#1 Rule for Healthcare Investing
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- เผยแพร่เมื่อ 11 พ.ย. 2023
- The Number 1 Rule for Healthcare Investing... We can only make money if the Patient Comes First.
Historically, healthcare investors have benefitted from healthcare companies (pharma, medical device, PBMs, hospitals, private equity-owned doctor practices) increasing prices.
Pricing power in healthcare comes from 1) inelastic demand and 2) limited competition.
In cancer for example, high healthcare prices and investor returns have been born on the backs of American cancer patients whose out-of-pocket healthcare costs average almost $2,600 per month (even with insurance). In Europe and Australia, cancer patient out-of-pocket costs are $609 and $438 per month, respectively.
In America, the average cancer drug cost $150,000, but only increases life expectancy by about 3 months on average.
As a result of high cancer costs in the US, 51% of cancer patients have medical debt and 28% deplete their savings to pay for their out-of-pocket expenses.
We choose to make money ourselves on the backs of suffering patients when we invest in publicly traded pharmaceutical companies, hospitals, health insurance companies and their PBMs and private equity firms that own physician practices.
We can choose differently if we like.
Sources:
www.ncbi.nlm.nih.gov/pmc/arti...
dailynews.ascopubs.org/do/sal...
kffhealthnews.org/news/articl...
focusbankers.com/private-equi...
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Always admire your perspective with truth, sympathy and moral compass!
Thank you for watching and for your support.
I like your videos and the deeper conversation. The costs of care are similar between Europe/Australia and the US, the cost is just born differently….I’d contend the lower out of pocket is tied to the public policy, not some increased competition. Patients aren’t misled on the average life impact of a cancer drug. You’d need to advocate for rationing care. We don’t ration care here. Other countries do.
And I’d further contend you need price competition to keep costs down. That’s been removed in other countries and their costs will continue to go up with no improvement in quality.
Thank you for sharing your thoughts.
The stastics on chemos survival increase are based on that ASCO article but the article fails to supply a reference for that data. It also mentions it was supplied by a 1st year resident. Do you know of a peer reviewed publication corroborating that data?
Let me know if Dr Bricker writes a book about this for the consumer. I’ll buy one RIGHT NOW!
Will let you know. Thank you for watching.
Thanks for your content and pointing out here that all the players in the HC ecosystem are complicit.
Question: Assuming the trend towards value based care and a more preventative approach is real and forthcoming - will that do anything to shift supply curve rightward, or does it all just come down to competition?
Great question. If VBC is effective in preventing serious disease, it will shift the inelastic demand curve to the left… which is a good thing. Yes, competition drives the supply curve right.
Can you make a video on how to create a lucrative career in healthcare (producer, PBM start up etc)
Could you make a video on the value of going to medical school depending on X or Y specialty? Great video as always!
Thank you for your suggestion.
So, in your opinion, do you think there are any ethical ways to invest in healthcare? Let’s say, for example, in the case of semaglutide products, do you think it’s a net benefit for patients that these products now exist?
Not given current abuse of US patent law to over-extend patents and restrict competition. If they stuck to the rules, then would be ok since not a situation of inelastic demand. There are alternatives.
Agreed, not only does the extending of patents stifle competition, but looking at the exorbitant costs of certain insulin products, it is actively hurting patients.
Pharma shouldn’t not be the target they make up only 10% of the annual expenditure. No matter what we do with drug pricing it will hardly affect the health care spending for Americans.
Thank you for sharing your thoughts.