UnitedHealth Group has been a stock market darling for much of the past decade, dependably churning out earnings increases and rewarding shareholders with staggering returns.

Its latest quarterly report, issued on Tuesday, was superb, as expected. Earnings per share jumped 24 percent. Based on the news about the diversified health service company’s fundamental businesses, you might have expected its stock price to rise.

Nope. UnitedHealth’s share price dropped 4 percent that day and almost 2 percent the next. And, along with much of the health care sector, it has been on a downward trend for the past few months.

What’s wrong with the stock? It has nothing to do with the company’s short-term profit outlook, which is splendid. But like other health care companies, UnitedHealth is confronting a major political problem: the ascendance of “Medicare for All” as a lodestar for the Democratic Party.

Medicare for All isn’t a new idea. It may be defined, basically, as universal health insurance under a single government-run, taxpayer-financed plan. It would certainly alter, and probably limit, the role of private health insurance companies like UnitedHealth. Senator Bernie Sanders of Vermont has supported the idea for years. But it wasn’t much of an issue for investors because it never went anywhere in Congress.

When he introduced a new version of his Medicare for All legislation in the Senate on April 10, the stock market noticed that his co-sponsors included at least four Senate Democrats who are also running for president: Kirstin Gillibrand of New York, Cory Booker of New Jersey, Elizabeth Warren of Massachusetts and Kamala Harris of California.

It’s far too early to divine whether Medicare for All — particularly a version that bans or severely limits private insurance — has even a modest chance of coming into existence after the 2020 election. Even now, amid all the hoopla, the odds may not be propitious.

The current Democratic leaders in Congress — Senator Chuck Schumer of New York, the minority leader, and Nancy Pelosi of California, the House speaker — have not supported it. President Trump and Republican leaders in Congress have been demanding a smaller government role in health care, not a larger one. And the giant health care companies, which have enormous wealth and influence, are, for the most part, committed to blocking the idea.

Now, however, Mr. Sanders is the front-runner among the announced aspirants for the Democratic presidential nomination. What’s more, he appears to have moved the entire political conversation into territory that is exceedingly uncomfortable for health care companies.

But that hasn’t stopped the stock market from acting as though Medicare for All were just around the corner.

In a note to clients on Wednesday, Stephen Tanal, a Goldman Sachs analyst, said that fear of government intervention would probably weigh on health care share prices “perhaps until the presidential election itself.” Because many of the companies’ current business models are solid, he added: “It seems likely to us that the trough should occur well before the November 2020 election — assuming, of course, that the market likes the ‘signposts’ that occur between now and then — specifically, in this case, the ‘spot’ probability of single-payer policy that would actually ban the sale of private health insurance.”

For the moment, though, as Democratic candidates embrace Medicare for All, the stock market is shunning health insurance companies like UnitedHealth, Anthem, Centene, Cigna and Humana. Hospital groups like Tenet Healthcare and HCA Healthcare have been caught in the downturn, too, under the assumption that their revenue could be squeezed if the federal government is the country’s “single payer.”

Comments by David Wichmann, UnitedHealth’s chief executive, during an earnings call on Tuesday, appear to have focused market attention on the issue, which made matters worse. He began his prepared remarks to Wall Street analysts with a direct attack on Medicare for All.

“The wholesale disruption of American health care being discussed in some of these proposals would surely jeopardize the relationship people have with their doctors, destabilize the nation’s health system, and limit the ability of clinicians to practice medicine at their best,” he said. “And the inherent cost burden would surely have a severe impact on the economy and jobs, all without fundamentally increasing access to care.”

After his remarks, the company’s shares plunged, and the decline spread to other companies.

Data from Bespoke Investment Group shows that the damage to health care stocks became much more acute on Tuesday and Wednesday. On those days, according to Bespoke, the health care sector, dominated by UnitedHealth, underperformed the S&P 500 by its widest margin since April 2009. Investors’ aversion to health care stocks was far greater than it was for any other market sector, using a common measure: the degree to which its share price has dropped below its 50-day moving average.

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The difference, or spread, between the market’s aversion to health care stocks, the most-hated sector, and its attraction to financial services, the most-loved, was extraordinarily wide. The polarization was greater than it has been for 99.93 percent of all trading days in the American stock market since the start of 1990, Bespoke found. When such extremes in market sentiment have occurred in the past, the depressed sector has rarely bounced back quickly, Paul Hickey, a Bespoke founder, said in an interview.

“When momentum is this extreme, it often takes some time to recover,” he said.

A Bloomberg article compared the rout in health care stocks to the “‘Dark Days’ of the Financial Crisis,” when, in addition to the crisis afflicting the overall stock market, the sector grappled with uncertainty over what, eventually, became the Affordable Care Act, a.k.a. Obamacare.

But as I’ve written, the Affordable Care Act turned out to be a boon for managed care companies, which profited handsomely despite continuing to gripe about the government’s expanded role.

In the 10 years through March, for example, UnitedHealth’s shares returned 1,345 percent, including dividends, dwarfing the 376 percent total return for the S&P 500. UnitedHealth trailed Apple’s total return of 1,593 percent and Amazon’s, 2,649 percent, but it was far better than Google (now a unit of Alphabet) at 596 percent.

At some point, stocks that fly that high simply drop in value. For health care stocks, this may just be one of those times.

But if profits for major health care companies remain strong, as expected, their share prices could begin to stabilize. And if the presidential cycle starts to shift in their favor, they could resume their path upward.

It’s even possible that many health care companies, which already do extensive government business, could find ways of prospering under some version of Medicare for All, especially one that reserves a substantial role for private companies.

It has been an awful stretch for health care stocks. But it would be foolish to underestimate the companies’ ability to adapt under duress and to ultimately profit, no matter who is in power.

Informational Source

Patients undergoing shoulder replacement surgery who have Medicaid, Medicare or no health insurance, had higher complication rates as compared to patients who had private insurance.

The findings, which appear in the Journal of Shoulder and Elbow Surgery, demonstrate disparities in acute postoperative outcomes for shoulder replacement surgery based on insurance status.

Shoulder replacements (arthroplasties) are recommended for patients suffering from various conditions, including shoulder arthritis, irreparable rotator cuff tears and fractures. The primary goal of the procedure is pain relief, with a secondary benefit of restoring motion, strength, function and returning patients to an activity level as near to normal as possible.

Using a large, national administrative database (The Healthcare Cost and Utilization Project Nationwide Inpatient Sample), the researchers analyzed more than 100,000 cases (68,578 Medicare; 27,159 private insurance; 3,544 Medicaid/uninsured and 4,009 other) of patients undergoing shoulder arthroplasty (partial or hemi, total, and reverse) procedures. Overall, the perioperative medical and surgical complication rate was 17.2 percent and the mortality rate was 0.20 percent. However, they found that there was a significantly higher rate of medical, surgical and overall complications among Medicare (20.3 percent) and Medicaid/uninsured (16.9 percent) patients compared with privately insured (10.5 percent) patients. When the data was matched and analyzed, the researchers found no differences in the complication rates between Medicaid/uninsured and Medicare patients. However, both the Medicaid/Uninsured and Medicare patients had significantly more medical and surgical complications when compared to the privately insured patients.

According to the researchers, this discrepancy in the complication rates may be the result of a lack of access to both preoperative and postoperative care due to poor socioeconomic status or education level for patients that have government sponsored insurance. Additionally, patients with Medicaid or no insurance may lack access to high volume shoulder surgeons, which may also contribute to the higher complication rates. The authors also found that patients with private insurance are likely to go to higher volume hospitals to have their elective shoulder replacement surgery done.

“Studies in the literature have shown that patients with Medicaid or no insurance have a higher mortality rate after penetrating trauma compared to private insured patients. Patients with Medicaid also have higher medical complication rates after spine surgery. We report similar findings that patients with government-sponsored insurance are more likely to have medical and surgical complications compared to privately insured patients after shoulder replacement surgery. Thus, insurance status should be considered an independent risk factor for medical and surgical complications in patients undergoing shoulder replacement surgery.” said corresponding and first author Xinning Li, MD, assistant professor of orthopaedic surgery at Boston University School of Medicine.

Li believes future research should focus on both clinical and socioeconomic factors to determine the reason for possible differences in the postoperative complications and outcomes in patients after shoulder replacement surgery between government sponsored and private insurance.

“Understanding that disparities in patient care exist is an important first step. Patients with no insurance or Medicaid/Medicare insurance do not have the same access to care compared to someone with private insurance. The next logical question to ask is why these disparities exist, and subsequently, what can be done to eliminate its occurrence to improve patient care while minimizing postoperative complication,” added Li, an orthopedic surgeon that specializes in sports medicine and shoulder reconstructive surgery at Boston Medical Center.

This study was done in collaboration with researchers from the University of Wisconsin School of Medicine (Dr. Paul Yi), University of California San Francisco School of Medicine (David Sing, B.S.), New England Baptist Hospital (Dr. Andrew Jawa), Medical University of South Carolina (Dr. Josef Eichinger), and the University of Michigan School of Medicine (Dr. Joel Gagnier and Dr. Asheesh Bedi). David Veltre, M.D. is a resident in Orthopaedic Surgery and Antonio Cusano, B.S. is a medical student at the Boston University School of Medicine.

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This is very big news. One of the key questions about the new Democratic majority was whether Congress would try to play it safe, backing down on big ideas about reform, especially on health care. You can view the whole chorus about how we’re still a “center-right nation” as an attempt by the usual suspects to scare Democrats into scaling back their ambitions.

But now Max Baucus — Max Baucus! — is leading the charge on a health care plan that, at least at first read, is more like Hillary Clinton’s than Barack Obama’s; that is, it looks like an attempt at full universality. (The word I hear, by the way, is that Obama’s opposition to mandates was tactical politics, not conviction — so he may well be prepared to do the right thing now that the election is won.)

So this looks very good for the reformers. There’s now a reasonable chance that universal health care will be enacted next year!

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Life Happens and LIMRA have published survey results highlighting a serious financial services market analysis problem: American survey takers appear to be hazy about what financial services products they own — and more reliable comparison numbers are hard to find.

The groups focused attention on survey takers’ awareness gap in a batch of data from their 2019 Insurance Barometer Study, which was based on an online survey of about 2,000 U.S. adult consumers who are financial decision makers in their households.

The survey team asked the participants about their ownership of various types of financial services products.

Here’s what the survey team found participants thought they owned:

• Life Insurance: 57%.
• Disability Insurance: 20%.
• Long-Term Care Insurance (LTCI): 15%.
• Annuities: 12%.

One difficulty with interpreting the data is that the survey team did not say in the survey results summary available to the public how, or if, they defined the product types for the survey takers. Some survey participants, for example, might have been referring to life insurance policies or annuity contracts with long-term care benefits options when they answered the question about LTCI ownership.

But the ownership rates reported for disability insurance and annuities appear to be low, and the ownership rate reported for LTCI appears to be high.

Disability Insurance

The Council for Disability Awareness has reported that about 49% of U.S. workers get some kind of employer-paid disability insurance from their employers.

Annuities

Gallup reported in 2017 that 26% of all investors have annuities of some type. Gallup classified people as investors if they had investments of $10,000 or more.

FINRA reported in 2016 that 33% of the people who participated in an investor survey said they owned annuities. FINRA did not say what percentage of the total population could be classified as investors.

LTCI

The American Association for Long Term Care Insurance has estimated that about 7 million Americans, or about 3% of financial decisionmakers, might have stand-alone LTCI coverage.

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• A startling 75 percent of Americans over 65 live with multiple chronic health conditions, ranging from diabetes to dementia.
• The nation’s strained health-care system is trying to keep sick seniors out of hospitals, assisted-living facilities and nursing homes and instead have them cared for in their homes.
• The U.S. spent an estimated $103 billion on home health care last year, according to the Centers for Medicare & Medicaid Services.
• Overall employment of in-home aides is projected to grow 41 percent from 2016 to 2026 — translating to 7.8 million job openings.

We keep hearing the foreboding statistics: 10,000 baby boomers in the United States turn 65 every day; our aging population is expected to double in the next 20 years and swell to 88 million by 2050; 75 percent of Americans over 65 live with multiple chronic health conditions, ranging from diabetes to dementia.

It is no secret, either, that the nation’s already-strained health-care system is trying to keep sick and longer-living seniors out of hospitals, assisted-living facilities and nursing homes and instead in their own homes, which is where they want to live out their golden years. But that has shifted the care giving burden onto family members, who are increasingly stressed and often supplemented by personal-care aides (also referred to as certified nurse assistants, personal-care assistants or home health aides) employed by thousands of home-care agencies across the country. Nurses and other skilled practitioners manage in-home medical needs, such as administering medications and wound care, while the personal-care aides cook, shop, clean, bathe, dress and generally offer companionship.

The U.S. spent an estimated $103 billion on home health care last year, a number predicted to reach at least $173 billion by 2026, according to the Centers for Medicare & Medicaid Services, which put total health expenditures in 2018 at about $3.67 trillion. CMS, veterans programs and private health insurance cover a portion of in-home care, although the estimated value of unpaid care provided by family caregivers added an astounding $470 billion to the mix, according to a 2016 report by AARP — not to mention the drain on family budgets and seniors’ nest eggs.

Looking to alleviate these daunting financial burdens, lawmakers in several states, including California, Arizona, Wisconsin and Rhode Island, have proposed providing state income tax credits for families that need help with home care giving.

As all of these realities coalesce, we’re starting to hear warnings about the fact that while the demand for all types of home health-care workers skyrockets, the supply cannot keep pace. This presents a looming national dilemma for the workforce and entities that hire, train and try to retain them, as well as the public and private sources that pay them. Consider, too, that while the Trump administration pursues its stringent anti-immigration agenda, one-quarter of these workers are immigrants — and the possibility that draining that labor pool could further intensify the shortage problem.

“We are on the edge of a crisis,” said William Dombi, president of the National Association for Home Care & Hospice, a trade association in Washington that represents 33,000 home-care and hospice organizations. “We are not prepared for what’s coming. Our concern is that the demand is going to outstrip the supply unless we see some dynamic changes occur.”

A profession in need of reform

Dombi agrees with other home health-care experts who advocate for better compensation, benefits, training and advancement opportunities for personal-care aides. But he also insists that a huge part of the problem is that the profession simply doesn’t get the respect it deserves. “These are workers taking $10-an-hour jobs, often without benefits, to provide services to extremely vulnerable people, doing work that 99.9 percent of the population would like to avoid doing,” he said. “There has to be a change in our culture to respect these workers and hold their jobs in high esteem.”

The federal Bureau of Labor Statistics compiles data on this workforce, combining both home health aides (skilled nurses) and personal-care aides. As of 2016, they numbered 2,927,600. In 2018 their median pay was $11.12 per hour. Overall employment of in-home aides is projected to grow 41 percent from 2016 to 2026 — translating to 7.8 million job openings — a much faster clip than the average 7 percent for all occupations. Nearly 60 percent work full time; turnover rates are around 50 percent.

Because a growing number of large employers — including Amazon, Target and McDonald’s — and some states have raised minimum wages up to $15 per hour, or are attempting to, there is increased competition for low-paid workers, more so considering the tight labor market. Meanwhile, federal and state governments set fixed reimbursement rates for Medicare and Medicaid recipients, effectively capping workers’ wages, and there’s little political will to raise rates. Plus, part-time workers seldom receive overtime pay, health insurance or other benefits, making the profession even less attractive.

According to the Paraprofessional Healthcare Institute, a New York-based organization that studies the home health industry nationwide, 46 percent of this workforce is ages 45 to 64, 87 percent are women, 60 percent are people of color, and 29 percent are immigrants, though how many are undocumented is unknown.

Every state legislates its own hiring and training rules and regulations for home health workers, but typically the job requires a high school diploma or equivalent and no related experience. If the employer is reimbursed by Medicare or Medicaid, federal law requires aides to receive 75 hours of training, including 16 hours of on-the-job instruction. States can then choose whether to mandate additional training. Private agencies that do not accept Medicare or Medicaid, as well as families and individuals who opt to hire aides at their own expense, are not subject to certification requirements.The family caregiving burden

Beyond alarming statistics, the real-life aspect of this issue is that nearly everyone these days seems to have a hardship story to tell about caring for an elderly spouse, parent, sibling or friend, like the following one. Details were provided by family members, who requested anonymity.

By the time Elizabeth was diagnosed with end-stage chronic obstructive pulmonary disease at age 83, the limited money her late husband left her was dwindling. Her three children agreed she’d remain in her condo, despite the high rent, and they’d tag-team as caregivers — a laudable task considering their mom was housebound, on oxygen 24/7 and increasingly frail and dependent. Plus, they all had full-time jobs.

As the months passed, caregiver stress kicked in, until the family decided they needed outside help. For 14 months Medicare covered Elizabeth’s in-home hospice care, daily for three hours, but not the $26 per hour for the half-dozen personal-care aides from local agencies who intermittently relieved her children. While the aides were generally reliable, there were numerous last-minute cancellations, and a couple of aides had to be replaced after Elizabeth complained they were “mean.”

Her funds nearly depleted, Elizabeth was preparing to move in with her daughter and husband across town, when she fell twice, leaving her bedridden and too weak to travel. That necessitated a 24/7 live-in aide, who cost $280 a day out of pocket for nearly six weeks. When Elizabeth died at 86, she was essentially broke.

Although her family was proud of the care they’d provided and forever grateful to the aides — a few attended her memorial service — Elizabeth’s experience serves as a microcosm of what ails the home health-care system, particularly its workforce. Finding a cure is becoming critical as this supply-and-demand quandary escalates.Expanding scope-of-practice laws

In his 2017 book “Who Will Care for Us: Long-Term Care and the Long-Term Workforce,” MIT Sloan School of Management professor Paul Osterman confirms the dire numbers portending an upcoming worker shortage. And he agrees that wages and benefits must improve. Yet the most prudent pathway, he contends, is to change what are known as scope-of-practice laws and allow personal-care aides to receive additional training and permit them to take on certain medical duties — such as managing diabetes, Alzheimer’s care and physical therapy — currently performed by nurses and other skilled practitioners per individual state laws.

This fundamental change would not only raise the stature of the profession, increase compensation and address shortage issues by attracting new hires, Osterman said, but “it would also save the health-care system money by keeping people out of hospitals and nursing homes.”

“And the money to pay for upgrading skills would come from those overall savings,” he added.

AARP, which represents nearly 38 million Americans over 50, vigorously promotes in-home health care yet also recognizes the shortfall in the workforce. “That’s why family caregivers have to keep stepping in,” said Susan Reinhard, senior vice president and director of the AARP Public Policy Institute. Acknowledging, too, that people are not clamoring to become a personal-care aide, the organization also advocates for expanding scope-of-practice laws. “We are working on that at the state level,” she said.

Reinhard cautioned, however, about possible resistance from nursing unions “that feel only nurses should be able to do certain things.” She countered, though, that upgrading in-home aides wouldn’t necessarily disrupt the nursing profession as a whole. Rather, the newly skilled aides would simply be better able to offer a wider range of services for individuals in their homes.

Besides, while not on site, nurses and physicians would still supervise aides in acute-care situations. And, by the way, “that also helps family caregivers, who wouldn’t have to run home to give a medication because the aide isn’t allowed to,” Reinhard said.The big immigration quandary

Immigration issues erupting throughout the U.S. culture and economy have spread to the home health-care industry, where 1 in 4 aides hails from another country, according to Paraprofessional Healthcare Institute. As public anti-immigrant sentiments fester and proposed federal policies to severely restrict immigration gain traction — especially among low-skilled immigrants — workforce shortages in the industry could be further exacerbated.

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