Should investors bail?
Maybe not. Companies go through this sort of thing, especially as they mature. Decide for yourself if they are executing well and/or if a debt-laden stock buy-back is wise.
In addition, according to this report, PriceWaterhouseCoopers, predicts overall health care inflation will continue to rocket. While we can argue endlessly about the wisdom of (or evidence for) investing in programs that seek to avoid the a) development of chronic illness and b) occurrence of costly complications in those with chronic illness, the Disease Management Care Blog is still bullish on commercial disease and care management/coordination programs. They package and deliver simple-to-understand interventions that have far greater virtue to the average purchaser than building more wings on more hospitals, clustering more specialists in the suburbs or taking even more pictures and having no idea what to do with the information.
And then there is the obesity epidemic. According to the WSJ Blog, there is a Credit Suisse report that identifies Healthways as one company that stands to profit handsomely in this arena. In the opinion of the DMCB, the same is true for all of the industry – just about all the vendors offer some program in obesity management.
Short term? Treasuries n’ commodities. Long term, the DMCB thinks disease management is still a good bet.