Report: ACA uncertainty hurting healthcare IPOs

Dive Brief:

  • MarketWatch reported that new healthcare public offerings are at their lowest point in five years. There have only been 12 initial public offerings in healthcare this year, the company stated.

  • The number of healthcare IPOs peaked at 42 in 2014 and 30 in 2015 before dropping down to 15 in 2016 and 12 so far this year. Healthcare IPOs since January have accounted for 21.1% of all IPOs, compared to 62.5% of all IPOs last year, according to MarketWatch.

  • The uncertainty surrounding the Affordable Care Act's future is helping drive the lower number, reported MarketWatch.

Dive Insight:

Healthcare reform is causing unease in the industry, as health officials wonder what exactly will change.

There is also the constant controversies coming from the White House, which are starting to affect the stock market. For a while, the stock market seemed to ignore the issues surrounding the Trump administration. That changed this week as stocks dropped after the Justice Department named former FBI Director Robert Mueller special counsel to investigate Trump and his associates and whether they colluded with Russia during the election.

Payers are especially bothered by the anxiety about healthcare reform and an uneasy market. Insurance companies are deciding whether to stay in the ACA exchanges next year. Payers are worried that Republicans may stop funding cost-sharing reduction subsidies that help cover poorer Americans in exchanges. Without that help, payers warn that rates will rise and could lead to insurers leaving the exchanges. Payers have deadlines next month to set rates on ACA exchanges plans.

The Senate is currently working on a healthcare reform proposal after the House narrowly approved the American Health Care Act earlier this month. Senators have said their proposal will probably look quite different than the House version.

Hospitals have known that despite previous failures of ACA repeal, the chance for disruption was still there, Igor Belokrinitsky, healthcare strategist at Strategy&, a member of the PwC network of firms told Healthcare Dive in January.

He said there is also uncertainty around smaller pieces of regulatory changes in the legislation, whether it's around new reimbursement models or health technology as well as certificates of need and Stark laws. There's going to be lingering questions going forward.

Filed Under: Payer Health Law Policy & Regulation
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