Managed Care To Benefit From Moderating Cost Trend Pressures: Goldman Sachs
According to Goldman Sachs, “cost trend pressures for 2010 have moderated (companies see volumes remaining sluggish), a trend we expect will continue to benefit managed care while pressuring the providers (but also contribute to attractive small-scale M&A opportunities for provider companies)…. Uncertainty over health reform regulations will gradually diminish and we expect the NAIC and Harte-Hanks Inc (NYSE: HHS) will continue to favor pragmatism over ideology.”
“Discussions with both hospital and HCIT companies point to less steep near term ramp for electronic health records (EHR) as a result of: (1) the delay in ‘meaningful use’ EHR regulations, (2) predictions that the penalties for failure to adopt EHR may be pushed out or delayed,” the analysts mention.
Goldman Sachs has raised its targets for AGP, CNC, MOH, and WCG. The analysts consider CI, CNC, HNT, UNH, WCG (managed care) and CYH (hospitals) as its top picks.
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