Hospital Stocks Down on Rumored Medicare Cuts 8 comments
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The nine leading hospital company stocks are looking pretty bearish on their daily charts.
Reports and rumors in Washington late last week that the three large hospital associations are about to agree to give Congress and the Obama administration $150 billion in cost concessions over the next 10 years obviously have not been good for the hospital companies.
In addition, Sen. Max Baucus (D-MT) is looking for cuts in Medicare payments to hospitals and physicians.
And how many hospitals can run on California’s IOUs? Not only California, but most states are having budget problems because of Medicaid.
Then there are the confusing signals coming out of Washington about the prospects for the health insurance market reform legislation that’s going through Congress or is not going anywhere.
While last week it looked like the Democrats’ public option health plan, which I call a Government HMO (GHMO), was dead on arrival. Over the weekend, a couple of prominent Democrats promised that it is alive and kicking. I’ve seen talk that the public option would get only 38 votes in the Senate, but who knows?
The GHMO would solve hospital companies’ problems with uncompensated care and the 6 million to 8 million uninsured American citizens who aren’t eligible for existing government programs and can’t afford to buy any kind of health insurance because they’re permanently unemployable and chronically ill. But it wouldn’t solve the hospitals’ problems with 12 to 15 million uninsured illegal immigrants because they still would have to give them care without getting paid.
That unemployment rose last month to 9.5%, a 26-year high, also hurt hospital stocks, which almost always suffer during recessions.
On these charts, CYH, HMA, LPNT, THC and UHS are showing bearish signals.
On these charts, HLS, KND, MDTH and PHC are showing mixed signals. Click on the charts to see galleries of charts.
Disclosure: I don’t have positions in any of these stocks.
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This article has 8 comments:
I actually fear the possibility of medicare reductions and limitations on tests, etc., but at the same time I think the need to relegate and outsource is going to be important for physicians' practices -- if nationalized health care coverage goes into play, I'm assuming no more surgi-suites and in-house CAT scans, etc. The hospital providers should take up the slack to keep physicians' practices maximizing profits.
If nationalized health care is not forthcoming, the computerized recordkeeping and other advances will trim the overhead of the HCPs as a sector (I don't think it's dependent upon nationalized health care coverage -- it's inevitable as a standalone), which will keep the sector hopping. "It's all good," I guess you could say.
But still, there's so much activity that one can't help but look at the sector with one's "trader's hat" on!
So I guess the short answer is, "It doesn't matter what the rumor IS; it's sufficient that the rumor exists."
=(;^>)
On Jul 06 09:55 AM Donald Johnson wrote:
> The question remains, which rumors?
On Jul 06 11:00 AM User 441444 wrote:
> When I made the initial reply, I was wearing my "trader's hat." The
> intraday margins in HCP are impressive, and there's always the safety
> net of time -- as long as you're not in margins. The margin plays
> make HCP fairly predictable as a sector in the short term. And, again,
> the intraday spreads are impressive.
>
> I actually fear the possibility of medicare reductions and limitations
> on tests, etc., but at the same time I think the need to relegate
> and outsource is going to be important for physicians' practices
> -- if nationalized health care coverage goes into play, I'm assuming
> no more surgi-suites and in-house CAT scans, etc. The hospital providers
> should take up the slack to keep physicians' practices maximizing
> profits.
>
> If nationalized health care is not forthcoming, the computerized
> recordkeeping and other advances will trim the overhead of the HCPs
> as a sector (I don't think it's dependent upon nationalized health
> care coverage -- it's inevitable as a standalone), which will keep
> the sector hopping. "It's all good," I guess you could say.
>
> But still, there's so much activity that one can't help but look
> at the sector with one's "trader's hat" on!
>
> So I guess the short answer is, "It doesn't matter what the rumor
> IS; it's sufficient that the rumor exists."
>
> =(;^>)
>
>
www.businessword.com/i.../
www.businessword.com/i.../
www.businessword.com/i.../
I think Census undercounts illegal immigrants and under counts uninsured illegals and their uninsured dependents, many of whom are American-born citizens. My last link offers a link to Census reports.
Hope this helps.
finance.yahoo.com/news...