While an answer to that question realistically cannot be known for years, falling health care stocks apparently have spooked the public about the role of profit-driven companies in medicine. According to a Kaiser Family Foundation survey, a drop in public confidence in the care provided by for-profit health plans and hospitals followed last fall's highly publicized financial fallouts. Further, investors may be scared away by the recent performance of many health care stocks. From 1987 through 1995, the average annual return for health services stocks was 21 percent, and was 32 percent for HMOs.
Investors are an increasingly important source of capital for health plans.