When Health Care Stocks Rise, Patients Suffer

When a stock price rises or has a better P/E ratio, this is generally considered a measure of success. Is this true for health insurance stocks? Stockholders certainly are happy, but what about the purchasers of the carriers’ policies? Are patients smiling when the stock price goes up? The primary function of any healthcare system is not to save money or to insure people. It is to facilitate timely access to needed care. Having an insurance policy, whether private or government-supplied, is considered the key to a doctor’s office. One might surmise that when an insurance seller does well, so does the insurance buyer.  Is there a relationship between the financial condition of companies that sell health insurance and the people who buy their policies?   Financial Data The ten-year period of 2007-2017 was chosen as it spans a time before the Affordable Care Act was passed in 2010 and three years after the ACA was implemented. Some market changes could...(Read Full Article)
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