Hospital stock prices improving, but will they keep it up?

Over the past several weeks, hospital stocks have begun a rally, with investors hopeful that hospitals will be buoyed by an influx of newly-insured persons under health reform bills brewing on the hill.

The improved overall hospital sector stock performance continued last week when Community Health Systems and Universal Health Systems had positive health systems. The sector's improvement didn't seem to slow, meanwhile, when Tenet Health Care and Lifepoint Hospitals reported small losses.

Despite its losses, Tenet was among the hospital companies touting the reform bill as a move that would relieve it of the bad debt which had been accumulating as it attempted to care for the uninsured patients coming through its doors.

The question now, for both investors and the hospitals themselves, is whether a crop of newly-insured patients will be made up for by cuts in overall Medicare and Medicaid payments. It's also not clear how the hospitals will weather the ongoing recession, which continues to squeeze their returns on investment, access to capital and other key financial metrics.

To learn more about hospitals' position:
- read this Healthcare Finance News piece