With these concerns at the forefront, the Obama administration worked on a plan and introduced ‘ObamaCare’, also known as the ‘Health Care for America Plan’ in 2010. ObamaCare also makes health insurance more affordable to lower and middle-income Americans and small business employers.
With roughly 44m Americans unable to get health insurance, there are still concerns about whether ObamaCare is enough to reform the $2.8trn (£1.8trn) US healthcare industry.
Long-term investment pays
Long-term investment in companies that are addressing real challenges is key and show exciting times ahead for the sector.
This is recognised particularly in DaVita Healthcare Partners, which provides dialysis to patients suffering from end-stage renal disease (ESRD). The company has benefited from structural growth due to the increasing incidence of diabetes and lower deaths as treatment has improved.
Options for these patients are limited, given that the only alternative to long-term treatment is a kidney transplant. The recent acquisition of Healthcare Partners, the doctor-network operator, by DaVita in 2012 has given the company a strong physician practice platform to benefit from Medicare reimbursement changes and to offer solutions to cost efficiencies.
Healthcare Partners’ acquisition diversifies the business into managed healthcare and could give further upside. Companies like DaVita offer the opportunity to succeed in a tough environment.
Jamie Jenkins is director of global thematic equities at F&C Asset Management
