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China’s Healthcare 3.0

by ChinaInvesting

The lines start early. At 4,500 beds, the Sichuan Provincial Hospital in Chengdu is 10-20x the size of a typical US hospital. It's not only huge but busy. Imagine a busy train station with queues and the bustle of a city. Hospitals in China have bed utilization over 100%, where beds spill into hallways. In the US it's close to 60%, and probably overstated. Healthcare as % of GDP in China is around 7%, sandwiched between Singapore's and Australia's rates, but growing at 2-3x the rate of its econ ...

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Surprise Bills Shake Firms’ Debt

by Industry TrendsMacro Trends

Bond markets, while boring and somewhat aloof for most people, are a source of early signals and key news. When bond investors make big moves to discount a specific bond's price, be careful (as they say in Mexico, aguas). Such is the fate of a few private equity owned healthcare companies. This week the FT rant a great story here on some early troubles in the bond market for some firms. One is Envision Healthcare, the nation's largest physician services company. Last fall, KKR took Envision pri ...

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Why Margins Matter

by Industry TrendsInvestingThought Leadership

If you subscribe to Fortune, you're likely surprised and excited by the heft of the issue on the biggest 500 firms. It's a formidable group: $23T in market value, 29 million global employees, and over $1T in profit. With covers to sell, a cursory look focuses on revenue. But man cannot live by revenue alone. Profits and returns on capital matter. In healthcare, high revenue or other isolated metrics are often used as signs of excess. There are excesses. One is provider consolidation. This g ...

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Could Healthcare Be Like Lasik?

by HDHPsIndustry TrendsThought Leadership

Lasik is odd in at least two ways. It's a rare deflationary healthcare category. It's also awkwardly priced at $2,000 per eye. "Shoes for sale, $50 per shoe." Could healthcare be more like Lasik, shoppable, and deflationary? There are key differences. There are more options in your city for Lasik than hernia surgeries. Lasik is elective. Some medical interventions, the type you use insurance for, are not. Not all hospital stays start with arrival on a gurney. Most hospitalizations for those und ...

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On Medical Price Transparency

by Thought Leadership

In 1966, Look Magazine published an article on US hospital bills, and "why some patients pay too much." Opacity was already an issue, albeit much smaller than now. The 1960s language points to payment and collection issues from "welfare," "indigents," and "deadbeats." According to the director of one CA hospital, the amount needed to overcharge one patient to pay for others, was $6--equal to 6 gallons of 1960s milk. Then there was 1960s paperwork. Blue Cross's reimbursement formulas for ...