"Certain sub-sectors are much more high-margin, and the more profitable ones may be bigger targets of the government," said Rob Junkin, senior portfolio manager of Evergreen Health Care Fund (EHABX) .
"Democrats can put through whatever they want" because they have the numbers in Congress, Junkin
expects the Senate's proposal to be less radical than the one put forward by the House, the question is whether a public-plan option is in the final bill.
The public option would be a "pathway to getting nationalized health-care in the next five- to 10 years," Junkin
, though, warned that while hospitals should be a "net beneficiary" from any industry makeover, "there's going to be pressure on margins in most of the [health-care] sector's companies."
Chung said reform that helps hospitals earn profits will be less controversial than one that helps insurance companies, while Junkin
speculated that reform would hit the managed care sector -- including insurance companies and HMOs -- harder than any other area of health care.
Managed care is the one area where Junkin
is significantly underweight; he's
most enthusiastic biotech and medical technology.
said cost control is a factor in the stocks he
likes -- companies that can help cut costs are likely to be popular.
Health-care technology provider Cerner Corp. (CERN) is one such outfit, he
said, as streamlining systems should help reduce expenses.