Houston, we might have a problem

Net Profit Margins in the Healthcare Sector

Drug Manufactures, General ==> 13.1%

Drug Manufactures, Specialty and Generic ==> -63.5%

Healthcare Plans ==> -16.2%

Health Information Services ==> -25.7%

Medical Care Facilities ==> -5.9%

Medical Devices ==> -46.6%

Medical Distribution ==> 3.6%

Medical Instruments and Supplies ==> -14.2%

Healthcare Plans

One challenge faced by Healthcare Plans involves growth in new services that government agencies insist MUST be covered. Trans-gender procedures, drugs and therapy come to mind.

Another challenge involves having to cover preexisting conditions like HIV.

It is possible that rates might be subsidized via government grants for lower income families after-the-fact. That is, the healthcare insurance provider runs a loss and then submits vouchers to get reimbursed.

Medical Care Facility challenges

Major hospitals face a couple major issues. One is that during the Covid shutdowns, many doctors figured out that they don't HAVE to send patients to the hospital for basic testing if they have their own equipment. It proved more profitable (and convenient) for the doctors to take their own X-Rays, for instance. That deprived hospitals of "procedures" that they relied on to spread the overhead.

Another challenge is that the recent surge in immigrants uses the Emergency Room as their primary interface to get medical care. E-Rooms are a very expensive way to deliver medical care...and the immigrants typically have no healthcare insurance nor other means of paying for the services.

Step-down Facilities are hammered with staffing issues. While hospitals have lots of nurses, doctors and technicians, step-down facilities have CNAs (Certified Nursing Assistants) and "aides" and "orderlies". Those jobs involve dealing with human feces, vomit, infections, disturbed (sometimes abusive) patients, hoisting bodies and making beds. Many of the CNAs were people working toward their RN or building up their resume after graduating from college...and paying off their student debt or recent immigrants happy to work menial jobs while developing other skills. Step-down facilities are revolving doors for employees and are struggling to find people who are willing to work for the wages set by heathcare reimbursements and legally mandated staffing levels.

Locally, we see continued "rationalizing" of the medical service providers as local less-efficient providers are absorbed by equally inefficient providers with deeper pockets.

This does not end well and the only thing you can do about it is to stay healthy and minimize interactions with the medical establishment.

The three laws of thermodynamics

You cannot win.

You cannot break even.

You have to play the game...but you can influence the AMOUNT you play the game.

A very humble example

I used to have a couple slices of peanut-butter toast in the morning. Peanut butter usually contains hydrogenated peanut oil and sweeteners like high-fructose corn syrup. 

I switched to dry-roasted peanuts. No hydrogenated peanut oil. No sugar(s).

Even little changes make a difference.