Community Health Systems, Inc.
Assessing the economy’s impact on national healthcare spending
National healthcare spending is a major driver of the hospital industry. National spending on hospital care is expected to amount to $973 million.
High Yield Bond Issuance Hit 2016 Record Last Week
High yield bond issuance surged last week and hit its highest level in 2016 yet due to continued growth in volume.
Appaloosa Management starts new positions in FCX, INGR, CYH, THC and sells MSFT, CMCSA—13F Flash E
In this six-part series, we’ll go through some of the main positions Appaloosa Management traded this past quarter. Why sell Microsoft (MSFT)?
DaVita HealthCare Partners is New Stake in Lone Pine’s Portfolio
DaVita posted 4Q14 net earnings of $208 million, or $0.96 per share, compared with $212.3 million, or $0.99 per share, last year.
What do falling oil prices mean for the hospital industry?
Economic conditions like falling oil prices affect the healthcare industry with a lag. This makes the hospital industry a good investment option.
What Is the Reason for LifePoint’s High Salary and Wage Expenses?
During 4Q15, salaries and benefits for LifePoint Health (LPNT) amounted to $652.7 million, up 6.6% in comparison with the same quarter of the previous year.
Must-read: Is the US hospital industry truly non-cyclical?
The hospital sector is widely considered a non-cyclical or defensive industry, meaning demand for hospital services doesn’t change with the economic cycle.
Universal Health Services’ Net Profit Margin Expected to Rise
Wall Street analysts expect that Universal Health Services (UHS) will report higher net profit margins in 3Q15 compared to margins in 3Q14.
Appaloosa Management starts new positions in FCX, INGR, CYH, THC and sells MSFT, CMCSA—13F Flash B
In this six-part series, we’ll go through some of the main positions Appaloosa Management traded this past quarter. Why buy Ingredion Inc. (INGR)?
Exploring payer mix trends at HCA Holdings
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.
Analysts Expect UHS’s 2016 Net Profit Margins to Rise Marginally
Wall Street analysts have projected that Universal Health Services’ net profit margin will increase marginally from 7.5% in 2015 to 7.6% in 2016.
What Are Analysts’ Recommendations for HCA Holdings?
HCA Holdings released its 4Q15 and fiscal 2015 earnings results on January 28, 2016. In Bloomberg’s survey, 68.0% of the analysts rated HCA Holdings a “buy.”
The health insurance marketplace affects the hospital industry
These exchanges—also called “health insurance marketplaces”—sell federally regulated, subsidized health insurance to individuals and small businesses.
Who pays hospital bills? Analyzing hospitals’ payer mix
Government programs Government programs like Medicare and Medicaid, combined with other health insurance plans such as the Children’s Health Insurance Program (or CHIP), Department of Defense, and Department of Veterans Affairs programs, comprise about 51% of the total payments for hospital care. There are also other third-party payers, like worksite healthcare, the Indian Health Service, […]
Overview: Assessing hospital companies’ capital expenditures
Capital projects in the hospital sector include purchasing new facilities, purchasing medical equipment, renovating and replacing existing hospitals, and investing in information systems infrastructure.
Why location and services affect hospitals’ competition and margins
During the 1990s, the hospital industry underwent about 900 consolidation deals. These led to the formation of local markets, with limited hospital systems dominating cities like Boston, Pittsburgh, and Philadelphia.
Understanding hospitals’ size, technology, and operating expenses
In the capital-intensive hospital industry, economies of scale offer a competitive advantage by spreading out the high fixed costs, providing for higher margins.
Why healthcare investors should consider teaching hospitals
An overview of teaching hospitals can help you predict future trends in hospital industry workforce management and, finally, the companies’ overall expenses.
Understanding hospitals’ bad debt expenses and profitability
According to the American Hospital Association (the AHA), uncompensated care costs in 2013 amounted to about $49 billion. Bad debt expenses closely relate to unemployment levels and the total number of uninsured people.
Could Growth in Acute Care Revenues Pressurize UHS’s Valuations?
Universal Health Services’ acute care revenues rose by 10.9%, from approximately $4.2 billion in 2014 to $4.6 billion, in 2015.
HCA Holdings’s Strong Capital Expenditure Strategy for 2016
In 2015, HCA Holdings deployed ~$2.4 billion in capital expenditure. It planned to increase capital spending to $2.7 billion in 2016.
HCA Holdings’s Operating Expense Ratio Fell in 4Q15
In 4Q15, HCA Holdings spent about $8.1 billion on salaries, supplies, and other operating expenses combined—an increase of 5.3% from $7.7 billion spent in 4Q14.
Rise in Revenues Is Expected for Universal Health Services
According to Wall Street, Universal Health Services’ 3Q15 revenues are estimated to be about $2.2 billion—growth of about 9.5% on a YoY basis.
Organic growth strategy at LifePoint Hospitals
LifePoint Hospitals (LPNT) has adopted a four-pronged organic growth strategy to boost its revenues, a key element of which is physician recruitment.
LifePoint Hospitals’ geographic strategy
LifePoint Hospitals’ geographic strategy is to provide medical and surgical services in mainly non-urban markets.
Hedge funds among top owners of LifePoint Hospitals
The major hedge funds project that the Affordable Care Act will benefit LifePoint Hospitals and increase the company’s revenues.
An overview of LifePoint Hospitals
With 67 hospitals, acquisitions continue to strengthen its position in rural markets, especially where LifePoint Hospitals is the sole healthcare provider.
Universal Health Services’ payer mix differs from other companies’
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).
Assessing Universal Health Services’ revenue mix and admissions
Same-facility inpatient admissions and equivalent admissions in the behavioral health services segment increased by 3.2% and 3.5% from 2012 to 2013.
Exploring Universal Health Services’ revenue streams
Universal Health Services’ (UHS) net revenues increased by 4.6% from $6.96 billion in 2012 to $7.28 billion in 2013.
Exploring Universal Health Services’ major markets
Universal Health Services (UHS) earns more than 50% of its total revenues from the Texas, Nevada, Florida, California, and District of Columbia markets.
Unraveling the history of Universal Health Services
Universal Health Services (UHS) has consistently provided good returns. Its performance surpassed that of the Health Care Select Sector SPDR ETF (XLV).
How will the Cadillac tax affect the hospital industry?
The implementation of this tax, called the Cadillac tax, will take effect beginning 2018. Post-2018, the threshold will be indexed to general inflation
HCA Holdings outpatient services see revenue growth
HCA Holdings earned 38% of its total revenue from outpatient services in 3Q14. The company also announced the acquisition of CareNow.
Why Medicaid expansion leads to better hospital performance
According to the ACA, Medicaid expansion programs involve states changing the eligibility limits of Medicaid coverage to include population up to 138% of the federal poverty line.
Analyzing the important current trends in hospital admissions
Hospital admissions are classified in two categories, inpatient admissions and outpatient admissions. Patients who are admitted overnight are inpatients.
Why changes in interest rates affect the hospital industry
Economic changes in interest rates affect hospital companies, depending on the company’s cost-structure and expansion strategies.
Gauging inflation’s effects on the hospital industry
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.
Why the unemployment rate affects hospital performance
The healthcare industry, represented by the Healthcare Select Sector SPDR, is affected by the unemployment rate. Income affects people’s health choices.
Exploring HCA’s debt numbers
Despite having negative equity, HCA Holdings is backed by strong operational performance and debt-to-EBITDA figures, which are among the lowest in the industry.
HCA’s physician recruitment and labor management
HCA Holdings uses advanced staffing solutions such as creating a centralized float pool of nurses instead of directly hiring nurses for different facilities.
HCA’s information technology initiatives
HITECH specifies certain criteria that must be satisfied to qualify as a “meaningful use” of electronic health record technology.
Standalone urgent care strategies
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.
Exploring HCA Holdings’ operating expenses
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’s diversification strategy
HCA Holdings’ diversified suite of services enables it to retain patients at their facilities, which bolsters revenues per patient.
Exploring HCA’s ownership structure
Passive investments account for more than 56% of HCA Holdings’ total ownership structure.
An overview of HCA Holdings
HCA Holdings went private in 1988 through a leveraged buyout, but it again became a public company in 1992.
Community Health Systems: Market share growth strategies
The company acquires hospitals to create regional networks, especially in states where more of the population is uninsured. By positioning itself to be the network provider in under-penetrated markets, the company can earn higher revenues.
The benefits of Community Health Systems’ acquisition strategy
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.
Managed care and 3rd parties dominate for-profit hospital payer mix
Sources of revenue For-profit hospitals like HCA Holdings (HCA), Tenet Healthcare (THC), Universal Health Services (UHS), and Community Health Systems (CYH) receive payments from federal Medicare, state Medicaid, or similar programs, managed care, third-party payers, and directly from patients. You can reduce your dependence on payment variations from different payers by investing in the Healthcare Select Sector […]
Healthcare reform’s impact on Community Health Systems
The Patient Protection and Affordable Care Act (or ACA) and Health Care and Education Affordability Reconciliation Act are together called “Reform Legislation.”
Appaloosa Management starts new positions in FCX, INGR, CYH, THC and sells MSFT, CMCSA—13F Flash F
In this six-part series, we’ll go through some of the main positions Appaloosa Management traded this past quarter. Why sell Comcast Corp. (CMCSA)?