Healthcare Sector Facing Low Volumes Due To Weak Flu Season (CYH, THC, HMA, LPNT, UHS)
According to Leerink Swann, the MEDACorp survey of 44 hospital administrators has indicated that “volume trends during the first two months of 1Q:10 appear to be slightly weaker than what was reported during the last few quarters.” “In particular, better-paying patient volumes – commercial admissions – weakened considerably, with many respondents continuing to cite economic conditions as the reason for these volumes deteriorating. In addition, we believe that lower volumes are, at least partially, explained by the very weak flu season,” the analysts say.
Leerink Swann anticipates “a potentially more challenging environment in 2010 (relative to 2009) due to continued declines in commercial patients, growth in uninsured volumes and potential Medicaid reimbursement cuts. These challenges will be somewhat offset by continued lower than historical labor cost inflation. Near term, however, the group is likely to trade based on the outcome of healthcare reform. We rate THC Outperform and CYH, HMA, LPNT and UHS Market Perform.”
