Four out of 10 health care executives surveyed by group purchasing organization Premier are dissatisfied with or (maybe worse) indifferent toward their company's investments in electronic health records. As Lena Weiner at HealthLeaders points out, "The growing dissatisfaction continues despite almost half (49%) of respondents stating that their largest capital investment this year will be in health IT, an area that includes EHR as well as hospital telecommunications systems, telemedicine, and advanced data analytics."
Equity investors last week lapped up the news that AmSurg plans to acquire physician services company Sheridan for more than $2 billion, but debt ratings agency Moody's isn't nearly as ebullient. Analysts Ron NeySmith and Peter Abdill say they are putting AmSurg's Ba3 rating under review for a downgrade because the Sheridan deal will push the company's debt levels to about six times its EBITDA. CFO Claire Gulmi last week said the AmSurg team expects to quickly work that ratio back down into the 4s, but the Moody's analysts say they see the Sheridan transaction marking a shift to "a much more aggressive acquisition strategy."
Color John Ransom enthusiastic about AmSurg's game-changing play for Sheridan Healthcare. The veteran Raymond James analyst has upgraded shares of the ambulatory surgery company all the way to 'strong buy' from 'market perform' and sees the stock (Ticker: AMSG) rising to $60 from the $45.74 where it closed Thursday. Ransom also has raised his 2015 EPS estimate for AmSurg to $3.15 from $2.77.
Shares of LifePoint Hospitals hit an all-time high of $63.07 Friday morning thanks in part to an upgrade from Ann Hynes at Mizuho. Hynes now rates the hospital operator a 'buy' instead of a 'neutral' and has raised her target to $72 from $58. LifePoint shares (Ticker: LPNT) are up almost 2 percent to $61.99 in late-morning trading.
While panelists at Wednesday's Nashville Health Care Council Wall Street analysis event had plenty to agree on — the need for Medicaid expansion, the likelihood of further hospital and managed care consolidation and the very low chance of an ACA repeal — one topic had the panel divided.
Led by Community Health Systems Chairman, President and CEO Wayne Smith, the discussion ranged from perception to prediction, but the panel of analysts were not in consensus about a long-term "doc fix," a way to better control what physicians are paid by Medicare. While Congress has continued to kick the can in regards to replacing the Sustainable Growth Rate adopted in the late 1990s, each short-term postponement of physician pay cuts has heightened the financial need for a long-term solution. (Click here for some good background from The Washington Post.)
While local analysts Whit Mayo of Robert W. Baird and Frank Morgan of RBC Capital Markets told the event's audience that a permanent solution was likely — Morgan said that, if anything actually gets done in D.C. on this issue this year, it will be a long-term plan — Credit Suisse's Ralph Giacobbe and Bank of America Merrill Lynch's Kevin Fischbeck disagreed.
Fischbeck predicted only a 20 percent likelihood of a long-term fix, because it is politically easy to continually pass the small bills and Giacobbe said political gridlock will continue to be too strong to allow for a real solution.
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