Perspectives Blog

Death, taxes and Medicaid expansion

Harlan Sonderling, CFA, Senior Healthcare Analyst | September 8, 2014

Almost as certain as death and taxes is Medicaid expansion under ACA and the move by states toward Medicaid managed care and away from traditional fee-for-service. Medicaid managed care enrollment will expand as states transition beneficiaries from fee-for-service coverage to managed care and the “opt-in” states broaden eligibility. Medicaid coverage expansion will be a source of accelerating revenue and earnings within the managed care industr…

Obamacare’s insurance exchanges

Columbia Management, Investment Team | December 9, 2013

…nments. The unknown, but promising, size and rate of this migration has elevated shares of insurance brokers and managed care companies and pressured others’, such as pharmacy benefit managers (PBMs), which face profit margin risk despite offering more restrictive pharmacy benefits such as narrow retail networks, restrictive drug formularies, mandatory mail-order and more restrictive clinical programs. So what is a private insurance exchange and…

The importance of being transparent

Harlan Sonderling, CFA, Senior Healthcare Analyst | December 2, 2013

…them, which creates “unwarranted variation.” None of this is to say that an unconscious victim needing emergency care can direct her ambulance to the best available emergency room, nor can she negotiate the price of her care; but there are fair and simply ways to identify the good and bad outliers within a town or city and use these outcomes data to reward good performance, identify bad outliers, and drive improvement across the system, harnessin…

Profit margin watch

Tom West, Director of Equity Research | October 13, 2014

…sruption in the form of legislation around pricing and offerings. Healthcare has absorbed much of the Affordable Care Act pretty well. Managed care companies have held onto profitability, and some of the providers are benefiting from the growth in utilization. The financial sector was hit with a variety of restrictions—from limits on overdraft fees on small checking accounts to the amount of capital that must be held by the largest capital market…

Should investors care about valuation?

Rich Rosen, Portfolio Manager | November 25, 2013

Is valuation an effective tool for deciding on whether to invest in a stock? We look at other drivers of a stock’s worth Earnings and earnings growth could be more useful in evaluating a stock’s worth Many of the market experts paraded around on the business programs, when asked about their forecast for stocks, often begin with a comment about valuation. But really, how effective is valuation as a gauge for determining whether it is a good tim…

European equities – Should investors care about periphery vs. core anymore?

Dan Ison, Portfolio Manager | January 13, 2014

The more dramatic the economic reforms, the better the stock market performance in the eurozone We expect nominal growth to be the key driver of an improving earnings picture in Europe European equities should show further good returns to investors in 2014 As we enter 2014 there are the usual questions, conversations and strategy pieces extolling the virtues of different regions and asset classes. 2013 saw a phoenix-like resurgence in interest…

The case for active bond management

Carl Pappo, Head of Core Fixed Income | August 25, 2014

…d tax implications among other key factors. A critical decision investors must make is choosing between actively managed and passively managed funds. There is currently $2.9 trillion invested in taxable bond mutual funds, including ETFs, of which $2.3 trillion is actively managed (Morningstar, June 2014). In this article, we will evaluate these two styles and build a case for the benefits of active management over passive/index strategies. The ob…