Ten healthcare industries are positioned to benefit from rising healthcare costs and reform legislation, particularly the creation of health insurance exchanges, says market research organization IBISWorld in its recent five-year forecast.
The top 10 industries predicted to profit from increased costs and HIEs are:
1. Specialist doctors
2. Primary care doctors
3. Podiatrists
4. Dentists
5. Diagnostic and medical laboratories
6. Pharmacies and drug stores
7. Ambulance services
8. Emergency and other outpatient care centers
9. Hospitals
10. Mental health and substance abuse centers
“Each of the 10 industries derive a significant percentage of income from private individual insurance and will benefit if the health insurance exchange is implemented,” said Sophia Snyder, healthcare industry analyst at IBISWorld.
Revenue is forecast to improve in these industries with the implementation of the health insurance exchanges because commercial insurance payments make up a larger source of operating profit than government programs, such as Medicare and Medicaid, according to IBISWorld. Because government programs often reimburse at rates lower than the cost of care, providers have been charging commercial insurance companies increasingly higher rates in order to make up for the shortfall.
Average growth in revenue and operating profit in the specialist doctors, primary care doctors, podiatrists, diagnostic and medical laboratories and emergency and other outpatient care centers industries is forecast to be 5.7 percent annually during the five years to 2016, up from a previous forecast of 4.5 percent.
Emergency and other outpatient care centers will gain the most in terms of operating margins from HIEs. In 2016, operating profit in the industry is projected to be 9.6 percent of revenue versus 8.6 percent in 2012.