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Two analysts and top management from eleven sector firms examine the Healthcare sector in this special 51-page issue from The Wall Street Transcript, available at (212/952-7433) or http://www.twst.com/info/info438.htm

TWST: In a recessionary environment, employers may be less concerned about retaining their employees. Are they going to be as willing to pay the premium increases?

Ms. Haggar: That’s a very good question. The premium increases for next year have already been negotiated and locked in. However, if the recession were to be deeper and longer than most people think, then that would be a risk to hospitals in 2003 (as it would be of course a risk to managed care companies as well). I think that hospitals are probably a safer place to invest for the long term than managed care stocks, although in the near term managed care stocks may bounce. They are very cheap and they are going to get at least a temporary reprieve from the litigation issues and the regulation that was supposed to take place in Washington, DC, in the second half of this year. Obviously, with the government busy fighting the war on terrorism, all other regulation has been pushed out to perhaps next year.

TWST: I wasn’t aware that they did have a reprieve.

Ms. Haggar: What I mean is the Patient’s Bill of Rights, on which regulatory action was expected by the end of this year and now has been postponed. Another stock idea in services, that is less vulnerable to the economic cycles and therefore the reimbursement risks, would be a specialty laboratory, such as DIANON (Nasdaq:DIAN). DIANON is basically a cancer diagnostic lab where patients’ biopsies are sent to diagnose or confirm cancer. The company recently bought another specialty lab testing company called UroCor (Nasdaq:UCOR), which does urology testing, for example, for prostate cancer. The acquisition of UroCor will allow DIANON to expand its geographical reach from the Northeast and mid-Atlantic to the South and Southwest. The bottom line is that this kind of specialty lab testing company should have good growth prospects as it benefits from demographics (i.e., a growing incidence of cancer due to the aging population). It is also more recession proof than general laboratories. While recessions affect employment and therefore healthcare coverage, cancer testing is not something that patients can postpone. Currently, DIANON is also benefiting from a good pricing environment.

TWST: What is your sense of investors’ psychology toward the healthcare stocks at this point, and what are your clients asking you?

Ms. Haggar: Health care has always been popular with investors because of its strong and stable growth patterns. In recent years as the baby boom generation started aging, the interest in investing in health care has also been on the rise. 1998 was the first year when baby boomers started reaching 50 years of age. We are therefore now looking at just the tip of the iceberg as far as the impact which the aging population will have on the growing demand for healthcare products and services.

TWST: So healthcare stocks should really be a part of everyone’s portfolio.

Ms. Haggar: Yes. I believe that they should be a part of everyone’s portfolio, both for the near term as a hedge against a potential recession or a war, and for longer term as a play on demographics and on the biotechnology revolution, which is creating new markets in previously untreatable diseases.

This special issue includes:

1) Investing in Healthcare Funds - In an in-depth (3,800 words) Analyst Interview, Mariola B. Haggar, President, General Partner and Portfolio Manager at Haggar Concord Partners, LP, examines the outlook for the sector and shares specific stock recommendations.

2) Healthcare Benefits Management/Outsourcing - In an in-depth (3,800 words) Analyst Interview, Michael J. Baker, Health Care Services Analyst focusing on benefits management/outsourcing at Raymond James & Associates, examines the outlook for the sector and shares specific stock recommendations.

3) CEO interviews (average 2,500 words). Top management of eleven sector firms examine the outlook for their firm and the sector.