Industry research firm IBISWorld has forecast the top 10 sectors that will benefit from the creation of state health insurance exchanges under the new rules released this week by the U.S. Department of Health and Human Services.
With nearly 12 million people expected to buy insurance on the exchanges in 2014 and as many as 28 million by 2019 according to Congressional Budget Office estimates, the 10 sectors expected to benefit most are:
"Several healthcare industries rely heavily on payments from private health insurance. Since much of the healthcare reform legislation is still being debated, the move to issue rules is at least one indication that these industries will ultimately gain from the legislation in regard to having a broader and more stable customer base," said Sophie Snyder, healthcare analyst with IBISWorld.
According to the report, during the preceding five years, these sectors have become increasingly reliant on payment from private insurance. Government payers, such as Medicare, compensate at much lower rates, which often barely cover the cost of services. As a result, private payers have been charged more for these services.
In the ensuing five years, through 2016, IBISWorld predicts especially strong revenue growth and operating profit for specialist doctors, primary care doctors, podiatrists, diagnostic and medical laboratories and emergency and other outpatient care centers. Average growth in these areas is expected to be 5.7 percent annually, up from 4.5 percent in the previous five-year period.
"Revenue is forecast to improve in these industries with the implementation of the exchanges. Moreover, operating profit margins are projected to rise since commercial insurance payments make up a larger source of operating profit than government programs, such as Medicare and Medicaid," Snyder added.
Profit growth in emergency and other outpatient care centers is expected to lead the pack in increases based on the issued rules. Operating profit in this sector is projected to be 9.6 percent of revenue by 2016 versus 8.6 percent in 2012.