If President Barack Obama is re-elected this November, thus upholding his signature healthcare reform law, for-profit hospitals may see a major boost in their profitability, according to an Associated Press report.
Chris Rigg, an analyst with Susquehanna Financial Group, released a report that said EBITDA will increase more than 2 percent in 2014 for for-profit hospital companies, mostly due to the millions of people that will gain insurance from the Patient Protection and Affordable Care Act.
Starting in 2014, millions of uninsured Americans will be eligible for Medicaid or will receive coverage through health insurance exchanges. Because for-profit hospitals do not have designated charity care amounts, the influx of insured patients will boost revenues.
Mr. Rigg said Franklin, Tenn.-based Community Health Systems will gain the most, as 2014 EBITDA margins are expected to rise 260 basis points, according to the report. Dallas-based Tenet Healthcare is expected to see its EBITDA increase 240 basis points, while Naples, Fla.-based Health Management Associates' EBITDA is projected to climb 210.
"Under any scenario, the hospital industry will benefit significantly from the [PPACA's] coverage expansions," Rigg wrote, according to the report. "The expansion of Medicaid and insurance subsidies more than fully offsets the commercial pricing pressure we expect in the individual and small group insurance segment."
In the past five days, as of approximately 2:15 p.m. CDT, Sept. 18, stocks of hospital operators were up almost across the board:
• Hospital Corporation of America (Nashville, Tenn.): $33.02 per share (up 13.86 percent)
• Tenet Healthcare (Dallas): $6.13 per share (up 13.31 percent)
• Universal Health Services (King of Prussia, Pa.): $44.70 per share (up 9.96 percent)
• Health Management Associates (Naples, Fla.): $8.62 per share (up 8.28 percent)
• Community Health Systems (Franklin, Tenn.): $29.11 per share (up 6.93 percent)
• LifePoint Hospitals (Brentwood, Tenn.): $43.51 per share (up 5.79 percent)
• Vanguard Health Systems (Nashville, Tenn.): $10.78 per share (down 1.44 percent)
Chris Rigg, an analyst with Susquehanna Financial Group, released a report that said EBITDA will increase more than 2 percent in 2014 for for-profit hospital companies, mostly due to the millions of people that will gain insurance from the Patient Protection and Affordable Care Act.
Starting in 2014, millions of uninsured Americans will be eligible for Medicaid or will receive coverage through health insurance exchanges. Because for-profit hospitals do not have designated charity care amounts, the influx of insured patients will boost revenues.
Mr. Rigg said Franklin, Tenn.-based Community Health Systems will gain the most, as 2014 EBITDA margins are expected to rise 260 basis points, according to the report. Dallas-based Tenet Healthcare is expected to see its EBITDA increase 240 basis points, while Naples, Fla.-based Health Management Associates' EBITDA is projected to climb 210.
"Under any scenario, the hospital industry will benefit significantly from the [PPACA's] coverage expansions," Rigg wrote, according to the report. "The expansion of Medicaid and insurance subsidies more than fully offsets the commercial pricing pressure we expect in the individual and small group insurance segment."
In the past five days, as of approximately 2:15 p.m. CDT, Sept. 18, stocks of hospital operators were up almost across the board:
• Hospital Corporation of America (Nashville, Tenn.): $33.02 per share (up 13.86 percent)
• Tenet Healthcare (Dallas): $6.13 per share (up 13.31 percent)
• Universal Health Services (King of Prussia, Pa.): $44.70 per share (up 9.96 percent)
• Health Management Associates (Naples, Fla.): $8.62 per share (up 8.28 percent)
• Community Health Systems (Franklin, Tenn.): $29.11 per share (up 6.93 percent)
• LifePoint Hospitals (Brentwood, Tenn.): $43.51 per share (up 5.79 percent)
• Vanguard Health Systems (Nashville, Tenn.): $10.78 per share (down 1.44 percent)
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