency rooms will be insured which in turn may result in positive trends with respect to uncompensated care. Nonetheless..they would face added risk of tougher reimbursement negotiations with insurers who may be pressured by the Obama plan.
But Obama’s promises on healthcare are about to collide with the reality of a federal budget already stretched to the limit, writes Jeff Goldsmith of HealthFutures Inc, on the blog of policy journal Health Affairs.
Goldsmith lays out three possible scenarios for the Obama administration, from pushing his healthcare plan right away as part of a package of emergency measures to boost the economy, to postponing the plan until U.S. economic and fiscal conditions improve.
Moody’s, too, notes that the declining economy and the size of the federal budget deficit may make it difficult to pass far-reaching healthcare reform.
For details, see U.S. Healthcare Industry: Credit Implications of the U.S. Election.
In a separate report, Moody’s today downgraded the not-for-profit healthcare sector to negative from stable.
We anticipate that the recent election of President-elect Obama will likely have mixed effects — positive and negative — on the hospital sector, but the fundamental credit conditions in the sector are pointing in a negative direction as described in this outlook.
Meanwhile, a survey by Deloitte finds that eight out of 10 Americans fear that the current financial crisis will affect their ability to pay their medical bills.
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