Amanda Pedersen 1

January 23, 2017

2 Min Read
One Way ACA Uncertainty Could Hurt GE's Bottom Line

GE executives said uncertainty around the repeal and replacement of the Affordable Care Act could hinder growth in its U.S. healthcare segment as customers may become cautious.

Amanda Pedersen

GE CEO Jeff Immelt said U.S. healthcare customers could show caution around GOP efforts to kill Obamacare

Industrial conglomerate's like General Electric Corp. could start to see healthcare customers becoming more cautious in response to the GOP's efforts to dismantle Obamacare.

By segment, the Affordable Care Act is drawing the most attention from the media and from customers, GE CEO Jeff Immelt said.

"I think you could see some caution around the Affordable Care Act as you go forward," Immelt said. "We haven't really seen that much. But that could happen."

Immelt shared that view Friday during the company's fourth-quarter earnings call, just hours before President Donald Trump signed an executive order instructing federal agencies to "minimize the unwarranted economic and regulatory burdens" of the ACA.

The order signaled Trump's intention to move quickly on repealing and replacing Obamacare, which was one of his central campaign promises. The order itself didn't entail anything unexpected, yet the timing was a bit curious considering the president had not mentioned healthcare at all during his inaugural address, and there is still no mention of the subject on the Trump administration's newly launched Whitehouse.gov website. Top issues that are included on the website are: energy, foreign policy, jobs and growth, military, law enforcement, and trade deals.

GE's organic healthcare revenue grew 3% in the fourth quarter of 2016 to $5.4 billion, the company reported. Looking at the sector by region, the company's chief financial officer, Jeff Bornstein, touted great international strength with China up 20%, Europe up 6%, and Latin America up 16%. U.S. organic healthcare orders slipped by 1% during the quarter though.

Moving forward, Bornstein said the company is anticipating somewhat slower growth in 2017 from its U.S. healthcare business due to uncertainty around the repeal and replacement of the ACA. In other parts of the world, however, GE's healthcare segment is expected to see continued strong growth in China, Africa, and Asia Pacific.

Amanda Pedersen is Qmed's news editor. Reach her at [email protected].

[Image courtesy of Pixabay]

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