By Anna Wilde Mathews
The prospect of Dr. Mehmet Oz atop the Centers for Medicare and Medicaid Services sparked enthusiasm among managed-care investors, sending up shares of UnitedHealth and Humana Wednesday. Hospital investors were on the opposite side, pushing down the stocks of HCA and Tenet.
The TV personality has been a cheerleader for private Medicare plans in the past, fueling a rise among companies that focus on those products. Oz previously suggested that Medicare Advantage plans should grow, and criticized the "fee for service" style of payment used in traditional Medicare. In afternoon trading, UnitedHealth was up 3% and Humana rose 4.6%.
Medicare-focused insurers have seen their shares pummeled this year because of margins squeezed by higher medical costs and some regulatory moves by the Biden administration that limited certain billing practices and made it harder to achieve lucrative bonuses.
The shifts highlighted to investors the power of CMS over the companies' earnings, and they likely hope that Oz will reverse them, or at least avoid further tightening of payment policies.
Even Medicaid-focused companies such as Molina Healthcare and Centene, which have suffered lately from investors' perception that Republicans are more likely to implement cutbacks to the program's funding, saw upticks.
But on the hospital side, a growing managed-care role in government health benefits isn't likely a welcome prospect. HCA and Tenet slipped in early trading, both by less than 2%.
Hospitals have complained that the private companies' practices make it harder for them to get paid for needed care, and a number of prominent systems have left Medicare Advantage plans' networks in the last few years.
This item is part of a Wall Street Journal live coverage event. The full stream can be found by searching P/WSJL (WSJ Live Coverage).
(END) Dow Jones Newswires
November 20, 2024 12:10 ET (17:10 GMT)
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