Published on 27 May 2024 on Zacks via Yahoo Finance

5 Hospital Stocks Set to Gain From Robust Industry Trends

The near-term prospects of the Zacks Medical-Hospital industry will be shaped by various factors, including rising patient volumes, resumption of elective procedures, and technological and cybersecurity advancements. While increasing salaries and moderate staffing constraints will play a deterrent, the effects of it would be largely offset by higher revenue per admission. Consolidation activities are making a strong comeback in the hospital space.Capacity expansions are expected to be prevalent as hospital companies aim to capture greater market share in a fragmented industry. Investments in technological upgrades will likely provide a competitive edge. Companies like HCA Healthcare, Inc. HCA, Tenet Healthcare Corporation THC, Universal Health Services, Inc. UHS, Acadia Healthcare Company, Inc. ACHC and Community Health Systems, Inc. CYH will capitalize on these trends.

Industry Overview

The Zacks Medical-Hospital industry comprises for-profit hospital companies that provide healthcare through different types of hospitals, such as acute care, rehabilitation and psychiatric. These hospital entities are engaged in internal medicine, general surgery, cardiology, oncology, neurosurgery, orthopedics and obstetrics, telehealth services, mental health care and diagnostic and emergency services. Revenues of these companies depend on inpatient occupancy levels, medical and ancillary services ordered by physicians and provided to patients, and the volume of outpatient procedures. These hospital companies receive payments for patient services from the government under the Medicare program, Medicaid or similar programs, managed care plans (including plans offered through the American Health Benefit Exchanges), private insurers and directly from patients.