全民医疗保险(M4A)框架

1、North America EquityResearchMarch2019H E A L T H C AR EF A C I L I T I E S & M A N A G E DC A R EA Medicare for All (M4A) FrameworkDiversified HMOs | Govn HMOs | Acute Care | Sub-Acute | Outpatient | Outsourced ServicesNYC Institutional Client Lunch Wednesday March 6, 2019 Noon ETContact JPM sales f

2、or detailsHealthcare Facilities & Managed Care NYC Institutional Client Lunch Wednesday March 6, 2019 Noon ETContact JPM sales for details212-622-6600 HYPERLINK mailto:gary.taylor gary.taylorJ.P. Morgan SecuritiesAnthony Makdessi212-622-3682 HYPERLINK mailto:anthony.makdessi anthony.makdessiJ.P. Mor

3、gan Securities LLCSee the end pages of this presentation for analyst certification and important disclosures, including non-US analyst disclosures.1J.P. Morgan does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may have

4、a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision. On January 3, 2018, MIFID II came into effect. Therefore, you may only be eligible to participate in this event if you have the

5、appropriate level of access to J.P. Morgan research. Please check your eligibility before participating/accessing.”1Thesis, Top Picks, Catalysts & “Out-of-Consensus” HighlightsLONG-TERM THESISOwn payors vs providers. Managed care represents a high-ROIC play on the most secular investment trend in th

6、e US; healthcare spending growth GDP growth.Providers generally represent a lower-ROIC play on that same secular trend. The long-term shift from FFS to Value reduces volatility of earnings for payors while increasing earnings growth and volatility for providers. M4A will ultimately fail, in our view

7、.NEAR-TERMPOSITIONINGPayors (+): We a rebound after the worst M4A Bidens declaration & strong 1Q19earnings.Providers (-): We remain only selectively positive. The YTD short rallies dont seem sustainable on back-half loaded guidance, weak volumes & political uncertainty.TOP PICKSWCG Well positioned g

8、overnment story with margin visibility into 2021 from Meridian accretion, MA momentum, FL MDCD margins, AET PDP & CVS PBM renewal.HUM Well positioned pure-play MA story with strong fundamentals.CATALYST CALENDARANTM Investor NYCMar 7Competitor HC Conference Mar11-13Competitor HC Conference Mar12-14H

9、UM Investor NYCMar 19MA 2020 Advance RuleApr1HHS Drug Rebate Comments DueApr8UNH2Q18 EarningsApr 16MOH Investor NYC 30Investor NYC 312020 MA/PDP BidsDueJune 3CVS Investor NYCJune 4CNC Investor NYCJune 14STAR+Plus, STAR, Chip RFPAwardJune/July2Source: J.P. Morgan and Bloomberg.OUT-OF-CONSENSUS IDEAST

10、he a to reform beyond 2022.nor providers defensively vs SPX during the last recessions. outperform providers & SPX in rate tightening cycles.NFP Blues commercial margins deteriorating in 2018, which 2019 pricing pressure, contrary to the “improving RBC”thesis.MCO parity SPX valuation is warranted &

11、sustainable as consolidation & diversification earnings the last however, valuations to pressured during the 2020 election FL hospitals experience EBITDA growth from MDCD expansion to “crowd-out” HIX-subsidized population 40% co-sponsor the radical “Medicare for All Act of2019”.Impact on Sentiment R

12、ecalling the bruising fight to pass the ACA in 2010 and the fundamental uncertainties created by the legislative battle, we envision a sentiment overhang on both payors and providers into 2020. The recent TexasACA court ruling (theentire ACAunconstitutional)will (has) furtheranimate,emboldenandaccel

13、erate the Democrat proposals we believe generalist investors (have) become more wary of investing in the sector as the year progresses, which could (has) drive multiple compression despite our strong EPS growth outlook for managedcare.Managed Care The possible fundamental impact of an expanded gover

14、nment role in healthcare really depends on the details. In a true single payor scenario, publically-traded payors essentially cease to exist. On the other hand,“MedicareforAll”couldservetomove90mEGHPASOlivesintoriskproductsforwhich managedcare has 30%market sharethis would constitutean $500brisk pre

15、mium opportunity.Either scenarioposessomerisk to commercial enrollment and profitability, a key reason why our 2019 bias shifted from commercial (CI & ANTM) to government insurers (WCG &HUM).Providers Most providers earn the majority of their profits from commercial patients. Therefore, we cannot im

16、agine an scenario of increased government/lowercommercial enrollment that isnt materially negative for most healthcare providers (HHA & sub-acute generally would be a clearexception).Four Contemplated Paths to Expanding Healthcare EntitlementsInvestors were spooked by last weeks radical “Medicare fo

17、r All Act of 2019”, with its key sponsor Jayapal stating “we meanasystemwheretherearenoprivateinsurancecompaniesthatprovidethesecorebenefits”.SenKamalaHarris also recently supported a similar vision of M4A without the insuranceindustry.Joe Biden is notable as a leading Democratic contender (not yet

18、declared) who has not advocated for M4A or the “Green New Deal”. Wedeem Bidens likely emergence as a moderate voice as a potential positive, muting the political overhang. Michael Bloomberg has publicly criticized the feasibility of M4A, but could support Medicare access for the still uninsured (?).

19、 Beto ORourke supports “single-payor” but not M4A(?).Representative LegislationPresidential CandidatesImplications to:(i) Payors(ii) ProvidersPathways1) Federal Govn as Single PayorThe Medicare for All Act of 2019, HR 676, Medicare forAll ActBernie Sanders, Kamala Harris, Elizabeth Warren, Cory Book

20、er,Kirsten GillibrandPrivate health insurance model disappears or relegated to supplementalMargins dramatically squeezed from lower government reimbursement rates2) Early Medicare Buy-InMedicare at 55 Act, Medicare Buy- In & HealthcareStabilization ActSherrod Brown, Cory BookerEGHP profits decline,

21、MA UWprofi ts increase, commercial ASO lives shift to MA risk livesMargins incrementally squeezedfrom lower government reimbursement rates3) Public Plan Option on ExchangesPublic Option Deficit ReductionAct, Medicare XKlobuchar, Jay Inslee, Michael Bloomberg, JohnDelaneyHIX profits decline, eventual

22、ly EGHP profits could declineMargins incrementally squeezed from lower governmentreimbursement rates4) Expanding Medicaid Eligibility/Buy-inThe State Public Option ActAmy KlobucharHIX profits could decline, EGHP profi could decline, MDCD profi ts/enrollmentincreaseMargins incrementally squeezed from

23、 lower government reimbursement ratesLine of Business and Company ExposuresThe “devil is in the details”, but generally shifting commercial lives with higher underwriting (UW) margins for payors and higher reimbursement rates to providers towards either Medicare or Medicaid is an incremental negativ

24、e for commercial employer group (EGHP) UW profits, a possible positive for MA or MDCD UW profitsbut almost always only an incremental negative for provider profits. Early Medicare buy-in with a role for MA could materially expand the size of the MA market if EGHP ASO shifts into MA (similar to EGWP

25、for retirees). & WCG were our 2019 Top Picks (JPM Focus List) because they are good fundamental stories that are positioned with higher MA & lower EGHP & HIXexposures.Representative LegislationPresidential CandidatesImplications to:(i) Payors(ii) ProvidersPathways1) Federal Govn as Single PayorThe M

26、edicare for All Act of 2019, HR676, Medicare for All ActBernie Sanders, Kamala Harris, El izabethWarren, Cory Booker, Kirsten Gillibrand(payors)(providers)2) Early Medicare Buy-InMedicare at 55 Act, Medicare Buy-In & Healthcare Stabilization ActSherrod Brown, Cory Booker(EGHP UW) MA UW(providers)3)

27、Public Plan Option on ExchangesPublic Option Defi cit Reducti on Act, Medicare XAmy Klobuchar, Jay Inslee, Michael Bloomberg, John Delaney(HIX UW)(EGHP UW?)(providers)4) Expanding Medicaid Eligibility/Buy-inThe State Public Option ActAmy KlobucharMDCD UW(HIX UW)(EGHP UW?)(providers?)Approximate 2019

28、 Profit ExposureMedicare (MA)Medicaid (MDCD)ACA Exchanges (HIX)Commercial (EGHP)Intl/OtherUNH30%10%0%55%5%ANTM15%20%5%60%0%CI10%0%5%65%20%HUM80%5%0%15%0%CNC5%55%35%5%0%WCG40%60%0%0%0%MOH5%65%30%0%0%HCA & Other Hosp0%(1%)10%101%(10%)DVA0%0%10%90%0%ACHC10%25%5%30%30%MD10%15%10% higher/lower vs planbid

29、Generally, it is difficult for PDPs to earn/lose more than+/-10%WCGdoesntrecordcatastrophicreinsurancereceiptsaspremiumrevenue,butCMSwould,pushingthe CMScalculatedMLRevenhigherthanshown(WCG2019MLRrebatewas2.3%ofpremiums)Plan BidRisk Corridor ImpactDrug Costs vs Bid0%5%10%20%30%40%Premiums100.0100.01

30、00.0100.0100.0100.0Drug costs85.089.393.5102.0110.5119.0G&A10.010.010.010.010.010.0Margin5.00.8-3.5-12.0-20.5-29.0Corridor receipt0.00.02.18.915.722.5Net Margin5.00.8-1.4-3.1-4.8-6.5CMS MLR89.8%93.4%95.2%96.8%98.2%99.4%Drug Costs vs Bid0%-5%-10%-20%-30%-40%Premiums100.0100.0100.0100.0100.0100.0Drug

31、costs85.080.876.568.059.551.0G&A10.010.010.010.010.010.0Margin5.09.313.522.030.539.0Corridor payment0.00.0-2.1-8.9-15.7-22.5Min MLR Rebate0.00.0-1.3-4.5-7.7-10.9Net Margin5.09.310.0CMS MLR89.8%86.1%83.6%80.0%75.9%70.9%Housekeeping: AET Bridge to CVS HCB Segment GuidanceCVS covered by JPM analyst Lis

32、aGillThe conclusion from our historic coverage of implied organic AET guidance is better than first glancewould suggest (primarilydue to HIF andAET RX moving into CVS PPS segment), but stillbelow consensus expectations. AETs sizable MA growth for 2019 drives 6% consolidated revenue growth by itself

33、but comes with higher MLR and lower margins in the first2019 AET Guidance BridgeJPM 2018EHCSegmentadd:SilverScriptsless: est AETRXHIF Gross-UpImpactNet RevsAdj. Op IncMLR61,7213,413(3,015)(1,185)5,21894(151)(249)81.13%0.29%1.85%Normalized2018 60,9332019Guidance68,500normalizedyty12%MAGrowth3,7804,91

34、283.28%5,14584.00%5%0.72%600.49%yty growth ex-MA6%4%0.23%Analyst Certification: All authors named within this report are research analysts unless otherwise specified.The research analyst(s) denoted by an “AC” on the cover of this report certifies (or, where multiple research analysts are primarily r

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