President Barack Obama’s first term brought the fight to pass the Affordable Care Act. In his second term, several segments of the health care industry are poised to benefit from the coming influx of up to 30 million paying customers who will have medical care coverage in January 2014.
With Barack Obama’s inauguration to a second term, so launches a boom in the next 12 months for the health care industry preparing to provide benefits and services to potentially 30 million uninsured Americans.
Already, companies that have struggled amid a slow economy and disputes over what they should be paid by a smaller pool of employers are setting the stage for success in the coming year and beyond. They all share in common a coming influx of customers which means a large pool of Americans with a pent up demand for medical care. These new customers will be armed with subsidies to buy coverage or find access to an expanded Medicaid health insurance program for the poor.
“The commitments we make to each other – through Medicare, and Medicaid, and Social Security – these things do not sap our initiative; they strengthen us,” Obama said today in his inaugural address. “They do not make us a nation of takers; they free us to take the risks that make this country great.”
Here are four key segments of the health care industry poised to take advantage of new benefits under the Affordable Care Act as well as rules and regulations that will bundle payments to medical care providers, rewarding those who provide higher quality medical treatment and lower costs health services. Broader coverage will kick in for the uninsured in January of 2014.
1. Pharmacies and retailers that sell drugs and offer outpatient medical care service. Walgreen (WAG), CVS/Caremark (CVS) and Wal-Mart (WMT) are pushing further beyond just having pharmacists fill prescriptions to providing flu shots and hiring advanced-degree nurses to do physicals and wellness exams. “With a strong foundation and the right strategies, structure and talent in place, and with many of last year’s headwinds becoming this year’s tailwinds, Walgreens is well-positioned to ensure its market leadership, growth and profitability well into the future on behalf of its customers and shareholders,” Walgreen Chief Executive Gregory Wasson told shareholders earlier this month at the company’s annual meeting in Chicago. “With nearly 70 percent of the U.S. population either without a primary care physician or not utilizing one, and more than 30 million people gaining insurance coverage in 2014 under health care reform, we are well-positioned to fill the void in care.”
2. Urgent care centers. The acquisition two years ago by health insurance giant Humana Inc. (HUM) of urgent care provider Concentra set off a wave of consolidation and spending by large hospital systems wanting to provide more outpatient medical care service in less costly settings. Urgent care and immediate care centers offer more service than retailers and are generally staffed by physicians and offer X-rays and certain tests unavailable at a retail setting. Humana’s Concentra subsidiary is the largest occupational and immediate care medical private medical care provider in the country with more than 340 walk-in centers in 40 states.
3. Hospital operators. As doctors and clinics struggle to access capital to pay for information systems and deal with millions of newly insurance patients, physicians and other smaller players will turn to hospital operators for help. Physicians are forming closer alliances with hospitals with many doctor practices selling out to hospitals and becoming employees. Though most large hospital operators that dominate the health care landscape are tax-exempt and not-for-profit like Intermountain Healthcare, Geisinger Health System and Kaiser Permanente, their investor-owned rivals like HCA Holdings (HCA); Tenet Healthcare (THC) and Vanguard Health Systems (VHS) are also poised to take advantage of this consolidation trend sweeping the country.
4.Health insurance companies. By this fall, commercial health insurance companies with a traditionally strong foothold in the market of selling benefits to small businesses and individuals are expected to step up marketing their plans to customers that will have access to coverage in January of 2014. Blue Cross and Blue Shield plans, such as those owned by Wellpoint (WLP) and its Anthem subsidiary as well as UnitedHealth Group (UNH) and Aetna (AET) are expected to offer products to both individuals and small businesses on online marketplaces known as exchanges that will begin providing health benefits a year from now.
Originally posted in Forbes online by Bruce Japsen