Biotech Values

[DewDiligence]

Re: Government healthcare / the Middleman Quotient

Here’s a statistic that I find compelling and perhaps others do too. At the large healthcare conferences for investors, such as the JPM event held each year in January, about one-third of the presenting companies are in some kind of non-product middleman business. These include traditional managed-care firms, Medicare Advantage contractors, pharmacy-benefit managers, and consultants to all of the above. In other words, in today’s US healthcare industry, the Middleman Quotient (MQ) is approximately 0.33.

Under a government-run healthcare system, I presume that the MQ would be less than 0.33, although I have no idea how much less it would be.