Tumultuous market worries healthcare industry
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.