October 22, 2015
by Eleanor Kennedy
It has not been a good day for Franklin-based Community Health Systems. As of market close, the company’s shares were down 35.14 percent on the day, having set a new 52-week low of $25.36.
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Like its Nashville neighbor HCA Holdings Inc. did last week, CHS (NYSE: CYH) previewed its third-quarter earnings after the market closed Wednesday. And like HCA’s, those earnings fell short of expectations, leading to drops in share prices for both CHS and its peers.
The combination of a weak payer mix (one that’s shorter on lucrative private pay insurance and higher on the uninsured and government-covered population) and soft admissions in the quarter may verify what HCA’s rough preview foretold: The hospital company Obamacare boom may be over.
And shareholders are not having it.
In addition to CHS’ tumble, both HCA and Brentwood-based LifePoint Health took hits today as well, of 7.19 percent and 16.59 percent, respectively, also as of shortly before 1 p.m. HCA’s preview last week also led to stock price tumbles for other players in the industry, though the drops were not as significant and prices recovered the next day.
As with HCA’s preview, however, one day does not a crash make, nor does one quarter spell disaster. Official earnings reports from the companies start rolling out next week.