Xnarg said: I'm wondering what folks think about investing in or working in the health care industry now that it may be faced with large changes.
The changes will hurt the following people: 1) Highly Paid (>$100k) Management of health insurance companies 2) Highly Paid (>$100k) Management of pharmaceutical companies 3) Highly Paid (>$100k) Professionals (mainly doctors) in the health service sector 4) Investors in Pharmaceutical companies 5) Investors in Health Insurance companies 6) Anyone who currently receives employer-provided insurance 7) Anyone who earns more than $40k per year 8) Small Business Owners
Xnarg said: Would you invest in health care stocks now? Are there industry segments that are more or less at risk?
The changes will likely help the following segments: 1) Information Management of Healthcare 2) People who earn under $40k per year but do not qualify for Medicare
Health Insurance and Pharmaceutical are most at risk.
Xnarg said: For those entering the work force, how is your take on working for a company in the industry?
I think the downsizes have likely occurred and if you have a job or can get one, great! I would also make sure you have a nice severance package for when future cuts come in. Then you will have a nice year of unemployment + severance to switch fields.
nrsmimi
Ancient Member
posted: Aug. 10, 2009 @ 1:33p
The health care industry has a very small profit margin, and it's about to get worse. Working in the field of health care can be grueling, long hours, weekends and holidays, heavy lifting, profit hungry admin. Physical therapists and Occupational Therapists do make good money, though, and are in great demand. They usually work days, have weekends and holidays off, and can get some great sign on bonuses. If I had it to do over again, I would not have gone into nursing. I would have done PT or OT.
skagen
Happy Member
posted: Aug. 10, 2009 @ 1:41p
My wife works in administrative capacities for a hospital network in the area. Very tough for hospitals right now - layoffs have happened and will happen again (not just in administration).
Apparently admittances have been down - that's a large factor (whether that's just my wife's hospitals or if it's symptomatic of a poor economy, I don't know). Another factor has been non-payers, obviously.
That said, I think it's highly likely (whether we like it or not) that there will be some form of health insurance reform done that results in a large government expenditure. It's hard to see how a large part of this would not somehow benefit the hospitals & those in that field. (Addressing really both major problems that my wife has mentioned to me).
If the proposed public health insurance plan goes into effect, I can see hospital administration staffs growing to handle reimbursements from the feds. I don't know if it's this way nationally, but in some local hospitals you have particular staff members dedicated to dealing with individual insurance companies. Even if I use some VERY conservative estimates and say those employees make $50k in total compensation and there are 6 of them, that's $300k, roughly the cost of 2-3 nurse practitioners.
I actually wouldn't bet against big pharm companies. They have huge lobbying power (as evidenced by the prescription plan for Medicare) and more and more doctors are turning into glorified pill dispensers for people who see an ad for a new drug.
IT jobs at hospitals should tick up slightly with the electronic medical records, but that should also (hopefully) yield more efficient health care.
ceobeaver
Senior Member
posted: Aug. 10, 2009 @ 2:09p
I work for big Pharma and there is a lot of consolidation going on in the industry right now. I am thinking that the enormous companies that are being created will have a difficult time reacting to whatever new policies might be ahead. If I were a college kid looking for a job, I'd probably steer away from pharma, but then again, college kids these days should consider taking what they can get because they aren't exactly giving away jobs at the airport.
tripleB said: 3) Highly Paid (>$100k) Professionals (mainly doctors) in the health service sector
I see surgeons and specialists (>$800k) having reduced salaries, but primary cares (<$400k) increased salaries. Look at recently appointed surgeon general, plus verbage for equality of pay for services.
lhendricks92
Senior Member - 1K
posted: Aug. 10, 2009 @ 4:23p
jackcrawfish said: Xnarg said: Pls, no politics!no politics? Please. Image of avatar captured for fun.
haha, i barely stick my nose in this joint anymore, and i know OP's political stance quite well.
Green for the topic, red for the cognitive dissonance.
They'll turn you into a newt, but you'll get better.
lakshmi111
Happy Member
posted: Aug. 10, 2009 @ 9:37p
I agree about medical information management and nursing jobs. Unfortunately, Medicare/Medicaid cuts will probably mean job cuts at least at some hospitals, starting with admin staff and extending to clinical positions. Something to think about, the policy discussion about increasing the number of primary care doctors may lead to programs to forgive student loans and give other incentives to medical students opting for this (unpopular) field. However, I doubt they would be enough to offset the pay gap between primary and specialty care.
mst3kzz
Senior Member
posted: Aug. 11, 2009 @ 9:40a
My wife's a nurse at Johns Hopkins and they recently eliminated the employer-matching contributions to their 403B, also the raises there this year were pathetic, but for now I'm glad she has the job she does because it is 10-hr day shifts on weekdays (at her first hospital she had to do half nights and half weekends). Definitely recommend getting a specialty if you become a nurse (some employers pay for it). I'd be interested in learning what financial opportunities all this healthcare reform is going to open up.
michal1980 said: looks like there will be openings in end of life 'education', and in home child raising 'education'.
New positions won't be created, this will be an additional item that the primary care physician will be expected to discuss. It goes back to 'fewer patients, better care' principle that's being pushed.
And you know the AMA won't allow more doctors to graduate...
Medical office building developers are having a difficult time attracting tenants. Doctors don't want to move or make a financial commitment for more office space due to the uncertainty of their future income under health care reform. As a result, several medical buildings buildings and medical office condo projects are being foreclosed. So there is an investment opportunity to buy MOBs OR medical office condos significantly below replacement cost.
DutchDutch said: michal1980 said: looks like there will be openings in end of life 'education', and in home child raising 'education'.
New positions won't be created, this will be an additional item that the primary care physician will be expected to discuss. It goes back to 'fewer patients, better care' principle that's being pushed.
And you know the AMA won't allow more doctors to graduate...
maybe on the end of life 'education', (and rationing).
But deep inside the house bill their going to send people to 'train' people how to raise kids. that will hire people
Xnarg
Senior Member - 5K
posted: Aug. 12, 2009 @ 12:00p
I'm wondering that as Medicare payments are cut to finance the new approach, will that create business opportunities for private insurance companies to take up the slack.
nrsmimi said: The health care industry has a very small profit margin, and it's about to get worse.
I'd have to disagree. Healthcare has plenty of fields with healthy profit margins. Look into emerging specialties like sleep medicine.
Xnarg
Senior Member - 5K
posted: Aug. 12, 2009 @ 12:46p
BrainySmurf said: nrsmimi said: The health care industry has a very small profit margin, and it's about to get worse. I'd have to disagree. Healthcare has plenty of fields with healthy profit margins. Look into emerging specialties like sleep medicine.For any new field to get launched, there has to be a point in its product life cycle where there is more than average profit.
Do you think with the promised greater scrutiny and control of the industry, that such opportunities for above average profit will be greater or lesser?
raspar
Member
posted: Aug. 12, 2009 @ 1:10p
How do I sign up for one of those Death Panel gigs?
raspar
Member
posted: Aug. 12, 2009 @ 1:10p
+1 Healthcare IT
nrsmimi
Ancient Member
posted: Aug. 12, 2009 @ 8:39p
BrainySmurf said: nrsmimi said: The health care industry has a very small profit margin, and it's about to get worse.
I'd have to disagree. Healthcare has plenty of fields with healthy profit margins. Look into emerging specialties like sleep medicine.
I have worked in the health care field for over 16 years, and have been in a position of having to deal with the "bottom line". The industry standard is 4% profit margin in a good economy. You have heard of doc's who make 6 figure incomes, right? Ask them how many hours they work, how much vacation they take. I did a study of doc's income vs. nurses, and for the hours I put in as a nurse, I made just as much as the docs, and they were all specialists. Sure you can work in a fancy place like Hollywood or the like, but most places can't afford to give you that much. The hospitals I have worked at had major overhead and struggled to make a profit because of all the "free" care they are required to provide.
Op asked a general question on healthcare industry. Believe me, a lot of the sleep centers don't make a big profit either, due to insurance and Medicare contracts that limit their profit. Dh's sleep study was billed at over $1k, but the contract with insurance and provider only netted them $800. MOST healthcare investments give very little return.
PMonkeyDishwasher said: If the proposed public health insurance plan goes into effect, I can see hospital administration staffs growing to handle reimbursements from the feds.Why? In foreign countries where there are such health plans, bureaucratic overhead is lower, not higher, for both hospitals and doctors' offices.
"...Kaiser Permanente said it would eliminate more than 1,800 positions as it struggles with drooping membership, uncertain healthcare reform and shriveling Medicare reimbursement rates."
I would stay away from both, but that is regardless of the current govt takeover. the healthcare industry is already mostly run by the govt so there's very little upside. if the current govt doesn't destroy your investment, the FDA will. healthcare stocks are great shorts though
WASHINGTON (AP) - Quick quiz: What do these enterprises have in common? Farm and construction machinery, Tupperware, the railroads, Hershey sweets, Yum food brands and Yahoo? Answer: They're all more profitable than the health insurance industry. In the health care debate, [some people] have gone after insurance companies as rapacious profiteers making "immoral" and "obscene" returns while "the bodies pile up."
Ledgers tell a different reality. Health insurance profit margins typically run about 6 percent, give or take a point or two. That's anemic compared with other forms of insurance and a broad array of industries, even some beleaguered ones.
Profits barely exceeded 2 percent of revenues in the latest annual measure. This partly explains why the credit ratings of some of the largest insurers were downgraded to negative from stable heading into this year, as investors were warned of a stagnant if not shrinking market for private plans." (more)
I just read a barrons article. Based on some metrics, health care is the only under valued sector after the big rally. I am planning to add some exposure next week.
I don't work in healthcare but my last job was in a hospital, so I can see the different trades that work there. If I had a chance for a do over, say go back and select a new career, I'd go for the specialty medical technology fields like respiratory therapy, radiation therapy,pharmacy, etc. There are a lot of techician level work, but getting a BS degree with certificate in that field probably qualifies one to be the department head, except for pharmacy. Nursing can be physically back-breaking work and in my opinion under-appreciated. Unless one has the years to get out of the grunt work and be a nursing manager, it can be brutal.
I've already developed and secured several business niches which, according to my calculations, have a 84% to 96% probability of success since I'm the only one on the bandwagon as of now. My story isn't unique, and Lawd knows I'm not the sharpest tack in the box. I'm just a guy with an idea who decided to act on it. There will be many more like me coming out of the woodwork once this bill passes, so get ready to ride on our gravy trains.
Let's just say I'm the Colostomy Bag King. Look for my IPO soon.
narshe14
Senior Member
posted: Oct. 29, 2009 @ 5:26p
nycll said: I just read a barrons article. Based on some metrics, health care is the only under valued sector after the big rally. I am planning to add some exposure next week.
What were the metrics? I had thought that healthcare in general didn't fall as hard as other sectors.
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