GMO’s Focused Equity team challenges the prevailing narrative around U.S. health insurers, arguing that managed care organizations (MCOs) are vital, misunderstood players in a complex healthcare system—and currently undervalued by the market.
Key Insights:
- Misplaced Criticism: Health insurers often bear the blame for system-wide issues driven by providers and payers, despite limited margins and regulatory oversight.
- Defensive Positioning: MCOs provide scale, cost efficiency, and proactive care models (e.g., Medicare Advantage), driving value for patients and payers alike.
- Pharmacy Benefit Managers (PBMs): Often scapegoated for rising drug prices, PBMs play a critical role in cost control via negotiation and formularies.
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