6. Budget Deal – Debt Ceiling tabled until 2017
4
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%
7. 2011 US Debt Downgrade: First HL Success
Research
+
Model
Accuracy
+
Functionality
9. TREND: Healthcare Inflation vs CPI
sources: HiddenLevers
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
10. 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
11. OBAMACARE: Report Card
SUCCESS 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
12. OBAMACARE: Candidate Platforms
sources: HiddenLevers, Time, NY Times, Politico, NPR
Hillary
Clinton
REPEAL
OBAMACARE
RETURN TO
PRE-ACA
LESSEZ FAIRE
HEALTHCARE
Bernie
Sanders
Ben
Carson
Marco
Rubio
Jeb
Bush
REPEAL
OBAMACARE
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
PRIVATE
HEALTHCARE
ACCOUNTS
15. 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
19. 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
20. GOOD: Employers Drop Coverage
source: HiddenLevers
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
21. BAD: Price Controls Hurt Sector
Let Medicare
negotiate = drug
price crash
new regime puts the squeeze on healthcare sector
source: HiddenLevers
Clinton
mention
tanked biotech
New specialty
drugs priced in
six figures
Biotech (eg Valeant)
biz model IS price
hikes
22. 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
23. SCENARIO: US Healthcare Costs
healthcare
inflation
4.5
S&P
-12%
healthcare
inflation
2.0
S&P
0%
healthcare
inflation
1.2
S&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.
Good
employers
drop
coverage
Bad
price
controls
hurt sector
Ugly
runaway
costs hurt
GDP
24. Healthcare Hijinks – Take Aways
Healthcare cost deflation
pre-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
