Community Health Systems, Inc.

High yield bond issuance surged last week and hit its highest level in 2016 yet due to continued growth in volume.

The hospital sector is widely considered a non-cyclical or defensive industry, meaning demand for hospital services doesn’t change with the economic cycle.

Wall Street analysts expect that Universal Health Services (UHS) will report higher net profit margins in 3Q15 compared to margins in 3Q14.

In terms of payer mix, the percentage of HCA Holdings revenues contributed by Medicare rose from 28.0% in 3Q13 to 30.3% in 3Q14.

Capital projects in the hospital sector include purchasing new facilities, purchasing medical equipment, renovating and replacing existing hospitals, and investing in information systems infrastructure.

In the capital-intensive hospital industry, economies of scale offer a competitive advantage by spreading out the high fixed costs, providing for higher margins.

In 2015, HCA Holdings deployed ~$2.4 billion in capital expenditure. It planned to increase capital spending to $2.7 billion in 2016.

With 67 hospitals, acquisitions continue to strengthen its position in rural markets, especially where LifePoint Hospitals is the sole healthcare provider.

Universal Health Services (UHS) has displayed a trend in payer mix from 2011 to 2013 that differs from other companies in the healthcare industry (XLV).

Universal Health Services’ (UHS) net revenues increased by 4.6% from $6.96 billion in 2012 to $7.28 billion in 2013.

Universal Health Services (UHS) earns more than 50% of its total revenues from the Texas, Nevada, Florida, California, and District of Columbia markets.

Hospital admissions are classified in two categories, inpatient admissions and outpatient admissions. Patients who are admitted overnight are inpatients.

Economic changes in interest rates affect hospital companies, depending on the company’s cost-structure and expansion strategies.

Inflation closely relates to the performance of the healthcare industry (XLV), as it affects the rates that hospitals charge and the costs of medical care.

The healthcare industry, represented by the Healthcare Select Sector SPDR, is affected by the unemployment rate. Income affects people’s health choices.

HCA Holdings is capturing market share in the $15 billion urgent care clinic market field by focusing on acquiring or opening standalone urgent care clinics.

With solutions such as flexible staffing and optimal group purchasing provided by Parallon, HCA Holdings has better operating margins as compared to its peers.

HCA Holdings’ diversified suite of services enables it to retain patients at their facilities, which bolsters revenues per patient.

Passive investments account for more than 56% of HCA Holdings’ total ownership structure.

HCA Holdings went private in 1988 through a leveraged buyout, but it again became a public company in 1992.

Community Health Systems acquires two to four hospitals each year as a part of its growth strategy. Reducing duplicate functions at the corporate level reduces overhead salary costs.

The Patient Protection and Affordable Care Act (or ACA) and Health Care and Education Affordability Reconciliation Act are together called “Reform Legislation.”