Analysts at Fitch Ratings say the rollout of the various parts of the Affordable Care Act won't radically overhaul the health care sector overnight. In fact, they write, the breathlessly anticipated bump in patient volumes early next year merely "might provide a temporary boost to utilization." Beyond that, the biggest effect of the reform law will be to quicken the already vigorous pace of mergers and acquisitions.
Without an obvious catalyst for a recovery in weak organic growth, healthcare providers must instead look for a bottom-up solution to offset the effects on financial results. A trend of industry consolidation is reflective of the fact that economies of scale and vertical consolidation will support profitability in an environment where healthcare providers face slow organic growth and are required to accept more financial risk, such as through bundled or value-based payments.
Two more analysts following Community Health Systems have reiterated their 'hold' ratings on the company's shares after its first-quarter earnings report. But Joe France at Cantor Fitzgerald has lifted his target to $42 from $35 and Barclays Capital's Josh Raskin now sees the stock climbing to $50 rather than $48. CHS (Ticker: CYH) ended Wednesday trading at $44.72.
Vanguard Health Systems has selected Omnicell Inc. as the exclusive provider of medication management solutions throughout its health care delivery system. Financial terms of the deal between the two Nashville-based companies were not disclosed in a release. (Read more here.)
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- ROSS, BRIDGETT D
- COOKE, ETHEN LANYARD TRUSTEE; COOKE, ETHEN LEWIS ESTATE
- JACOBS, JESSICA ALEXANDRA; JACOBS, ERIKA BESS