Investing in the Healthcare Sector - Research Paper Example

Health Care Cover letter To Ref: Investing in the Healthcare Sector Here is a report, as requested, on investing in the healthcare Sector, Hospitals are mining patients credit card data to predict who will get sick, and Pharmaceutical industry sponsorship and research outcome and quality: systematic review The report has covered various parameters which the researches were considering while doing their study. Regards, Outline 1. Hospitals are mining patients credit card data to predict who will get sick. 1.1 Consumer Expenditure. 1.2 The Challenge 1.3 Importance of Interacting with patients 1.4 Conclusion 2. Investing on health care sector 2.1 Introduction 2.2 Findings 2.3 Health Insurance 2.4 Hospitals and Clinics 2.5 Other Industries 2.6 Conclusion and Recommendation 3. Pharmaceutical industry sponsorship and research outcome and quality: systematic review 3.1 Reasons 3.2 How the study was done 3.3 Results 3.4 Possible Explanations 1.0 Hospitals are mining patients credit card data to predict who will get sick 1.1 Introduction This paper is a report on how hospitals are using their patient’s credit card information to forecast who will get sick, the opposition and benefits. 1.2 Consumer expenditure Gives a detailed picture health professional patients reach out to high risk patients and propose changes in their lifestyle before they fall sick. Credit card data can for instance be used to tell if a patient is a member of a gym club is eating healthy, is smoking or rapidly gaining weight. A health care professional defends the idea of using credit card data terming it as a predictive model through which health can be drill down. 1.3 The challenge Health chains are not permitted to share information about their customers. Patients are also opposed to the idea since interfere with their privacy and it is also intrusive to receive a phone call from your medical insurer to discuss your daily habits. Health advocates and privacy experts also feel that this will turn the doctor patient relationship from exchange of information to an inquisition of habit. Data brokers have reported that the data obtained from customers is for purposes of marketing and should not be availed to health insurers. 1.4 Importance of interacting with patients As opposed to earlier instances where hospitals were paid more based on number of tests or procedures performed, the Obamacare pays hospitals based on quality metrics. US government is consequently levying taxes on hospitals that frequently readmit patients and reward hospitals that perform well. Because of this, some hospitals have resulted in using patients’ demographic data. 1.5 Conclusion The idea behind the use of credit card data can be beneficial to not only the patients but also the hospitals. The patients will be accountable for their daily unhealthy behavior because of the fear that if they are not, a health professional will question them. Consequently hospitals will reduce readmissions by questioning reckless patients. References Robertson, J & Pettypiece, S. (2014). Hospitals are mining patients’ credit card data to predict who will get sick. Retrieved from 2.0 Investing in the Healthcare Sector 2.1 Introduction The healthcare sector is made up of different industries including the pharmaceutical industry, hospitals and health insurers. Investors can invest in individual industries or the entire sector. The aim of the report is therefore to analyze investment in these industries. 2.2 Findings Pharmaceutical and Biotech companies are prone to positive or negative shocks. Good outcomes increase their stock prices and this is beneficial to the investors. Investors need to consider among other the disease that the drugs treat, patents and availability of substitutes. 2.3 Health Insurers They assume healthcare risks. Investors should be interested in the company’s underwriters, medical cost ratio, management and proper liability services. 2.4 Hospitals and Clinics Clinics have the right to select the patients they treat and are therefore able to profit more from insurance companies. Hospitals are however required by the U.S law to treat all patients regardless of their ability to pay; they are therefore faced by bad debts. They are hence not technologically advanced. 2.5 Other Industries Pharmacy Benefit Managers These are companies that administer drug benefits on behalf of the insurer. They benefit more from email transactions, drugs that are injected, specialty drugs or drugs that need to be refrigerated. Distributors They act as the intermediaries between the drug manufacturer and the pharmacies. They benefit from service fees and have other lines of business like packaging. 2.6 Conclusion and Recommendations The healthcare sector is made up of many industries which investors can invest in. The sector is attractive to the investors due to high returns but is also faced by numerous risks. It is advisable that investors use investment vehicles like ETFs and healthcare mutual funds; this will enable them diversify and hence reduce the volatility of risks. Reference Zucchi, K. (n.d.). Investing in the Healthcare Sector. Retrieved from: http://www.investopedia.com/articles/stocks/08/investing-in-healthcare.asp 3.0 Pharmaceutical industry sponsorship and research outcome and quality: systematic review The paper examined whether drug studies which are funded by pharmaceutical companies are manipulated to favor them. According to Lexchin et al., (2003), there is enough reasons to believe that most drug research which are funded by pharmaceutical companies favor them. 3.1 Reasons Most of the companies which carry out the research would not like the pharmaceutical companies to have a bad reputation especially when there are other rug companies which are producing the same medicine as these would lead the financier to make big losses. 3.2 How the study was done Study was done on Medline and Embase publications from January, 1966 to December, 2002 and January, 1980 to December, 2002 respectively. The only journal which were included were those which compared the quality of research outcomes of studies sponsored by Pharmaceutical companies and those sponsored by other sources (Lexchin et al., 2003).The authors found 30 articles which met their requirement. The following results were found. 3.3 Relationship between the outcome and source of funding Out of the 30 publications, 26 reported the relationship between the source of income and the outcome. While, 6 articles investigated the effects on publication, 5 articles examined the result of the pharma economic studies and finally 13 determined the relationship between the methodological quality and source of income. 3.4 Results Publications by pharmaceutical companies were less likely to be published than those funded by other sources and if they are published then they are published at a later date compared to those published by other companies. Economic outcomes and the funding source showed that the pharma economic studies which are funded by drug industries had a high chances of reporting test results which favored the financier product compared with other sources. Finally, out of the 13 articles which looked at the relationship between the methodological quality and source of income, none reported that studies sponsored by drug industries were of poor quality. Instead four of the articles showed that pharmaceutical companies sponsored studies had a higher quality compared to the studies sponsored by other financiers. 3.5 Possible explanations First pharmaceutical companies are likely to sponsor drugs which they know are superior when compared to other drugs in the same category. Second, the biased results could because of poor quality research conducted by the industries. Third, selection of a comparator which is a key step in planning critical trials seems to be a key issue. Finally, the delayed publications may be because pharmaceutical companies may be preventing publication of results which do not favor them. Reference Lexchin, J, Bero, L, & Otavio, C. (2003). Pharmaceutical industry sponsorship and research outcome and quality: systematic review. Retrieved from http://www.bmj.com/content/326/7400/1167 Read More