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What Does Healthcare Reform Mean for Healthcare Investing
Posted on: March 23, 2010 by 2 Comments »
I think that this bill, without analyzing every line on every page, will have some positive effect on healthcare investing and finance.
1. The removal of uncertainty is good. Now that there is at least some idea of what the new rules will be, investors, and strategic participants in the business can react. Some of the investment press has already suggested that healthcare will be a good place to be – the WSJ had a pretty good article this morning about winners and losers. Hopefully some of the prospective buyers and sellers of healthcare businesses who have been on the sidelines for awhile will now be back in the game.
2. Healthcare investing, both public and private, has historically been compared to a swinging pendulum. Time the swing right, and you make money. This phenomenon has been reinforced by healthcare entrepreneurs, particularly on the services side, who have a knack for sorting out government regulation and other business impediments. When the government changes the rules, they scramble and figure out how to make money in the new game, and when they pendulum swings, they win.
Of course after the commercial interests have mastered the new rules, the government takes notice of all the money being made, and changes the rules again. The game starts over. Entrepreneurs will look at the new rules and go to work.
