New insurance coverage for the patients most responsible for healthcare providers’ bad debt means hospital stocks should have a positive 2014, Modern Healthcare reports.
Healthcare provider stocks gained an average of 44 percent in 2013, said RBC Capital Markets analyst Frank Morgan, and that should continue in 2014. The outlook is best for hospitals in states that expanded Medicaid—so, no, not Texas—there also was optimism that more states will eventually expand.
“It’s a huge benefit to have a state expand—I think that’s an obvious statement,” said Ralph Giacobbe, an analyst at Credit Suisse. He added that Medicaid patients are three times more likely to access care than people without coverage. “The numbers certainly suggest that if someone has coverage, their utilization is higher.”