Even as the U.S. stock market took a tumble this week amid uncertainty over the presidential election, shares of health maintenance organizations have held up as investors breathed a sigh of relief over assurance of a Republican-dominated Congress.
The Standard & Poor's HMO index steadily moved up this week and on Friday hit 402.65 points, a new high for the year, defying sharp declines in both the Dow Jones industrial average and the Nasdaq composite index.
The impetus comes from the one certainty that emerged from this week's elections--the Republicans will control Congress, which could help health maintenance organizations secure a more favorable outcome in hotly contested legislation known as the patients' bill of rights.
"Be it [Al] Gore or [George W.] Bush, the worst-case fears have not been realized [for HMO stocks]," said Joshua Raskin, an analyst at Lehman Bros. "Even if Gore comes in, we would still have a Republican Congress and get a logjam, which is good. No regulation is actually a good scenario for health-care services."
Among the health-care winners Friday, WellPoint Health Networks (WLP) rose $3.38 to $114; Cigna (CI) climbed $5.94 to $129.14; Humana (HUM) was up 38 cents to $13.63; and Oxford Health Plans (OXHP) gained 94 cents to $37.38.