(Reuters) - Hospital operator HCA Holdings Inc, the largest U.S. for-profit hospital operator, suggested benefits from the Affordable Care Act (ACA) would taper off over the rest of the year, a warning that weighed on the stocks of hospital operators.
The signature healthcare law, popularly called Obamacare, covers medical insurance for Americans and has helped in boosting business for various hospitals and insurers as more people avail of insurance.
HCA reported a better-than-expected quarterly profit and revenue driven by an increase in admissions and emergency room visits, but executives suggested that the rise in enrollments would slow down for the rest of the year.
HCA’s shares closed down about 2 percent. LifePoint Health Inc closed down about 4 percent, Tenet Healthcare about 4.3 percent, Community Health Systems about 4 percent and Universal Health Services about 1.5 percent.
“...Hospital stocks are off today as HCA comments that the ACA benefit is annualizing has clearly spooked the investment community regarding the potential upside from health reform,” Oppenheimer analysts wrote in a note.
But HCA said that after the slowdown this year, the rate of enrollments could pick up again next year as patients seek to avoid the rise in tax penalties levied on the uninsured.
Wall Street analysts agreed with the view.
HCA, which operates about 168 hospitals and 112 independent surgery centers in the United States and UK, said it expected full-year profit towards the high end of its previous forecast of $4.90-$5.30 per share.
Same-facility emergency room visits increased 7.4 percent to 1.98 billion during second quarter ended June 30, while same-facility patient admissions rose 4.1 percent to 459.7 million.
Nashville, Tennessee-based HCA earned an adjusted profit of $1.37 per share on revenue of $9.90 billion.
Analysts on average had expected a profit of $1.34 per share on revenue of $9.82 billion, according to Thomson Reuters I/B/E/S.
Reporting by Rosmi Shaji in Bengaluru; Editing by Don Sebastian and Savio D'Souza