Health Care ETF (IHF) in Focus as Costs Runs Wild at Molina
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Dow Jones U.S. Health Care ETF (NYSE: IHF) could see action today as shares of Molina (NYSE: MOH) gets slammed. Molina shares are under heavy pressure after withdrawing 2012 financial guidance as premium revenue associated with the STAR+PLUS contracts in Texas fall short of soaring costs.
According to recent research by PwC's Health Research Institute, the cost of U.S. healthcare services is expected to rise 7.5% in 2013, more than three times the projected rates for U.S. inflation and economic growth, but data for the past three years suggest an extended slowdown in healthcare inflation from earlier decades when annual costs rose by double-digits.
"We're in the early beginnings of a shift toward consumerism in healthcare. And we think that you'll see more of that in the coming months and years," said Ceci Connolly, the health institute's managing director.
IHF is trading positive in early trading on Tuesday as broader markets move higher. Molina shares last traded at $18.81, down 27 percent.
According to recent research by PwC's Health Research Institute, the cost of U.S. healthcare services is expected to rise 7.5% in 2013, more than three times the projected rates for U.S. inflation and economic growth, but data for the past three years suggest an extended slowdown in healthcare inflation from earlier decades when annual costs rose by double-digits.
"We're in the early beginnings of a shift toward consumerism in healthcare. And we think that you'll see more of that in the coming months and years," said Ceci Connolly, the health institute's managing director.
IHF is trading positive in early trading on Tuesday as broader markets move higher. Molina shares last traded at $18.81, down 27 percent.
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