J.P. Morgan Healthcare Conference—Wednesday, January 14 Update
The keynote speaker for today's lunch was Ted Kennedy Jr., president of the Marwood Group. He spoke about the political catalysts in 2009 that will impact healthcare investing. The presentation can also be accessed as a webcast.
Kennedy believes that under the new Obama administration and a Democratic Congress, healthcare reform initiatives that will probably pass this year are an expanded SCHIP program, a Medicaid bailout (FMAP), and Health IT investment by the government (about $20 billion). The major changes to the product landscape will be new FDA leadership, follow-on biologics review, new generic-friendly policies, and safety issues related to imported drugs.
The big idea for 2009 is passage of a comprehensive healthcare reform bill by Congress that includes a large Medicare bill along with addressing what Kennedy calls the Doctor Payment Fix (i.e., how to pay the docs under any new reform package, which Kennedy estimates to be $300 billion). Kennedy believes Congress will enact a new comprehensive healthcare package, because of this new window of opportunity in which “the planets are aligned to make it happen in 2009.”
In contrast to the healthcare reform package proposed by the Clinton administration in 1993, there is no organized opposition to the current plan, and the commitment of Obama and his Secretary of HHS, Tom Daschle, will give rise to a greater probability of success this time around.
It was particularly interesting that Kennedy noted that this time around younger voters are keenly interested in the government providing some form of universal healthcare. In the past, it was the older voters who were interested in Medicare and Medicaid. Now, though, with great uncertainity of the economy, younger voters are concerned that some form of government-sponsored program is around when they get older.
Similar to the Reinhardt's views presented yesterday, Kennedy believes that a $20 billion investment in Healthcare IT will be the cornerstone of this new reform/economic stimulus package.
Kennedy also gave a comprehensive overview of the different sectors of healthcare that will be stressed, segments that will still be stable, growth areas, and companies such as those focused on medical devices and diagnostics (areas that will reduce the rising cost of healthcare) that will do well under the Obama administration.