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We’re in the midst of earnings season and quarterly earnings calls can often be a staid, scripted affair. Reg FD was not geared for our entertainment, it seems. Occasionally, though, a nerve is struck, a tough question is asked, and a visionary billionaire industrialist tells you what he really thinks of your question. We’ll leave it at that because we stick to our healthcare knitting here at Nephron (with just a splash of Bezos). That’s not to say our coverage’s reports haven’t had their own notable takeaways. A few observations from a very active week:

HUM CFO: (Regrading MA) we will take a balanced approach to membership growth and margin, by offering a compelling product to our members in recognition of the significant rate and tax tailwinds. We also intend to drive meaningful EPS growth in excess of our long-term target of 11% to 15%.

 Why it matters: Companies are not shying away bold growth projections in a government program and that speaks to a comfortable political backdrop.

CI CEO: Today, pharmacy is the most widely used health care benefit…Specialty pharmacy, in particular, is the fastest growing medical cost category. Over the next decade, specialty drug costs are expected to more than triple from approximately $300 billiontoday to more than $1 trillion.

Why it matters: The market hates the ESRX acquisition and Cigna continues to provide data points backing its need for an integrated offering.

HCA CFO: Intensity of service or acuity increased in the quarter with our same facility case mix increasing4.4% compared to the prior year period.. Same facility self-pay and charity admissions increased 10.1% in thequarter, while equivalent admissions increased 7.3%.

Why it matters: We juxtapose these comments because it is starting to look a lot like healthy individuals are dropping from the insured ranks, leaving fewer but higher intensity patients. Within the debate – we think this is the reduction of lower acuity, rather than the increase in higher acuity.

ABC CEO: Importantly, our core Pharmaceutical Distribution businesses are continuing to execute extremely well and are outperforming our initial expectations for the year.

Why it matters:  The weak performance of ancillary businesses has served to obscure strong core wholesaling performance over the last two quarters.  ABC appears to have de-risked PharMEDium and MCK appears to have de-risked International with recent guidance, it will take time to see where CAH Medical will rebase.

CAH CEO: (Regarding generic inflation) We said we’d be down mid-single digits. And we think we might be somewhere between mid-single and high-single digits. But again, still better sequentially and better than last year on where generic deflation is.

Why it matters: Investors sold the distributors on CAH’s modest change to Gx deflation guidance.  However, it is important to note that CAH’s guidance was much more aggressive than its peers (new guidance is in-line with what ABC and MCK have been reporting) and the market appears to have missed CAH’s comment on ABSOLUTE IMPROVEMENT sequentially and year over year. 

CERN CEO: Our mixed results and revised outlook reflect the delay of a large contract and a less predictable end market.

Why it matters: It has taken too long for EMR vendors to accept the reality of the marketplace with the result being that growth expectations have been reset not via guidance but via missing guidance.  Nonetheless, we see upside to current multiples with the key to unlocking appreciation being right sizing expectations and demonstrating consistency. 

MCK CEO: Specialty pharmaceuticals represent the vast majority of new innovative therapies coming to market…This care delivery requires greater coordination amongst stakeholders in a much more holistic way, including commercialization services, infusion services, reimbursement support, clinical education and a wealth of clinical data to ensure optimal patient care.

Why it matters: Hammergren spoke to a new market reality when he acknowledged that mix shift toward specialty is margin dilutive on its own (still accretive to absolute profit growth) but provides opportunities for high margin services and support offerings for manufactures and dispensers.

But this is just scratching the surface.  All-in, Nephron Research has published over 30 tools and notes THIS WEEK ALONE aimed NOT at regurgitating the news, but at providing efficient and sharp takeaways based on our decades of perspective. to learn more.