No matter how you slice it there are more doctors retiring each year than there are newly minted medical school graduates going into the practice of medicine. Whether or not the Affordable Care Act (“Obamacare”) remains the law of the land (electoral outcomes aside, one wonders if the legislation can stand-up under the crushing weight of its costs particularly given the fact that Justice Roberts set the States free from shouldering the cost of setting up and administering public exchanges), there is a shortage of doctors in the United States. If Obamacare stands the test of time, it will introduce nearly 30 million more customers into the healthcare system further exacerbating the physician supply problem. Common sense instructs us that prices increase where demand outstrips supply, and UEI believes that healthcare services innovators will be rewarded over time with higher reimbursement rates set at levels where considerable profits are available to entrepreneurs and investors.
UEI’s thesis in the healthcare services sector is that new healthcare services outlets, and physician practice models, will emerge from this supply/demand imbalance. In addition, the innovation in services models will frame up new customer segmentation boundaries and revenue models. Subscription medicine, membership physician practices, cash only physician practices, outsourced Emergency Rooms, Urgent Care centers, outsourced diagnostic (MRI, CT scans, etc) and orthopedic facilities are all likely businesses and models to experience considerable growth and innovation. UEI is interested in investing in new physician services models and outsourced services situations.