Obamacare Signup Numbers Are Impressive But So Is Another Number

The 30-day hospital readmission rate for Medicare patients has gone down dramatically.  Patients are not being readmitted as much as before. Before 2011 the rate was around 19% it is now around 17.5%. And based on the latest numbers from the nters for Medicare and Medicaid Services,the rate this year is going to come down even more.

This will bring down taxpayer costs more quickly than the number of sign ups to the ACA.  With a 19% readmission rate the costs to taxpayers has been around $26 million.  That number is now going down significantly.

This can most likely be attributed to the penalty that kicked in as a part of the ACA law in 2012.  Hospitals have to pay a penalty for Medicare patients who are readmitted for the same condition up to a threshold.  It seems that hospitals have resorted to other means to keep from paying this expensive penalty: telehealth, remote home monitoring, and drug store clinics.

The stock play on this is several companies who are either directly involved in the telehealth technology or those companies using it like drug stores.  According to IBISWorld the telehealth market is slated to grow at 30% for the next 5 years.  

Here are some potential players:

Rite Aid – RAD

Qualcomm- QCOM

Polycom – PLCM

CVS Caremark – CVS

Cisco - CSCO

Sources: Motley Fool, Office of Information Products and Data Analytics