healthcare webinar slides-10-28-2015

Healthcare Hijinks28 October 2015

War Room

HiddenLevers War Room

Open Q + A

Macro Coaching

Archived webinars

CE Credit

Idea Generation

Presentation deck

Product UpdatesScenario Updates

Market Update

ObamACAre in Review

US Healthcare Sector

Scenario: US Healthcare Costs

Healthcare Hijinks

HiddenLevers

MARKET UPDATE

IPO MarketDangerous Waters

Market Update

sources: HiddenLevers

1

Oil Rally Head Fake

China Rate Cut + ECB QE Best Oktoberfest Ever

2

3

Budget Deal – Debt Ceiling tabled until 20174

sources: HiddenLevers, NY Times

Cuts for Medicare providers

Cuts for SS

Disability

Medicare premiums NOT rising

debt ceiling won’t impact

election

total spending up

1%

http://www.nytimes.com/2015/10/27/us/politics/congress-and-white-house-near-deal-on-budget.html?_r=0

2011 US Debt Downgrade: First HL Success

Research+

Model Accuracy

+Functionality

HiddenLevers

OBAMACARE IN REVIEW

TREND: Healthcare Inflation vs CPI


CPI > Healthcare Inflation-4 times in the last decade-4 times in the 5 decades prior-Overall, gap is narrowing

CPI above Healthcare

Inflation 1957-’05

CPI above Healthcare

Inflation 2005-’15

http://www.hiddenlevers.com/hl/u?1MTIfYu

TREND: Insurance Premiums

sources: Kaiser Family Foundation, Academy Health

-Premium growth unchanged by Obamacare-Third Party Payers are the real culprit-Costs passed to individual as higher deductibles

Worker Contributions for Employer-Sponsored Family Health Plans, 1999-2015

http://kff.org/interactive/premiums-and-worker-contributions/

http://blog.academyhealth.org/employer-sponsored-health-insurance-an-annual-update/

OBAMACARE: Report CardSUCCESS FAIL

35% drop in US uninsured rate

Medicare cuts sticking

Supreme Court upholds ACA key tenets

sources: Fox News, The Hill, Health Affairs, Gallup, Families USA, CBO.gov, RAND

2015: 16.9M enrolled, below 20M estimate

Canceled policies + premium shocks

Incomplete Medicaid rollout–20 states left

http://www.foxnews.com/politics/2015/06/25/supreme-court-upholds-obamacare-subsidies/

http://thehill.com/policy/healthcare/overnights/213855-overnight-healthcare-gao-report-blasts-healthcaregov-rollout

http://healthaffairs.org/blog/2014/03/03/how-many-nongroup-policies-were-canceled-estimates-from-december-2013/

http://www.gallup.com/poll/184064/uninsured-rate-second-quarter.aspx

http://familiesusa.org/product/50-state-look-medicaid-expansion

http://www.cbo.gov/sites/default/files/cbofiles/attachments/45010-breakout-AppendixB.pdf

http://www.rand.org/pubs/external_publications/EP50692.html

OBAMACARE: Candidate Platforms

sources: HiddenLevers, Time, NY Times, Politico, NPR

Hillary Clinton

REPEALOBAMACARE

RETURN TO PRE-ACA LESSEZ FAIRE HEALTHCARE

Bernie Sanders

Ben Carson

MarcoRubio

Jeb Bush

REPEALOBAMACARE

HEALTH INSURANCE TAX CREDITS

ATTACK BIG PHARMA TO LOWER DRUG COSTS

FINISH WHERE OBAMA LEFT OFF

CREATE BONAFIDE SINGLE PAYER SYSTEM

LOOK TO CANADA FOR GUIDANCE

REPEAL OBAMACARE

CREATE PRIVATEHEALTHCARE ACCOUNTS

http://time.com/4043242/hillary-clinton-bernie-sanders-health-care/

http://mobile.nytimes.com/2015/10/28/upshot/ben-carsons-health-care-plan-new-and-more-confusing.html?referer=https://www.google.com/

http://www.politico.com/magazine/story/2015/08/marco-rubio-plan-to-fix-health-care-121453

http://www.npr.org/sections/itsallpolitics/2015/10/14/448570670/jeb-bush-has-a-plan-to-replace-obamacare-heres-whats-in-it

HiddenLevers

US HEALTHCARE SECTOR

HEALTHCARE: Performance Comparison


Biotech has outpaced Nasdaq + S&P Health Care Index by 3X

Biotech:+450%

Nasdaq: +130%

S&P Health Care:

+130%

http://www.hiddenlevers.com/hl/u?1kbmQCT

HEALTHCARE: Biotech Fundamentals

sources: HiddenLevers, Kaiser Family Foundation

-New Drug Approval relatively flat since 1970.-Biotech Sector has surged anyway in last 6 years.-Reasons: Pharma pricing power, QE fuel

http://www.hiddenlevers.com/hl/u?1PRnOS9

http://www.healthsystemtracker.org/chart-collection/the-latest-health-spending-projections/?slide=2

HEALTHCARE: Biotech Crash

source: HiddenLevers, Investment News

http://www.hiddenlevers.com/hl/u?1GxIDPI

http://www.investmentnews.com/article/20151001/FREE/151009996/hillary-clintons-tweet-induced-biotech-sell-off-has-created-buying

HEALTHCARE: Opportunities

source: HiddenLevers

healthcare REITS

wearable tech

preventive care

healthcare IT

drugstores

MACRO SCREENER

https://www.hiddenlevers.com/hl/screener?52wkChangeMin=-10&peMax=&Stock=yes&volMin=&impact=0.01&rsquared=0.3&yieldMin=&pegRatioMax=&yieldMax=&locationid=&allAssets=false&Fund=yes&outputformat=&debtToEquityMin=&priceToBookMax=&volMax=&52wkChangeMax=&sortby=Lever+Impact&sc=lever&ETF=yes&ADR=yes&profitMarginMin=&profitMarginMax=&volumeMax=&twoYearImpact=y&positiveImpact=0.01&epsMax=&peMin=&mddMin=&savedScreenName=Rising+Health+Care+Costs&mddMax=&marketCapMin=500000000&roeMax=&roeMin=&debtToEquityMax=&epsMin=&marketCapMax=&REIT=yes&negativeImpact=&priceToBookMin=&priceToSalesMax=&sectorid=&priceToSalesMin=&volumeMin=&FixedIncome=yes&Alternative=yes&pegRatioMin=&MLP=yes&leverid=19&CEF=yes&

https://www.hiddenlevers.com/hl/screener?52wkChangeMin=-10&peMax=&Stock=yes&volMin=&impact=0.01&rsquared=0.3&yieldMin=&pegRatioMax=&yieldMax=&locationid=&allAssets=false&Fund=yes&outputformat=&debtToEquityMin=&priceToBookMax=&volMax=&52wkChangeMax=&sortby=Lever+Impact&sc=lever&ETF=yes&ADR=yes&profitMarginMin=&profitMarginMax=&volumeMax=&twoYearImpact=y&positiveImpact=0.01&epsMax=&peMin=&mddMin=&savedScreenName=Rising+Health+Care+Costs&mddMax=&marketCapMin=500000000&roeMax=&roeMin=&debtToEquityMax=&epsMin=&marketCapMax=&REIT=yes&negativeImpact=&priceToBookMin=&priceToSalesMax=&sectorid=&priceToSalesMin=&volumeMin=&FixedIncome=yes&Alternative=yes&pegRatioMin=&MLP=yes&leverid=19&CEF=yes&

HiddenLevers

SCENARIO: US HEALTHCARE COSTS

2014 – ACA new + Obama v GOP

Scenario Update

costs contained via ACA

costs contained despite ACA

Runaway costs

2015 – New Voices + Biotech Bearishness

Obamacare

US Healthcare Costs

GOOD: Employers Drop Coverage


corporations, large + small, done as providers

ACA penalties cheaper than

plans

Business can drop plans and

hike pay to attract workers

“Cadillac” tax removes tax deductibility

No healthcare costs = higher

margins

BAD: Price Controls Hurt Sector

Let Medicare negotiate = drug

price crash

new regime puts the squeeze on healthcare sector


Clinton mention

tanked biotech

New specialty drugs priced in

six figures

Biotech (eg Valeant) biz model IS price

hikes

UGLY: Runaway Costs Hurt GDP

Healthcare sector

outperforms

source: HiddenLevers, EIA, DOT, Business Insider

All other sectors negatively impacted

prices spiral despite government efforts

Healthcare spend crowds out consumer

spending

Healthcare inflation

doubles to 4.5%

Medicare solvency again

in doubt

http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=MCRFPUS2&f=M

http://www.fhwa.dot.gov/policyinformation/travel_monitoring/13septvt/figure1.cfm

http://www.businessinsider.com/commodities-are-entering-deflationary-vortex-2015-8

http://www.businessinsider.com/commodities-are-entering-deflationary-vortex-2015-8

SCENARIO: US Healthcare Costs

healthcare inflation

4.5S&P

-12%


2.0S&P

0%


1.2S&P

10%

US employers could become more competitive globally if they drop health care coverage or increase deductibles significantly.

Healthcare sector has enjoyed price increases above inflation for decades – price controls or bulk government discounts could challenge this trend

High healthcare inflation might act as a “tax” on GDP, lowering consumer and business spending and driving markets lower.

Goodemployers

drop coverage

Badprice

controls hurt sector

Uglyrunaway

costs hurt GDP

Healthcare Hijinks – Take Aways

Healthcare cost deflationpre-dates Obamacare

Biotech + big pharma face headwinds previously avoided

Link between employer + healthcare is ending

Healthcare inflation outpacing CPI is due to third party payers

healthcare webinar slides-10-28-2015

Economy & Finance