The price that the United States has to pay for being one of the most socially advanced nations is high-risk emergencies from sexual offence, depression and obsessive compulsive disorder. The country relentlessly puts up a fight against these medical issues that call for privacy, anonymity and home-based or Outpatient care. That’s not all. The recent national epidemic of Opioid abuse and President Trump’s fresh “tough on crime” policies to curb it are likely to increase the need for Outpatient rehab centers.
Per Future Market Insights, the global Outpatient clinics market is expected to witness a CAGR of 4.3% and reach $39,000 million by 2022, with America as a strong contributor.
Here we discuss how Medical Outpatient and home healthcare have been creating opportunities for investors keen on parking their money in the healthcare space.
What is Driving the Medical Outpatient Market?
Growth of the global Outpatient clinics depends on various macroeconomic factors. A research report by Fierce Healthcare suggests that Outpatient care makes up at least 40% of the net U.S. health system spending.
Cost Effectiveness of the Outpatient Services
Notably, all the Outpatient and home-based care include immediate curative measures and do not require patients to stay for long hours at clinics or hospitals.
The primary advantage of the Outpatient market is the huge service costs of the fancy healthcare organizations that are generally avoided by lower income groups. Middle-class Americans, i.e. more than 62% of the total population prefer visiting the Outpatient clinics to reduce out-of-pocket expenses.
Technological Advancements
The rapid adoption of the Outpatient services can also be attributed to technological advances, which has made procedures quicker and less complicated.
Outpatient Rehab & Treatment Centers
A research report by the Transparency Market Research suggests that Americans are increasingly getting addicted to a variety of drugs, which are affecting health and family to a large extent. Outpatient rehabs have a major role to play, since treatment is comparatively cheaper than the inpatient and residential treatments.
In this regard, MedTech behemoth DaVita Inc DVA deserves a mention. In 2017, The Everett Clinic, a division of DaVita, received the Washington State Medical Association's (WSMA) highest award for patient safety in the category of excellence for their chronic opioid therapy work.
DaVita’s internal efforts to curb unsafe opioid prescribing have been successful. The stock has a Zacks Rank #3 (Hold).
So, here we take a look at three companies that are poised to gain from the rising influence of Outpatient services in healthcare.
Chemed Corporation CHE
Chemed’s VITAS Healthcare segment provides hospice and palliative care services for patients with terminal illnesses. This type of care is aimed at making a terminally ill patient’s last days comfortable and painless.
Hospice care is available for patients who have been initially certified or re-certified as terminally ill (a prognosis of six months or less) by their attending physician. VITAS offer all levels of hospice care in a given market, including routine home care, inpatient care and continuous care. More than 95% of the company’s revenues are derived through Medicare and Medicaid reimbursement programs.
Chemed carries a Zacks Rank #3. Over the past three months, Chemed has been outperforming the industry. The stock has gained 16.9% compared with the industry’s 14.2% rise.
BioScrip, Inc BIOS
BioScrip has been recording persistent growth in the core Infusion Services business where it has a strong presence and enjoys competitive advantage. BioScrip witnessed consistent growth in this business primarily on account of strong organic growth particularly in chronic, nutrition and other therapies.
To bolster the Infusion services business, BioScrip has taken a number of steps to focus on the core Infusion business.
In the past three months, BioScrip has outperformed the industry it belongs to. The company’s shares have returned 14.3%. The stock has a Zacks Rank #3.
Quest Diagnostics Incorporated DGX
We are upbeat about the long-term growth prospects that are expected to deliver positive outcomes in the upcoming period. With baby boomers moving into Medicare and living longer, the company is benefiting from population growth and favorable demographics.
Esoteric testing business is growing rapidly as physician medicine drives demand for advanced esoteric tests. Per an analysis by Research and Market, the global clinical laboratory testing market is expected to reach $198.5 billion by 2024.
Year to date, Quest Diagnostics has outperformed the industry it belongs to, with 11.7% returns. Currently, it carries a Zacks Rank #3.
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