GMHSF/8.12.04

The Impact of Reform on theHealth Care Industry

Rosanne OttSenior Vice PresidentPortfolio Manager

Topics

•Background

•What types of reforms are being considered?

•Most likely outcomes and timing

•Potential impact on current plan sponsors

•What are costs? Who will pay for plan?

•How are changes implemented?

•Opportunities

Background

Types of Reform Being Considered

Most Likely Outcome, Timing, and Impact

What are Costs? Who Pays?

•February 24 : President Obama proposal

$634 billion* $1.0 to $1.5 trillion

$318 billion Higher taxes

$190 billion Increased taxation offshore earnings

$ 200 billion Other Medicaid drug rebate, charitable donation limit, mortgage interest

limitations, and lots more!)

* 10 year reserve

MORE

LIKELY

FROM

FROM

FROM

Campaign:

•Life Sciences

•Bio-Generics

•Health Care Information Technology (HCIT)

• Insure the uninsured

Opportunities Created by President Obama

Now in Office:

•February 9: Stimulus $778 billion

$19 billion: Medical Records Recovery

$10 billion: Life Sciences – National Institute Health (NIH)

$600 million: Cancer Research

•Future Winners: Level playing field All of healthcare wins, for a price?

Opportunities Created byPresident Obama

WALL STREET’S ODDS OF

HEATHCARE REFORM PASSING:

99.9%

Conclusion

Disclosure

The views expressed are as of May 8; these views may change subsequent to this date, and they do not guarantee the

future performance of the markets, the Alger Health Sciences Fund, or any other mutual fund managed by Fred Alger

Management, Inc.; they are not meant to provide investment advice, should not be considered a recommendation to

purchase or sell securities, and there is no guarantee they will materialize.

Investors should not consider references to individual markets or sectors as an endorsement or recommendation to

purchase or sell such markets or industries. Additionally, any sectors mentioned, if owned, were purchased or sold as

part of an overall portfolio, and therefore reference to them herein should not be construed as a recommendation or offer

to purchase or sell any such sector. Transactions in such sectors, if any, may have been made for a variety of reasons,

including, without limitation, in response to cash flows or due to inclusion in a benchmark.

A Word About Risk

Growth stocks tend to be more volatile than other stocks, as the price of growth stocks tends to be higher in relation to

their companies' earnings and may be more sensitive to market, political, and economic developments. Investing in

companies of all capitalizations involves the risk that stocks of small- and mid-sized companies are subject to greater

risk than stocks of larger, more established companies, owing to such factors as limited liquidity, inexperienced

management, and limited financial resources. The Alger Health Sciences Fund concentrates its investments in the health

sciences sector. As such, the value of the Fund’s shares may be more volatile than mutual funds that do not similarly

concentrate their investments.

Performance current to the most recent month-end for the Alger Health Sciences Fund or any mutual fund managed by

Fred Alger Management, Inc. may be found on www.alger.com.

Investing in the stock market involves gains and losses and may not be suitable for all investors.

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