Election Implications (Part 4): Forecasting For Healthcare As The Second Trump Administration Takes Shape

Elements of the new Trump administration are coming into focus as
announcements of key healthcare appointments and nominations
provide indications for what the market can expect starting in
January. To dissect the impact these changes might have, Wall
Street Analyst Jeff Garro joined Keith Figlioli to wrap up a
four-part series of episodes on election implications. Previous
episodes featured conversations with JP Morgan’s Lisa Gill,
Canaccord Genuity’s Richard Close, and Maverick Health Policy’s
Julie Barnes.

Jeff Garro is Managing Director and an equity research analyst
covering Healthcare IT for Stephens, a family of privately held,
independent financial services firms founded in 1933 that’s
focused on building value for companies, state and local
governments, institutions and high-net-worth investors. Prior to
joining Stephens in September 2022 Jeff held research analyst
roles at Piper Sandler and William Blair.

During this conversation, Jeff discussed the policy changes and
broader market signals he’s watching to advise clients on
investments in the healthcare IT market. Some of the topics he
discussed with Keith include:



Balance in management teams. When discussing elements he
looks for in a good investment, Jeff talked about the lessons
he’s learned evaluating management teams. He says companies
need leaders that are great storytellers who can convey their
vision and bring more investors under the tent. But cautions to
stay vigilant for executives who might believe in their own
narrative a little too much and in turn, don’t implement the
right sets of checks and balances within their organization.


Predictions by payer type. One way Jeff is assessing the
market in light of pending regulatory and policy changes is by
breaking it down by payer type. For example, he expects minimal
change in employer-sponsored coverage and a more favorable
environment for Medicare Advantage, when comparing the first
Trump term to the last few years of the Biden administration.
He says Medicaid markets will be harder to predict because
potential for decreased federal funding could create market
pressures, but could also create opportunities where technology
can help. Lastly, he’s considering the individual market and
the potential for ACA subsidies to not be renewed.


Public vs. private markets. While Jeff’s primary role is
analyzing public markets, he talked about how essential it is
to understand innovation and activity occurring in private
markets so he can ask the right questions and avoid being
blindsided as new companies and technologies evolve. He also
discussed the different mentalities of public versus private
investors, and how those in private markets generally have the
ability to be more patient – an advantage as we’re waiting for
the new administration’s nominees to be appointed and
confirmed.


The post-COVID reset. There are a lot of problems to
solve in healthcare – as there always have been – but Jeff also
believes there are a lot of good companies, both public and
private, positioned to solve them. He sees a favorable backdrop
for healthcare investors following the challenging environment
from the global pandemic, and is hopeful that the market has
hit a reset from a performance perspective. He sees a shift
from “growth at all costs” to a more reasonable approach to
sustainable growth and healthy profit margins.



To hear Jeff and Keith discuss these topics and more, listen to
this episode of Healthcare is Hard: A