Show an ad over header. AMP

I am the FIRST

Health insurers, pharma, hospitals register lofty Q2 profits despite coronavirus pandemic

The economy has been tanking. Coronavirus infections and deaths have been rising. And the health care industry is as rich as ever.

The big picture: Second-quarter results are still pouring in, but so far, a vast majority of health care companies are reporting profits that many people assumed would not have been possible as the pandemic raged on.


What's happening: Even after excluding one-time occurrences — like Sanofi's major windfall from selling its stake in Regeneron or Gilead's massive loss tied to buying a biotech company — the industry is posting profits that are above historic norms.

Pharmaceutical companies: Drug sales fell across many companies, but cutting administrative and research costs kept earnings at industry highs.

  • Nine of the 10 biggest profit margins recorded as of July 31 belonged to drug companies. Par for the course.

Hospitals: HCA Healthcare, Universal Health Services and Community Health Systems all posted profits well above expectations — which surprised Wall Street, considering hospitals halted elective procedures for more than a month.

  • Baptist Health, a not-for-profit hospital system headquartered in Kentucky, "does not foresee a need for additional forms of liquidity" because it has 241 days of cash on hand, the eight-hospital system told bondholders last week.
  • Northwestern Memorial HealthCare, an academic system based in Chicago, told bondholders that its patients' health insurance hasn't changed much, and most procedures are back to normal volumes.
  • Those messages differ from industry lobbyists, who have been asking for more federal bailout funds and have been saying "hospitals are now facing the greatest financial crisis that we have ever faced in our history."

Health insurers: UnitedHealth Group had a record-breaking quarter. Anthem, Cigna and others similarly posted significantly higher earnings than last year.

  • This was entirely expected. Insurance premiums were still rolling in, but people didn't go to their doctor or hospital as often because of stay-at-home orders.

The losers: Medical device manufacturers like Boston Scientific, Stryker and Edwards Lifesciences all lost money in the second quarter.

  • But those companies' stock prices have risen anyway, because surgeries that involve their devices have picked back up.

The bottom line: Just like Big Tech, the pandemic has not significantly stunted the economic and political strength of the health care industry.

Go deeper: Follow our health care earnings tracker

Justice Department drops lawsuit against John Bolton over Trump book

The Justice Department on Wednesday dropped its lawsuit against President Trump's former national security adviser John Bolton over the publication of his tell-all book, “The Room Where it Happened.”

Why it matters: The move comes a year after the Trump administration sued Bolton in federal court, claiming he breached his contract by failing to complete a pre-publication review for classified information.

Keep reading... Show less

Fed may raise rates sooner, as inflation is higher than expected

The Federal Reserve kept rates unchanged at its latest policy meeting,but a shift in sentiment emerged as to how soon it should begin raising rates.

Why it matters: The Fed's rock bottom rates policy and monthly asset purchases helped the U.S. markets avoid a meltdown during the COVID crisis last year. But as the economy recovers, a chorus is growing for the Fed to at least consider a timeline for pulling back its support before things get overheated.

Keep reading... Show less

Naftali Bennett: How Israel's new PM plans to handle relations with Biden

New Israeli Prime Minister Naftali Bennett is signaling he intends to move cautiously at first on issues like Iran and the Israeli-Palestinian conflict, an approach that will suit the Biden administration just fine.

Why it matters: Bennett is aiming to avoid an early confrontation with the U.S., and his fragile and ideologically diverse government will have a hard time taking any groundbreaking steps on foreign policy in the first place.

Keep reading... Show less

Biden: Consequences for Russia would be "devastating" if opposition leader Navalny dies

President Biden said he warned Russian President Vladimir Putin during Wednesday's summit that if jailed Russian opposition leader Alexei Navalny dies in prison, the consequences "would be devastating for Russia."

Why it matters: Although the White House had previously warned the Russian government over Navalny's imprisonment, Biden personally delivered the message to Putin on Wednesday.

Keep reading... Show less

Republican Leader Kevin McCarthy will support Juneteenth bill

House Republican Leader Kevin McCarthy will support a bill to make Juneteenth a federal holiday when it comes to the floor later Wednesday, his office tells Axios.

Why it matters: The House is slated to pass a bill making June 19 — Juneteenth — a federal holiday that memorializes when the last enslaved people in Texas learned about their freedom under the Emancipation Proclamation.

  • It will then go to President Biden for his signature just days before the occasion and one day after the Senate passed the bill unanimously.

Biden says he raised human rights issues in Putin summit

President Biden said he raised issues including nuclear arms control, cybersecurity, election interference and violations of human rights in Russia in his meeting with Vladimir Putin in Geneva on Tuesday.

What he's saying: "My agenda is not against Russia or anybody else. It's for the American people," Biden said at a press conference following the summit, which was shorter than expected.

Keep reading... Show less

Putin calls talks with Biden "constructive," says ambassadors will return to posts

Russian President Vladimir Putin of Russia said Wednesday that his summit with President Biden was "constructive," and that the countries had agreed their ambassadors would imminently return to their posts in Moscow and Washington.

What he's saying: "Many of our joint positions are divergent but nevertheless I think both sides manifested a determination to try and understand each other and try and converge our positions," Putin told reporters at a press conference immediately following the meetings.

Keep reading... Show less

Southwest heat wave intensifies, 40 million likely to see 100-degree temperatures

A punishing and long-enduring heat wave is intensifying in parts of the West and Southwest, with heat warnings and advisories in effect across seven states Wednesday. The heat will not relent until late in the weekend.

Threat level: In the coming days, 40 million are likely to see temperatures reach or exceed 100 degrees.

Keep reading... Show less

Insights

mail-copy

Get Goodhumans in your inbox

Most Read

More Stories