In­vestors wait to see if hos­pi­tals held ad­mis­sion vol­umes in Q2

Modern Healthcare - - THE WEEK AHEAD - —Dave Barkholz

In­vestors will be watch­ing be­gin­ning this week to see if hos­pi­tals main­tained ad­mis­sion and out­pa­tient vol­umes dur­ing the sec­ond quar­ter.

The start of sec­ond-quar­ter earn­ings re­leases will see pub­licly traded hos­pi­tals try­ing to match fairly tough com­pa­ra­ble num­bers from last year. There was also one less week­day in this year’s sec­ond quar­ter to pro­vide ser­vices.

“We’ll be look­ing for them to re­it­er­ate (earn­ings) guid­ance for the year,” said Brian Tan­quilut, se­nior vice pres­i­dent of health­care eq­uity re­search at in­vest­ment firm Jefferies & Co.

Gi­ant HCA kicks off the hos­pi­tal earn­ings sea­son on July 25 fol­lowed over the next sev­eral days by Tenet Health­care Corp., Com­mu­nity Health Sys­tems, LifePoint Health and Uni­ver­sal Health Ser­vices.

Tan­quilut said hos­pi­tals and their physi­cian ser­vice ven­dors such as En­vi­sion Health­care are com­ing to grips with “a new nor­mal” of slow­ing ad­mis­sions growth.

Hospi­tal­iza­tions are ris­ing at 1% to 2% an­nu­ally to­day vs. 3% to 4% in the years fol­low­ing the Af­ford­able Care Act and re­lated state Med­i­caid ex­pan­sions.

Growth in the ranks of the newly in­sured from the ACA have flat­tened and nearly full na­tional em­ploy­ment means few new peo­ple are get­ting em­ployer-spon­sored in­sur­ance to juice vol­umes, Tan­quilut said, adding that dy­namic also could be­gin to af­fect out­pa­tient vol­umes. En­vi­sion re­cently throt­tled back guid­ance for growth in same-store am­bu­la­tory surgery vol­umes from the mid-to-high sin­gle dig­its to the low-to-mid sin­gle dig­its, Tan­quilut said.

De­spite con­cerns about a re­peal of the ACA, in­vestors in hos­pi­tal stocks have stuck with them given the abil­ity of man­age­ment to nav­i­gate the choppy wa­ters.

The Mod­ern Health­care Hos­pi­tal Stock In­dex, en­com­pass­ing nine ma­jor hos­pi­tal com­pa­nies, is es­sen­tially flat since the U.S. House of Rep­re­sen­ta­tives passed its ver­sion of ACA re­place­ment on May 4.


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