With Overhaul of Affordable Care Act Derailed, Rising Prices Becomes the Most Critical Issue Facing U.S. Healthcare Industry, MUFG Says

NEW YORK, Oct. 6, 2017 /PRNewswire/ -- Following the recent inability of the U.S. Congress to overhaul the Affordable Care Act (ACA), the most critical issue facing the nation's healthcare system is soaring prices, according to Allen Fisher, Global Head of Healthcare Banking at Mitsubishi UFJ Financial Group, Inc. (MUFG).

Mr. Fisher cited three reasons for rapidly rising healthcare prices: uncertainties related to the federal government's healthcare policy, the high costs associated with the current U.S. opioid crisis; and increased Medicare spending as Americans live longer lives.

He made his remarks on September 28 in New York during a session of MUFG Explores, an issues-oriented series in which MUFG subject matter experts meet with journalists to discuss newsworthy topics and trends. Andreas Dirnagl, Global Head of MUFG's Healthcare Strategic Research, joined Mr. Fisher as a co-host for the event.

"As healthcare prices continue to climb, countless Americans will struggle to find adequate treatment – a situation that is particularly troubling given the decreased amount of funding the ACA receives from the federal government," said Mr. Fisher. "Further, when you factor in how expensive it is to fight the expanding opioid-addiction crisis, in addition to the costs associated with an aging population, it's clear that suitable, affordable healthcare will not be available to many of those who need it most."

One way to reduce costs and raise revenues, he added, is to increase access to walk-in clinics, urgent care facilities, and wellness centers.

"By decentralizing the care provided away from expensive hospitals, people are able to get more care, more often – that is why we need to focus on wellness care," said Mr. Fisher. "The United States is terrific in dire situations, such as cardiac and orthopedic surgeries — these operations are complex and highly profitable for hospitals. What we aren't so good at is prenatal care and preventative medicine."

Mergers & Acquisitions
Meanwhile, Mr. Dirnagl noted that while there have been fewer transformative healthcare industry mergers and acquisitions, there have been a significant number of smaller transactions.

"One reason why healthcare M&A activity has been down this year is that in 2014 and 2015,  many companies had the opportunity to do inversions," said Mr. Dirnagl, citing the tactic in which U.S.-based companies keep some of their capital with overseas subsidiaries to avoid paying taxes in the U.S. where corporate rates are generally higher. "That was more or less snuffed out in 2016" when the Obama administration halted the practice, he added.

Mr. Fisher has nearly 20 years of healthcare-banking experience, as well as an extensive background in leveraged finance and loan syndications. Mr. Dirnagl has worked for more than 25 years in the financial markets and healthcare finance.

MUFG has relationships with virtually every major pharmaceutical, biotech, and med-tech company in the U.S. The bank ranks number one in healthcare receivable securitizations, and is in the top 10 for healthcare investment-grade bond underwriting.

Future MUFG Explores sessions will look into compelling subject areas including renewables, the retail sector, and Latin American finance.

About MUFG Americas Holdings Corporation

Headquartered in New York, MUFG Americas Holdings Corporation is a financial holding company and bank holding company with total assets of $150.6 billion at June 30, 2017. Its main subsidiaries are MUFG Union Bank, N.A., and MUFG Securities Americas, Inc. MUFG Union Bank, N.A., provides an array of financial services to individuals, small businesses, middle-market companies, and major corporations. As of June 30, 2017, MUFG Union Bank, N.A., operated 361 branches, comprising primarily retail banking branches in the West Coast states, along with commercial branches in Texas, Illinois, New York, and Georgia, as well as 16 PurePoint Financial Centers and two international offices. MUFG Securities Americas Inc. is a registered securities broker-dealer that engages in capital markets origination transactions, private placements, collateralized financings, securities borrowing, and lending transactions, and domestic and foreign debt and equities securities transactions. MUFG Americas Holdings Corporation is owned by The Bank of Tokyo-Mitsubishi UFJ, Ltd., and Mitsubishi UFJ Financial Group, Inc. The Bank of Tokyo-Mitsubishi UFJ, Ltd. is a wholly owned subsidiary of Mitsubishi UFJ Financial Group, Inc., which is one of the world's leading financial groups. Visit www.unionbank.com or www.mufgamericas.com for more information.

About MUFG (Mitsubishi UFJ Financial Group, Inc.)

MUFG (Mitsubishi UFJ Financial Group, Inc.) is one of the world's leading financial groups, with total assets of approximately $2.7 trillion (USD) as of June 30, 2017. Headquartered in Tokyo and with approximately 350 years of history, MUFG is a global network with approximately 2,300 offices in nearly 50 countries. The Group has more than 140,000 employees and about 300 entities, offering services including commercial banking, trust banking, securities, credit cards, consumer finance, asset management, and leasing. The Group's operating companies include Bank of Tokyo-Mitsubishi UFJ, Mitsubishi UFJ Trust and Banking Corporation (Japan's leading trust bank), and Mitsubishi UFJ Securities Holdings Co., Ltd., one of Japan's largest securities firms. Through close partnerships among our operating companies, the Group aims to "be the world's most trusted financial group," flexibly responding to all of the financial needs of our customers, serving society, and fostering shared and sustainable growth for a better world. MUFG's shares trade on the Tokyo, Nagoya, and New York (MTU) stock exchanges. Visit www.mufg.jp/english/index.html.

SOURCE MUFG Union Bank, N.A.

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