How to Profit from the Transformation of Medicare

One of the most game-changing new strategies in health care promoted by the Affordable Care Act, better known as Obamacare, is the introduction of value-based health care. This marks a critical shift from the current fee-for-service system, in which providers are paid for each test and procedure, toward a system that rewards providers based on patient health outcomes.

The law's architects hope that this shift will both improve the quality of care and reduce ballooning Medicare costs. With the Office of the Inspector General for the Department of Health and Human Services reporting that medical errors and general "bad care" contributed to over 180,000 Medicare deaths in 2010, pressure has been building to produce a fix.

Accountable Care Organizations, or ACOs, are the centerpiece of Obamacare's strategy for bending the Medicare cost curve and hopefully improving patient health outcomes. The Centers for Medicare & Medicaid Services, or CMS, recently released data from the first year of the ACO program. Given Medicare's size and pricing power, the results of the Medicare experiment with ACOs may fundamentally transform the U.S. health care system.. On this Friday's episode of Market Checkup, Motley Fool health care analysts David Williamson and Michael Douglass discuss the results and how investors can best profit from this health care megatrend.


Do you know how Obamacare's other provisions will affect your investments?
Obamacare seems complex, but it doesn't have to be. In only minutes, you can learn the critical facts you need to know in a special free report called "Everything You Need to Know About Obamacare." This FREE guide contains the key information and money-making advice that every American must know. Please click here to access your free copy.

The article How to Profit from the Transformation of Medicare originally appeared on Fool.com.

David Williamson owns shares of UnitedHealth Group. Michael Douglass has no position in any stocks mentioned. The Motley Fool recommends UnitedHealth Group. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2014 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.


Increase your money and finance knowledge from home

Investor’s Toolbox

Improve your investing savvy with the right financial toolset.

View Course »

Asset Allocation

Learn the most important step in structuring an investment portfolio.

View Course »

Add a Comment

*0 / 3000 Character Maximum