Tu­mul­tuous mar­ket wor­ries health­care in­dus­try

Modern Healthcare - - THE WEEK AHEAD - —Me­lanie Evans

Health­care en­tered 2016 with mar­ket tur­moil, and not be­cause of China’s econ­omy. In­vestors grew anx­ious af­ter third-quar­ter re­sults last year sug­gested that the Af­ford­able Care Act’s boost to hospi­tals—and re­lated com­pa­nies such as staffing firms—had be­gun to wane.

Ap­pre­hen­sion was ap­par­ent be­fore a meet­ing this week in San Fran­cisco of biotech­nol­ogy, phar­ma­ceu­ti­cal and de­vice man­u­fac­tur­ers and com­pa­nies that op­er­ate the na­tion’s hospi­tals.

The event, the J.P. Mor­gan Health­care Con­fer­ence, is not lim­ited to pub­licly traded gi­ants such as Aetna, Com­mu­nity Health Sys­tems, HCA, Pfizer and Tenet Health­care Corp. Ma­jor not-for-profit hos­pi­tal ex­ec­u­tives will make ap­pear­ances as well. An­a­lysts at the an­nual meet­ing will hear about the op­er­a­tions, strate­gies and out­looks for As­cen­sion, Trin­ity Health and oth­ers. And they’re go­ing to hear some bad news.

En­vi­sion Health­care, Green­wood Vil­lage, Colo., lost one of its ma­jor in­vestors af­ter Winslow Cap­i­tal Man­age­ment sold off its stake in the emer­gency medicine and med­i­cal trans­port com­pany. And Com­mu­nity Health Sys­tems said the planned spinoff of its small hospi­tals into a new com­pany, to be called Quo­rum Health Corp., would be de­layed for rea­sons that in­cluded “mar­ket con­di­tions.” The com­pany had hoped to spin off Quo­rum in the first three months of the year but now ex­pects it will do so this sum­mer.

An­a­lysts said the de­lay will let the mar­ket set­tle af­ter the re­cent up­heaval for bor­row­ers, par­tic­u­larly those with weaker credit. Quo­rum is ex­pected to be among those with spec­u­la­tive­g­rade credit.

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