HOME ZACKS RESEARCH FUNDS PORTFOLIO BROKER RESEARCH MARKETS SCREENING EDUCATION SERVICES
Zacks Rank    Equity Research    Premium Home    My Account    Help    

Earnings Estimates Revisions
They're the most powerful force driving stock prices, and the key to the Zacks Rank's market-beating track record. Click here to learn more.
Quote:
Login Free Membership
Search:

 
Analyst Blog  

Cuts in Healthcare Spending

June 15, 2009 | Comments: 0
Recommended this article (1)
CYH | UHS
Print    Share

On Saturday June 13, 2009, President Obama announced new Medicare and Medicaid spending cuts aimed at reducing government spending by an additional $313 billion over 10 years to pay for healthcare reform. The amount will be in addition to the $635 billion “downpayment” included in his FY 2010 Budget.

The actual breakdown of the $313 billion proposed cuts includes: $110 billion in productivity adjustments to Medicare payment updates; $106 billion in reduced hospital subsidies for treating the uninsured as coverage increases; $75 billion from Medicare Part D drugs; and, $22 billion from “Other.”

The President added that these measures would extend the solvency of Medicare’s Hospital Insurance Trust Fund by seven years to about 2024, and reduce beneficiary premiums for physician and outpatient services by about $43 billion over the next 10 years. As Congress continues to draft legislation, it remains to be seen whether the government will take a position or gain the necessary support for a “public fund” option.

We currently rate both our hospital operators, Community Health Systems Inc. (CYH - Analyst Report) and Universal Health Services Inc. (UHS - Analyst Report), with Hold recommendations. Nonetheless, our preferred exposure in the sector would be in UHS given its relatively well-diversified revenue mix and the growing contribution of higher margin behavioral services.

Email

Print

Share

RSS

Rate Pos

Rate Neg

Comment
Read/Post Comments (0) | Recommended this article (1)
 Posting Comment...
There was a problem posting this this comment. Please try back later.
[CLICK TO CLOSE X]
Comments (Limit 1000 Characters - Used: 0)
Display Name: Email Address:  
 Loading Comments...
Be the first to comment on this article!

More Zacks Resources

Market Summary Nov 07, 2009 16:41 pm ET
DJIA 10023.42  17.46 0.17%
NASD 2112.44  7.12 0.34%
S&P 500 1069.3  2.67 0.25%
Sponsored Links