The healthcare industry underperforms the S&P 500 index for the third consecutive year in 2021

The healthcare industry underperforms the S&P 500 index for the third consecutive year in 2021

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According to an analysis by SVB Leerink, the performance of the healthcare industry in 2021 has lagged behind the S&P 500 for the third consecutive year, and the industry’s share of the S&P 500 is at its lowest level since 2013.

The report found that poor performance in the fields of biotechnology and digital health dragged down other areas of the industry. These losses were partially offset by strong growth in healthcare providers, insurance companies, and life science tools and diagnostics. Overall, SVB Leerink found that as of December 17, healthcare companies have risen by 22% in 2021, while the S&P 500 has risen by 24%.

In the healthcare sector, life science tools and services have the highest growth rate in 2021, at 35.5%, which is the same as the industry’s performance in 2020. Followed by health care providers and services, an increase of 30.7%, more than double the performance in 2020.

According to the report, the performance of both biotechnology and technology in 2021 lags behind the market.

SVB pointed out in the report: “Health Technology has ushered in the Icarus moment and returned to reality in 2021, which has dropped by 30% since February.” On Monday, SVB analysts could not comment further on the report.

SVB predicts that 2022 will bring new challenges. Major obstacles in the coming year include interest rate hikes, high inflation and slow earnings growth, especially for large biopharmaceutical companies. COVID-19 will continue to drive up labor costs for healthcare providers, despite SVB points out November preliminary ban The suspension of President Joe Biden’s federal vaccine authorization has quelled the industry’s anxiety. For-profit hospital chains HCA Healthcare and Tenet Healthcare followed the ruling and suspended company-wide requirements in states that were not authorized.

However, SVB said its analysts believe that healthcare providers are pricing their 2022 budgeted clinical salary increase at 4% to 6%, higher than the usual 2% to 3%. Although SVB points out that surgical activities are picking up, COVID-19 may also cause more delays in care next year.

An emerging theme will be disagreements within the technical support provider’s department. SVB believes that “significant structural changes” will bring risks to insurance companies and create opportunities for so-called payers. The report pointed out that every 1% of Medicare Advantage spending represents the potential income of the all-risk medical group between US$2 billion and US$3 billion.

The report said: “We have seen opportunities for investment misalignment, and have seen winners appearing after a significant underperformance.”

From a stock picking point of view, SVB stated that it believes that healthcare “promoters” will perform better than “disruptors”. It singled out doctor-supporting companies Agilon Health and Privia Health as examples of companies that it predicts will perform well in 2022. These technology-driven models do not involve hiring doctors, but collaborate with practices to save money, increase revenue, and share profits.

SVB also wrote that it believes that HCA Healthcare, a hospital chain headquartered in Nashville, Tennessee, will surpass its peers in 2022. This is not surprising, because HCA Still very profitable Throughout the epidemic.

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