Analyst: Tough Flu Season Helps Hospitals; Hurts Insurers

Higher levels of influenza in the current season should help to enrich hospital investors while tending to impoverish shareholders of health insurance concerns, an analyst said Friday. Commenting on data from the Centers for Disease Control, Sterne Agee's Brian Wright noted that 'flu cases are up 27 percent this week from a year ago, although the numbers have dropped slightly in the past seven days. The CDC said 5.5 percent of visits to outpatient health clinics concerned symptoms of influenza, down from 5.9 percent last week. A year ago this week the figure was 4.4 percent. The centers' list of states with high rates of flu symptoms totaled 26, down from 29 a week earlier. "It represents incremental revenue for hospitals and incremental costs of health plans," Wright said in a note. The analyst drew up a list of companies with notable geographic exposure to the current outbreak. Hospital companies well-positioned to gain from the current outbreak include LifePoint Hospitals, Inc. LPNT, which has 71 percent of its beds in states with high 'flu action; Community Health Systems CYH and Universal Health Services Inc. UHS with 70 percent; HCA Holdings Inc. HCA at 60 percent and 50 percent for Tenet Healthcare Corp THC. Insurers with a notable geographic exposure include Centene Corp. CNC, WellCare Health Plans Inc. WCG and Molina Healthcare Inc. MOH.