Hospitals see modest profits after Obamacare binge

Nancy Marshall-Genzer Feb 22, 2016
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Hospitals see modest profits after Obamacare binge

Nancy Marshall-Genzer Feb 22, 2016
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Life was really good in the for-profit hospital world after the Affordable Care Act became law. Hospitals made money from waves of new patients insured under the ACA, but now the wave is receding. Tenet Healthcare will become the latest in the sector to report earnings, Monday afternoon.

There’s another factor pinching profits, too: that more and more patients are on high-deductible insurance plans. 

“The rise in co-pays and deductibles are causing people to not pay them,” said Sheryl Skolnick, director of research at Mizuho Securities. “The hospital once again is left holding the bag.”

Plus a flurry of mergers left hospitals bigger but loaded down with debt. And then there are the hospitals in states that didn’t expand Medicaid under the Affordable Care Act. 

“They’re really not benefiting as much as people originally thought, if you roll back the clock to sort of, 2012, 2013,” said Chris Rigg, senior managed care and healthcare services analyst at Susquehanna Financial Group.

Looking ahead to 2016, Rigg said hospital profits should be up, modestly.

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