Healthcare Primer

I’m walking right now so can’t give a full explanation, but the reason you aren’t getting a full response is KPIs can be different for every business, there is still a lot of breadth in what you want to cover (which is why you see long sell side primers covering these topics- hard to condense into a paragraph or two), and at the end of the day, some people would consider uncovering these KPIs core to their theses.

But to keep it very general, the core drivers are medical utilization + hospital visits, surgery visits, regulatory restrictions, labor costs, and material costs. For insurance it’s all driven by medical loss ratio (how much customers are using their insurance) and what they can reset prices to higher each year. Also see per member per month, demographics, regulations, share shifts in managed Medicare and Medicaid, etc.. For Medtech it’s all about # of procedures done and market share shifts (sector usually loses price each year so volume gains are important). And then we have been dealing with rate changes/comps on recovery to normal procedure rates + labor issues and cost inflation. Also people love to talk about positive demographics and stuff but it’s more of a backdrop theme than anything super insightful.

The good thing is places like the CMS publish LOTS of data on different things here that you can leverage to track things.

I may have mentioned this in the past, but the best way to get up to speed on the basics of an industry is to crack a few 10ks, earnings, and conference transcripts, and the companies will tell you the basic stuff. Getting to the most important KPIs is part of the research and thesis. To accelerate this try and find some sell side primers on big businesses or coverage initiations on sub sectors if you have access.