Hospital stocks already had fallen a long way from their spring peaks. On Thursday, they took another tumble after executives with insurance giant UnitedHealth Group said they may not return to the insurance exchange market in 2017. That's a sharp turnabout from last month, when the company said it would add 11 states to its exchange lineup. But now execs say they expect to take a $500 million bath on their insurance exchange business in 2016, and they have scaled back their marketing of those products.
“We cannot sustain these losses,” Chief Executive Officer Stephen Hemsley told analysts on a conference call. “We can’t really subsidize a marketplace that doesn’t appear at the moment to be sustaining itself.”
The news delivered an early-morning blow to the shares of Middle Tennessee's hospital companies and there was no recovery during the day. Heading into the last few minutes of trading, HCA Holdings was down 6.1 percent while Community Health Systems was off 8.5 percent and LifePoint Health was giving up 5.6 percent. Shares of surgery center and physician services company AmSurg (Ticker: AMSG) also were down more than 5 percent.
Combined, those drops wiped out $2.4 billion of the market value of the four local companies — $1.7 billion of that number in HCA alone. Industry peers Tenet Healthcare and Universal Health Services also didn't avoid the red ink.
The U.S. Department of Health and Human Services has challenged Nashville to lower its rate of uninsured citizens.
Through the Healthy Communities Challenge, HHS will tally the numbers of new marketplace sign-ups at the end of the third enrollment period, which began this month.
Tennessee has dropped its adult uninsured rate from 16.8 percent in 2013 to 12.9 percent in the first half of this year, but 104,000 people in Nashville and the surrounding region are still uninsured and eligible for marketplace plans, according to a release.
Twenty cities in 19 states will be compared to see which community made the most progress in reducing the rate of the uninsured during the period, and President Barack Obama will visit the winning city.
The national uninsured rate for children has declined 16 percent since 2013, but Tennessee's rate has remained flat.
A report published by Georgetown University found Tennessee has a child uninsured rate of 5.2 percent, or 78,000 children, with no significant change from 2013. The state's rate is lower than the national percentage of uninsured children, which dropped to a historic low of 6 percent in 2014.
The study was based on U.S. Census Bureau American Community and researchers cited Insure Tennessee as "the single most effective policy change Tennessee could make to keep pace with other states in helping more children get health care coverage."
For the full report, click here.
Speaker Beth Harwell said the legislature may take a second pass at Insure Tennessee in January:
“I think we will revisit heath care again. I’m not telling you that Insure Tennessee has some magic bullet to be passed this year but I do think there will be continued discussion.”
Harwell said Republicans… have “legitimate concerns and I think if we’re going to see something passed, we’re going to have to address them.”
She said those concerns include caps on enrollment in the expansion program, designed under the federal Affordable Care Act to cover more uninsured working poor. “We were told it would be a program for about 280,000. The reality is there are about 400,000 people who qualify,” she said.
POSTDATA: WARRANTY DEEDS