Fisher Investments on Health Care

MICHAEL KELLY is a Health Care Research Analyst at Fisher Investments. He has a master of science degree in finance from Saint Xavier University and holds the CFA® and CFP® certifications.ANDREW S. TEUFEL has been with Fisher Investments since 1995, where he currently serves as a Vice Chairman. Prior to joining Fisher Investments, he worked at Bear Stearns as a corporate finance analyst in its Global Technology Group. Andrew also instructs at many seminars and educational workshops throughout the United States and United Kingdom, and has lectured at the Haas School of Business at UC Berkeley. He is also the Editor in Chief of MarketMinder.com. Andrew is a graduate of UC Berkeley.

• Foreword ixPreface xiiiAcknowledgments xviiPart I Getting Started in Health Care 1Chapter 1 Health Care Basics 3Health Care Basics 5Health Care Characteristics 7Chapter 2 The US Health Care System 19Why Does It Cost So Much? 20Private Versus Public 25The Regulatory System 30US Health Care Reform 33Chapter 3 Brief Overview of Health Care Systems by Major Countries 37Japan 38Germany 42France 45United Kingdom 48China 52Chapter 4 Health Care Sector Drivers 57Defensive Nature of Health Care 58Innovation and Patent Expirations 61Political/Regulatory Developments 63Part II Next Steps: Health Care Details 67Chapter 5 Health Care Sector Breakdown 69Global Industry Classification Standard 70Global Health Care Benchmarks 71Pharmaceuticals, Biotechnology & Life Sciences 74Health Care Equipment & Services Industry Group 90Health Care Providers & Services 97Health Care Facilities 98Health Care Services 99Managed Health Care 102Health Care Technology 106Chapter 6 Challenges in the Health Care Sector 111Slowing Growth in Mature Markets 112Legislation and Regulation 115Responding to Challenges 119Part III Thinking Like a Portfolio Manager 127Chapter 7 The Top-Down Method 129Investing Is a Science 129The Top-Down Method 132Top-Down Deconstructed 138Managing Against a Health Care Benchmark 145Chapter 8 Security Analysis 151Make Your Selection 152A Five-Step Process 153Important Questions to Ask 161Chapter 9 Make Your Portfolio “Healthy” 169Strategy 1: Adding Value at the Industry and Sub-Industry Level 170Strategy 2: Adding Value at the Security Level 176Strategy 3: Adding Value in a Health Care Sector Downturn 176How to Implement Your Strategy 177Appendix Reference Material 181Notes 187About the Authors 193Index 195