UNH - 3 Stocks to Buy After Recent Changes to Medicare
More than a million hip and knee replacement surgeries are performed in the U.S. each year. By 2030, that number could reach 3.5 million. The cost of those procedures can range from $30,000 to $50,000 each. The expense has led insurers to embrace cheaper alternatives that avoid the expenses associated with having the surgery done in a hospital.
Insurers, like UnitedHealth Group (NYSE: UNH) , Anthem (NYSE: ANTM) , and Cigna (NYSE: CI) , as well as the Centers for Medicare and Medicaid Services (CMS), have been leaning on health systems to move these procedures to ambulatory surgery centers (ASC) for years. Like much in healthcare, CMS set the tone and insurers followed. In 2019, it added knee replacements to the procedures it covered when performed in an ASC. This past December, it added hip replacements. Those changes came after removing each from a list designating both procedures as inpatient only.
The moves give private insurers the green light to continue aggressively pushing back on hospital-based procedures. That could provide an under-appreciated tailwind to profit margins in the years ahead.
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3 Stocks to Buy After Recent Changes to Medicare