[Forbes] But investors might be worried about committing capital to pharmaceutical and managed care companies because we don't know who will be in the White House next year and what that change in administration will mean for these industries.
[Berkowitz] So there is a simple question: Who else will do it? Barack Obama talks about having health care like they have in Congress. Who does the health care in Congress? It's the HMOs. The government can only write a check. When all you can do is write a check, you can't control costs.
When the government is the only one writing a check, it doesn't need HMOs to control costs -- it can simply write a smaller check. That (along with rationing) is essentially how "single payer" systems control costs, and that is the direction in which some mainstream Democrats want to go (for example, my local Congressman, Steve Rothman, has advocated expanding Medicare to everyone). Therein lies the political risk in investing in HMOs, in my opinion.