Healthcare

US health reform: a primer for the uninitiated

9 Sep 2009

President Obama is making a rare address to both houses of Congress on Wednesday evening in an effort to put his healthcare reform firmly back on the rails. Robert Cyran explains the issues, what went wrong and what might happen next.

Personal View: Healthcare may be Kennedy’s Compromise of 1850

26 Aug 2009

Like Henry Clay, Edward Kennedy was a flawed but hugely important US legislator, more so than several presidents. Like Clay s nationalism, Kennedy s career embodies a questionable principle, that of government as provider. Obama s health plan may end up as Kennedy s legacy.

US corporate profit surprises may not last

23 Jul 2009

A third of the way through the US reporting season, secondquarter earnings look far better than expected thanks to cost and inventory cuts. But those are relatively quick, easy fixes. Longer term, profits depend on economic growth and rising sales. Those will come more slowly.

Swine flu unlikely to make UK economy sicker

20 Jul 2009

According to some UK economists, the country s next crisis will be epidemiological. But predictions that swine flu will cut the country s GDP by 5% look overdone. Only a virulent mutation could do that. Fear may hurt a little, if it cuts into leisure and tourism.

US tax hikes should target deductions, not income

13 Jul 2009

Democrats proposed 13% surtax on the rich may not yield enough revenue to fund healthcare reform. Instead, they should try to limit deductions on mortgage interest and charitable contributions. Such changes would be harder to evade and have fewer adverse economic effects.

Boomtime services glut behind consultants’ merger

29 Jun 2009

Towers Perrin and Watson Wyatt rode the credit wave, advising companies on hiring and integrating staff and justifying boardroom pay. Advice on regulatory compliance and pensions is still in demand. But the $3.5bn deal is about cutting costs in recessionhit service areas.

Epidemics aren’t profitable enough for drugmakers

29 Apr 2009

Roche s Tamiflu is the remedy of choice for swine flu. Yet the Swiss group s experience suggests the financial rewards for producing drugs to treat deadly diseases that can spread to epidemic proportions aren t sufficient to spur companies to develop new treatments.

Flu scare sets scene for anxiety through the autumn

27 Apr 2009

The chance of containing swine flu is essentially zero. The question now is how virulent it will be especially as the virus will mutate quickly over the next several months. Expect multiple waves of market panic in the runup to flu season.

US drugs deal shows benefit of going horizontal

13 Apr 2009

Express Scripts lost out to CVS in the battle for Caremark. But two years down the road the drugs benefits group's avoidance of vertical integration has been rewarded by better performance, crowned with a $4.7bn deal to acquire WellPoint s benefits business.

Private equity not the solution for Irish banks

25 Nov 2008

The Irish banks need to raise capital to peergroup levels to regain investor confidence. But unlike UK banks, they aren t going bust right now. That makes government intervention harder to justify. But allowing private equity to take pricey stakes isn t the way forward.

CVS Caremark acquisition adds more to overloaded plate

13 Aug 2008

The drugstore chain has outperformed rivals since it bought benefits company Caremark for a song. But it hasn t definitively proven the merits of the combination. Buying rival Longs Drugs could delay this.

Sharp private equity value write-ups can sour fast

25 Mar 2008

Some of HCA s investors are marking up their stakes in the hospital operator. A small increase in ebitda has translated into a big paper gain due to the magic of leverage. But rising bad debt and government health care reforms could turn this virtuous circle vicious.

US health insurers swamped by rising costs

11 Mar 2008

They enjoyed a shortlived reputation as a safe haven from economic storms. Wellpoint s warning of increased competition and healthcare inflation looks like the first break in the dike. Investors are bailing.

Philips pays breathtaking $5.1bn for Respironics

21 Dec 2007

The Dutch conglomerate has made its biggest acquisition ever. The concept is fine, but the price is a hefty four times sales. To add value Philips will have to meet some fairly stiff synergy targets.

Alaska’s $1.8bn lawsuit against Mercer will hurt retirement funds

7 Dec 2007

Alaska is suing its retirement fund actuary, Mercer Consulting, for far more than what Mercer earned for its advice. If it wins, advisory fees may soar hurting retirement funds across the country. Alaska must learn to pay for its own incompetence.

Are some turnarounds too risky for public groups?

13 Jul 2007

Companies put on the block often are covered in warts look at troubled contact lens group Bausch & Lomb. It makes an attractive target for rival Advanced Medical. But big shareholder ValueAct says private equity should spiff B&L up first.

Tender offers make triumphal US return

7 Jun 2007

For years, confusion over the best price rule kept this fast and efficient takeover tool virtually off limits. SEC reforms changed that. As the $11.4bn Biomet deal shows, this can expedite deals and get round pesky proxy advisors. So is this good or bad for investors?

Biomet shareholders should hold out for more

30 May 2007

Blackstone won the auction for the orthopaedic firm with a $10.9bn bid. While fair at the time, that now looks cheap. The sector rallied, and Biomet is fixing its problems. It will probably trade back in line with competitors eroding the takeover premium.

Bausch & Lomb’s $4.5bn buyout is opportunistic

16 May 2007

The US contact lens group has certainly been a dog. Its fleas include improper accounting, product recalls and liability lawsuits. But Bausch & Lomb is rapidly sorting out these problems. Shareholders should demand more than Warburg Pincus is offering.

Caremark battle set to end with whimper

12 Mar 2007

Express Scripts won t raise its $26bn hostile bid. That should guarantee CVS s merger gets approved at Friday s shareholder vote. But Express has a consolation gift it forced its rival to pony up another $3.2bn. Moreover, it may also have put itself in play.