Markets Wrong to Fret Medicare for All, Glenview's Robbins Says

(Bloomberg) -- Investors were wrong to be fearful of the “Medicare-for-All” proposals that sent health insurer stocks plunging this year, according to Larry Robbins, founder of hedge fund firm Glenview Capital Management.

"Anything that's mandatory in health care in the U.S., whether it'd be the individual mandate or something like mandatory Medicare, becomes quickly unpopular as 85 percent of people are actually happy with their insurance," Robbins said Tuesday in an interview on Bloomberg Television. The remaining coverage gap can be addressed without getting rid of the private insurance companies, he said.

Robbins, who has long been an investor in health care, reiterated his bullish calls on managed care and hospitals at the Sohn Investment Conference in New York on Monday. His portfolio includes Humana Inc., Anthem Inc. and Cigna Corp., Robbins said. Among hospitals, Glenview owns HCA Healthcare Inc., Tenet Healthcare Corp. and Universal Health Services Inc.

U.S. health insurer stocks remain in negative territory for the year after rebounding from April lows. The S&P 500 Managed Care index is down about 4.5 percent, underperforming the broader markets.

Glenview is also sticking to its bet on drug distributor McKesson Corp., which is down about 14 percent over the past year and has been engulfed in opioid litigation. “We don't see potential liability of McKesson being so dramatic that it takes away from what we think is an upturn in the business,” Robbins said.

Glenview's main fund was up almost 15 percent this year through April after declining more than 16 percent in 2018, Bloomberg previously reported.

The firm lost about $2 billion in assets in less than a year as investors fled a fund that began charging fees after it was initially free. It managed $7.7 billion as of March 1, down from $10 billion in June of last year. At its 2017 peak, the firm had about $12 billion in assets.

Other comments by Robbins included:

• The U.S. economy had reasonably good growth in the first quarter, despite still being in a “heavily-tariffed trade war.”
• Companies like FMC Corp. are still posting attractive results regardless of the agricultural tariffs between the U.S. and China. These companies are using free cash flow to “do what is wise.”

--With assistance from Vonnie Quinn.

To contact the reporters on this story: Tatiana Darie in New York at tdarie1@bloomberg.net;Alexandra Stratton in New York at astratton4@bloomberg.net

To contact the editors responsible for this story: Margaret Collins at mcollins45@bloomberg.net, Melissa Karsh, Josh Friedman

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