Dec 7, 2019

Health care profits are soaring

Illustration: Sarah Grillo/Axios

Soaring health care costs are bad news for patients and taxpayers, but great news for the very profitable health care industry.

The big picture: The sector has profited heavily in 2019. Expect more of the same in 2020.

  • Most health care companies are immune from the trade war, and Washington isn't about to impose any cost controls. And the industry will continue to benefit from the GOP tax cuts.

Hospitals' rush to issue new debt signals they will find ways to fill beds

Pharmaceutical companies will keep hiking the prices for popular treatments and fighting off cheaper competitors.

Insurers are benefiting from the rising popularity of private Medicare Advantage plans.

  • UnitedHealth, the largest health insurance company by revenue, just forecasted a very profitable 2020, in line with Wall Street's estimates.

Pharmacy benefit managers have faced challenges to their business models in states, but the biggest ones have insulated themselves by merging with insurance companies.

What to watch: Speaking of health care mergers, expect more of them, even after the spate of blockbuster deals over the past few years.

The bottom line: The health care industry's biggest threat is a Democratic administration focused on health care, but that's a long way away.

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The health care debate we ought to be having

Photo Illustration: Sarah Grillo/Axios. Photos: Scott Eisen/Getty Images and Erik McGregor/LightRocket via Getty Images

Americans worry a lot about how to get and pay for good health care, but the 2020 presidential candidates are barely talking about what's at the root of these problems: Almost every incentive in the U.S. health care system is broken.

Why it matters: President Trump and most of the Democratic field are minimizing the hard conversations with voters about why health care eats up so much of each paycheck and what it would really take to change things.

Republican satisfaction with health care costs surges under Trump

A new Gallup survey shows that Republicans have gotten a whole lot happier about the cost of health care since President Trump took office, while Democrats' satisfaction has plummeted.

Our thought bubble: There is very little reason for anyone to be satisfied with the cost of health care in the U.S. β€” and that has been true for a very long time.

Go deeperArrowDec 12, 2019

Private insurance's costs are skyrocketing

Reproduced from Kaiser Family Foundation; Chart: Axios Visuals

The cost of private health insurance is out of control, compared to Medicare and Medicaid. You see that clearly if you take a long-term view of recently released federal data on health spending.

Why it matters: This is why the health care industry β€” not just insurers, but also hospitals and drug companies β€” is so opposed to proposals that would expand the government's purchasing power. And it’s why some progressives are so determined to curb, or even eliminate, private coverage.

Go deeperArrowDec 16, 2019