Moody's: HCA and UHS are big winners under tax law changes

Most for-profit hospital operators are poised to benefit from changes to U.S. tax laws, according to Moody's Investors Service.

The majority of for-profit hospital operators will see a cash flow boost from an increased ability to deduct capital expenditures and a lower corporate tax rate under the Tax Cuts and Jobs Act.

On an absolute basis, Nashville, Tenn.-based HCA Healthcare and King of Prussia, Pa.-based Universal Health Services will be the biggest beneficiaries from changes to the tax code, according to Jessica Gladstone, senior vice president of Moody's. HCA, UHS and Brentwood, Tenn.-based LifePoint Health could all see operating cash flow jump 10 percent or more in 2018 under the tax code changes.

Highly leveraged for-profit hospital operators, such as Franklin, Tenn.-based Community Health Systems and Brentwood-based Quorum Health, may have to pay more in taxes. "However, these companies will likely be able to utilize net-operating loss carryforwards in 2018, mitigating the cash impact," Ms. Gladstone said.

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