- Analysts agree that the second quarter is likely to be positive for publicly-traded hospital companies as a result of healthcare reform and Medicaid expansion.
- Q2 is also likely to look better than the previous quarter because of bad winter weather that kept utilization rates low and the fact that open enrollment had closed before the start of Q1.
- According to Brian Tanquilut, an analyst at Jefferies & Co, utilization for elective and non-urgent procedures is picking up. “I think volumes will be better in the second quarter compared to the first,” Tanquilut said.
The boost in the volume of insured patients is likely to vary with location. According to the Kaiser Health Foundation, out of 13.5 million eligible individuals, 8 million had selected a marketplace plan as of April 19—a 59% national average. In California, that average is 74%, while in Tennessee, only 49.5% of eligible individuals signed up. Texas and Florida are also on the lower end of the scale, at 53% and 61%, respectively.
But according to Megan Neuburger, an analyst at Fitch Ratings, the bigger impact on hospitals' bottom lines is likely to come not from reform, but from Medicaid expansion.
“That's really where you could see that the difference was very dramatic,” Neuburger told Modern Healthcare. “As we go down the road, it's going to be hard to ignore the financial incentives for expansion.”