Cantor Fitzgerald analyst Joe France has launched coverage of a number of local health care names most notably hospital chain Community Health Systems, LifePoint and Vanguard. He says investors should be the latter two — Vanguard because it could be one of the industry's fastest growers and LifePoint because of its push into larger markets. When it comes to CHS, France says management's focus on integrating new acquisitions make it more of a long-term play.
Shares of all three companies are up more than 2 percent in Friday morning trading.
Let's call it the "Go big or go home" clause.
The compensation committee of AmSurg has added a somewhat peculiar sweetener to the 2012 cash bonus plan for the surgery center chain's executives. In addition to the usual potential payouts — which are governed by criteria such as overall earnings and surgery center profits — CEO Chris Holden and his lieutenants stand to get extra cash "in the event the Company completes an acquisition transaction that is not subject to the bonus provisions described above, such as the acquisition of another company."
For Holden, striking a deal like his $143 million purchase last year of a Dallas-based company could fatten his wallet by up to $168,000, based on his 2011 salary. AmSurg's five other top execs would be in line to collect a total of more than $200,000.
Two executive vice presidents at surgery center chain AmSurg have been busy this month cashing in on thousands of stock options about to expire. CFO Claire Gulmi has booked a profit of more than $280,000 since Nov. 3 by first exercising 30,500 options and then selling the resulting shares. (Check the filings here and here.) Chief Development Officer David Manning followed a similar route, converting 12,000 options and selling the shares they turned into. (His filings are here and here.) Shares of AmSurg (Ticker: AMSG) have climbed about 20 percent in 2011.
Always trying to make things simpler, the folks at the Centers for Medicare and Medicaid Services have amended certain rules related to ambulatory surgery centers.
The main reform in the final rule for ASCs is CMS’ announcement that ASCs will no longer be required to notify patients of their rights "in advance of the date of the procedure" but rather simply "prior to the start of the surgical procedure." The previous wording effectively prohibited an ASC from performing a surgery on the same day as the patient referral, and ASCs argued that it resulted in unnecessary scheduling inconveniences and travel issues for some patients. Now ASCs have the ability to perform same-day surgeries and still meet the patient notification requirement. CMS has also made certain technical corrections to the wording of ASC regulations that are not anticipated to have a substantive impact on ASC operations.
Hospitals' outpatient divisions, dialysis clinics and surgery centers are in line to get small increases in their reimbursement rates under a Centers for Medicare and Medicaid Services proposal released this week. The proposed hikes range from 1.6 percent for surgery centers to 2.1 percent for dialysis providers. The question now is whether they will stick in the face of the supercommittee and other cost cutters.
Kevin Ellich at Piper Jaffray has lowered his price target for shares of AmSurg, which are down more than 16 percent since the beginning of August. Ellich now sees AmSurg shares (Ticker: AMSG) going to $25, which puts him right at the Street's median.
Bank of America Merrill Lynch analysts have reiterated their 'buy' rating on shares of Vanguard Health Systems, which are down by a third from the June IPO (Ticker: VHS) to about $12. The consensus among analysts is that the shares will climb at least 30 percent from here.
The M&A attorneys for Vanguard Health Systems, Ardent Health Services, AmSurg, Community Health Systems and Brookdale Senior Living have been busy lately. Vanguard has completed its $210 million purchase of 51 percent of Texas hospital system Valley Baptist. Meanwhile, Ardent wrapped up its deal for two CHS hospitals in Oklahoma and AmSurg completed its acquisiton of Dallas-based National Surgical Care. Lastly, Brookdale put a bow on its acquisition of Horizon Bay Realty, whose assets are primarily in Texas and Florida. The last deal also involved negotiations for a Brookdale option to up to 20 percent of the U.S. portfolio of Chartwell Seniors Housing Real Estate Investment Trust.
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