Put plainly, sometimes what's best for us isn't always fun to do. We love vacations and time with our families because it relaxes us, yet we put off going to the dentist or going to see our doctors despite knowing that it's good for our health and longevity.
According to the Centers for Disease Control and Prevention's National Center for Health Statistics (that's a mouthful), there were approximately 1.1 billion physician office and emergency room visits in 2006. Perhaps even more remarkable is that these visits were accomplished despite there being less than 900,000 licensed doctors in the United States.
Yet, this 1.1 billion visit figure could be significantly higher if we weren't so avoidant of doctors in general. Obviously, not everyone believes in going to doctors or in pharmaceutical cures and would prefer naturalistic practices for treating their medical symptoms. But, for the majority of the population, we should be going to the doctor regularly for preventative purposes, but we often avoid it at all costs.
Let's have a look at three of the most common reasons we avoid seeing our physician and take a closer look at what's being done to deal with that objection within the medical community, as well as how that could possibly affect your own investments over the long run.
Objection No. 1: It costs too much.
There's no denying that medical costs have ballooned over the past couple of decades. Between the consultation with your physician, the diagnostic tests performed, and the potential for prescription medicine as treatment for your visit, the bill is enough to make some patients' jaws hit the floor. In the decade between 1996 and 2006, the average cost of a doctor's visit rose by 51% to $180.
It's not hard to understand why medical costs are rising. For one, there are only so many doctors available to treat patients, so their time is very valuable and costly. The cost for researching new medications isn't cheap, either. Biopharmaceutical companies that focus on treating rare diseases can regularly charge six-figures annually for their drug, so hospitals and clinics need to recoup those costs somewhere along the line. Also, hospitals and clinics need to ensure they cover their own medication and labor costs which can be challenging when uninsured people can't pay their bill.
In other words, cost is a very reasonable objection even if medical cost inflation is currently at its lowest level in five decades.
What's being done to curb the common objection of high medical costs? That would be the implementation of the Patient Protection and Affordable Care Act. Known better as Obamacare, this transformative health reform law is going to make it so insurers can no longer deny coverage to people with preexisting conditions, and will require insurers to spend at least 80% of their collected premium on patient care each year. The end result, when coupled with a more expansive Medicaid program in a number of states, should be millions of newly insured Americans. If Obamacare can successfully court enough young adults to sign up for health insurance it will more than offset the higher costs associated with treating the elderly and most sick patients and should yield lower health care costs for a majority of people.
Within your own portfolio you might see hospitals like HCA Holdings (HCA 0.04%) and Tenet Healthcare (THC -1.57%) among the biggest beneficiaries of Obamacare. Each year hospitals treat a number of patients that either have no insurance or are underinsured and simply can't pay their bill. In 2012, HCA wrote off close to $3.8 billion in uncollectable revenue while Tenet accounted for $785 million of its full-year revenue as doubtful. With more Americans being covered by health insurance, the expectation for the hospital sector is that their doubtful revenue provision will fall which will lead to heftier margins and beefier profits.
Objection No. 2: I don't have the time.
Let's face it -- our physicians' time is valuable, as they could have 20-plus patients to examine in a given day. However, our time is just as important to us as well.
According to a research study published by One Medical Group that was gathered by Kelton Research last year, the average wait time at a doctor's office is 20 minutes. Despite the understanding that your doctor is likely busy, nearly half of all patients surveyed noted irritation if their wait time lasted longer than their visit with their primary care physician. In addition, another 27% of those surveyed responded that they felt rushed to finish their appointment.
What's being done to curb the time objection you might wonder? One of the biggest trends among hospitals and clinics has been a switch away from paper records and toward electronic-health records. At first this might seem like nothing more than space-saving tool, but EHR's have given way to a number of cloud-based software solutions that are geared at helping hospitals and clinics maximize the efficiency of everything from their staff and payroll, to drug delivery, and even revenue cycle management. In short, application software is transforming our nation's hospitals and clinics into a well-oiled and efficient machine that should allow for more people to be seen and treated with a greater level of efficiency and proficiency than ever before.
Looking at some intriguing stock ideas here, I would point out Cerner (CERN) and Quality Systems (NXGN -1.10%) as names you should have on your radar. Cerner is by far the 800-pound gorilla of the sector and recorded a whopping 21% increase in bookings in the third-quarter last week to $928 million. Quality Systems offers a bit more variety in that in addition to hospitals it also delivers cloud-based financial and payroll applications to the dental industry as well. However, both companies offer EHR applications, as well as financial and training tools that will help reduce costs and improve efficiency for hospitals and clinics in the long run. That sounds like a formula for success to me!
Objection No. 3: I'm scared!
I'm not afraid to admit that you can freely add me to this category! The final objection that keeps many of us away from the doctor despite the fact that our physicians are only looking out for our best interests is fear.
According to the aforementioned study from One Medical Group, 64% of polled respondents were afraid to learn of a health problem, 45% of people have kept information regarding their health or activities from their primary care physician, and 60% have considered withholding information from their physician based on the situation. To make matters worse, quite a few respondents noted the fear of being judged by their physician or being embarrassed as a reason for withholding information or simply not going to the doctor in the first place.
What's being done to address some of these objections? Admittedly, personal fears of the doctor are difficult to overcome; however, less invasive diagnostic tests and surgeries, as well as an improving landscape of drugs, are making it far less terrifying to go to the doctor than it was even a decade ago. Previously, going to the doctor to be tested for hepatitis-C or HIV could be an embarrassing and nerve-racking process. Now, diagnostic point-of-care kits can rapidly give patients an answer in roughly 20 minutes. Similarly, some surgeries decades ago that could have included large incisions have been replaced by robotic surgical options that can perform the same surgery with potentially smaller incisions that can possibly lead to a quicker healing period.
There are countless drugs and diagnostic devices making patients' lives less scary these days, but if I were to single out one company to keep an eye on, I would suggest it be Gilead Sciences (GILD 3.82%). Gilead has an extensive line of oral HIV therapies which have greatly slowed the progression of HIV in patients taking Gilead's drugs. In addition, Gilead looks to be on the verge of an approval for sofosbuvir, its oral hepatitis-C medication which can be given with a ribavirin and without interferon for genotype 2 and 3 patients. Intravenous interferon can have the side effect of making a patient feel like they have the flu, so this is a discernible improvement in patient quality of life and all the more reason for patients to not be embarrassed about going to see their doctor.