Pulling The Plug On Grandma In Election Year?

The news that US Medicare was demanding pre-approval of hospital stays in 11 states was exposed as ill-informed with consequent recovery of MedTech share prices.

Abstract:

According to London’s Sharecast service, medical technology business Smith & Nephew lost 4p on its share price after it was revealed that US medical programme, Medicare, is refusing to pay for patients to stay in hospital for orthopedic operations in 11 states unless the treatment is reviewed and deemed necessary.  The news was later exposed as ill-informed with consequent recovery of MedTech share prices.

“Any broad attempt at Medicare rationing, ‘pulling the plug on grandma,’ in an election year is likely to be suppressed by politicians, who didn’t appear involved in the decision,”

So what happened?

In a letter between the American College of Cardiology and its members, it was revealed that the Center for Medicare and Medicaid Services will require pre-payment audits on hospital stays for patients who require cardiac care, joint replacements and spinal fusion procedures, as reported on Bloomberg.  This letter saw hospital and medical device companies’ share prices fall on December 2nd, only to rebound when it became clear that the restrictions were only in place in the state of Florida.  The Bloomberg article summarises it; “the program to pre-approve Medicare hospital payments for pacemakers and joint replacements is limited to Florida.”

“An expanded version of Florida’s program is unlikely to take effect this year, wrote Bruce Nudell, an analyst at Credit Suisse in New York, in a note to investors. “Any broad attempt at Medicare rationing, ‘pulling the plug on grandma,’ in an election year is likely to be suppressed by politicians, who didn’t appear involved in the decision,” he said.

The full Bloomberg article can be found here.

Source: Bloomberg, Sharecast

published: December 6, 2011 in: Cardio, Financial, Orthopaedics, USA

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