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XMFHelical (< 20)

Position Healthcare for this Trend



December 19, 2013 – Comments (5) | RELATED TICKERS: AFAM , BRLI.DL , MRTX

As a healthcare focused investor, I think it is very important to have a sense of the broad industry trends.  One thing I have tried to focus on is firms that promote productivity and wellness improvements, whereas volume of service plays are a bit less interesting.  This is in part due to the ACA (Obamacare) and its efforts to try to shift the focus to wellness from churn of services.

Helping to feed my confirmation bias on this opinion was a piece today from Planet Money (and NPR podcast).

Overall, the piece is about hospitals addressing cost consideration as part of the ACA legislation (Obamacare). This one is focused on cardiac care, bundled payments, and the efforts in the legislation to move the focus from 'pay for procedure' to 'pay for results'. I encourage a listen to the entire piece. At ~ 9:45, they report on an effort to provide home health care services to one patient being released, an effort that wasn't incentivized so much in the past when a readmission would have meant more money to the hospital rather than less, due to the one time bundled payment.

One reason why I continue to think Almost Family and perhaps other home care organizations are a long term worthwhile investment, though I do own less now after the long awaited recent gains.

On the flip side, I booked my profits on BioReference Laboratories.  They recently guided to lower growth and hinted at tighter margins for their diagnostic services.  While diagnostics should provide better care and help doctors promote wellness, they do benefit from service 'churn' as well.  The piece notes that the doctors were reevaluating the amount and cost of tests they requested.  I think firms like BRLI will do well long term, but the next couple of years may see them setting to a new normal.

In other moves, I added to my Athenahealth position, and took an initial stake in development stage pharmaceutical firm Mirati Therapeutics.  The former should continue to benefit from the mandate for health records, and hopefully sign more and larger groups onto their system.  The latter is another jockey-like speculative investment following Uber-investors Julian and Felix Baker. 


Helical Investor

5 Comments – Post Your Own

#1) On December 19, 2013 at 11:35 AM, portefeuille (98.94) wrote:

A fund manager beating those "Uber-investors" can be followed here :)

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#2) On December 19, 2013 at 11:36 AM, portefeuille (98.94) wrote:

up around 250% over the past two years :)

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#3) On December 19, 2013 at 1:35 PM, XMFHelical (< 20) wrote:


I'm not much of a twitter user and have not followed your activity.  Great for you to have these results.  Your more active style is not so aligned with how I'd personally care to invest.  I'd prefer to have only a small allocation, if any, to development stage biotech, and with a long term focus.



Helical Investor 

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#4) On December 19, 2013 at 2:11 PM, constructive (99.96) wrote:

Appreciate your take on BRLI, it popped up on my radar recently and I was wondering how their competitive position might evolve.

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#5) On December 19, 2013 at 9:04 PM, portefeuille (98.94) wrote:

#3 My "old fund portfolio" actually has a pretty low turnover, maybe 0.3% per trading day (wild guess). And far more than 50% is invested in profitable biopharma stocks. I do admit that quite a bit of the performance comes from the not-(yet)-profitable / development-stage ones :) You should at least become a twitter spectator, you will find quite a few good biopharma guys there :)

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