Hospital stocks are on shaky ground, and weakened patient admissions--due to patients putting off elective and "not critical" procedures--may be responsible.
The five major, publicly-traded hospital chains--Community Health, Tenet, Universal Health, Health Management Associates and LifePoint--saw shares decline in the 1 to 3 percent range on Monday, reports the Wall Street Journal. In addition, all five hospital chains are down significantly over the past three months.
The S&P 500 managed-care index was up 1 percent over the past month and remained generally flat over the past three months, while the healthcare facilities index was down nearly 7 percent over the past month and more than 23 percent over three months, notes the WSJ.
The force driving down hospital stock prices appears to be the decline in patient volumes hospitals saw in the second quarter of 2010. Hospital executives don't expect admissions to improve until the economy regains momentum.
Still, hospital stocks were up a few weeks ago, following the Senate's vote on Medicaid funding on Aug. 4. Shares of Community Health Systems (NYSE: CYH) jumped 8.26 percent, and LifePoint Hospitals (NYSE: LPNT) jumped 3.09 percent, reports The Tennessean. Overall, hospital stocks saw a 5.3 percent surge that day.
At yesterday's market closing, Community Health was down nearly 2 percent, Tenet was down 2.8 percent, Universal Health (NYSE: UHS) dropped nearly 2 percent, Health Management Associates (NYSE: HMA) dropped 2 percent and LifePoint was down 1.2 percent.
Perhaps the healthcare conference season--from mid-September through mid-April--will pose a distraction to the negative economic reports that have been inundating investors, A.J. Rice, analyst for Susquehanna Financial Group, told the WSJ.
For more:
- read the Wall Street Journal piece
- read this article in The Tennessean