Which Companies Will Prosper from Healthcare Exchanges?

by George Lunga
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Submitted by George Lunga as part of our contributors program.

With Obamacare looming, more and more companies are moving their workers into either private health exchanges or public health exchanges. These have included some of the biggest entities in a wide range of industries, such as Sears Holding (NASDAQ: SHLD), IBM (NYSE: IBM), Dardin (NYSE: DRI), and Time Warner (NYSE: TMX). While the workers forced to move into public health exchanges look to be the losers, the winners will be the shareholders of blue chips such as UnitedHealth Group (NYSE: UNH) to promising small caps such as Quandrant 4 Systems (NASDAQ: QFOR), that are positioned to profit from the changes in medical treatment in the United States as a result of Obamacare.

That the employees will be the ones to suffer is easily shown by Trade Joe’s just announcing that it would pay each one of its part-time workers $500.00 for being forced into a public health care exchange. If moving to a public health care exchange was preferrable, the employees would be doing it on their own. But that is clearly not the case, due to the opposition that $500.00 is not likely to quell.

It was the same recently at United Parcel Service (NYSE: UPS).

The global package mover is moving more than just parcels and freights: 15,000 spouses of its employees are losing benefits from UPS due to the cost of Obamacare. Needless to say, that action was welcomed as warmly as the Trader Joe’s corporate decision. There is no desire to shift to public health care exchanges by consumers.

What there is a very bullish performance by companies such as Quadrant 4 Systems and United Health Group.

The world’s largest health insurer, UnitedHealth Group is up nearly 40% for 2013. Sales and earnings-per-share are both increasing at a double digit rate. Its most recent rating was an “Outperform” by Oppenheimer.

A software firm, Quadrant 4 Systems has the QHIX, a cloud-based system, to facilitate the actuation of private healt care exchanges. As with UniedHealth, revenues are increasing for Quadrant 4 Systems. Clarke and Company, a leading brokerage firm, recently selected QHIX from Quadrant 4 Systems for its private health exchange.

As a result, the stock price for Quadrant 4 has soared in recent market action.

This should be the result for the future for the shareholders of UnitedHealth Group and Quadrant 4 Systems. More and more firms will likely move to private health exchanges, due to the superiority of the QHIX over the offerings of public health exchanges. From that, revenues should for Quadrant 4 Systems, as the chart below UnitedHealth Group clearly shows.

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