Obamacare Spurs Hospital Takeovers

The Affordable Cara Act, a.k.a. Obamacare, is dramatically changing the economics of the hospital industry. Because of that transformation, we're seeing some large mergers and acquisitions as companies seek to gain the size to profit in this Obamacare world.
First, Tenet Healthcare purchased Vanguard at a 70% premium, becoming the nation's second largest publicly traded operator in the process. Tenet's CEO wanted to let it be known that purchasing Vanguard wouldn't stop it from pursuing other deals despite its size. 

Now comes the an even bigger deal" Community Health Systems is buying Health Management for roughly $3.9 billion. 

In this video, health-care analyst David Williamson discusses what these events mean for investors in the hospital sector, why they should expect the dealmaking to continue, and what his favorite hospital stock is.

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  • Report this Comment On August 04, 2013, at 5:15 PM, RFTECH3000 wrote:

    What does this mean ? nothing good I am afraid

    all those takeovers mean that we are going to end up with a few big players who then "fix" the prices for services across the country , its just like with the oil companies , most of the smaller ones disappeared by getting bought out by the big ones and now competition between the big guys is virtually non existent

  • Report this Comment On August 04, 2013, at 5:33 PM, M2HB wrote:

    One step closer to having no choices of our own, and government establishing far too much control over it's citizens.

  • Report this Comment On August 04, 2013, at 7:14 PM, doco177 wrote:

    Google.... "Obamacare Flowchart" at Intellectual Takeout .... to see a visual representation of the corrupt mess this really is

    1. Millions are losing the insurance Obama promised they could keep. Because ObamaCare forces employers to offer expensive Cadillac plans but also offers the option of paying a fine for not providing health insurance that can be cheaper than providing it, between seven and twenty million Americans are likely to lose their health insurance coverage according to the Congressional Budget Office. The original estimate was closer to four million.

    2. The cost of healthcare premiums is about to further skyrocket. Premium costs have already exploded, but that is a slow-motion explosion. In the near future, we could see costs double or worse. Naturally, these costs will hit an already burdened middle class hardest.

    3. Lost jobs. Lost jobs.

    The Federal Reserve's March beige book on economic activity noted that businesses "cited the unknown effects of the Affordable Care Act as reasons for planned layoffs and reluctance to hire more staff."

    Consulting firm Adecco found that half of the small businesses it surveyed in January either plan to cut their workforce, not hire new workers, or shift to part-time or temporary help because of ObamaCare.

    4. Doctor shortages that will mean rationing: The healthcare industry is already a bureaucratic quagmire. ObamaCare is about to add steroids. As the profession becomes tyrannized by government, the talented people currently practicing medicine plan to get out sooner than expected. Who knows how many will choose not to get in. Doctor shortages are what lead to the nightmare known as rationed care.

    5. Somewhere around $800 billion in tax increases will hit America's middle class. This added burden will not only further oppress a middle class already reeling from a drop in wages over the last few years, but could damage the overall economy.

    6. Inflation, the cruelest tax on the poor. When businesses get socked with added costs brought about by higher taxes and burdensome government mandates, they pass those cost along to the consumer in the form of higher prices.

    7. Added bureaucracy. Even those Obama lapdogs over at the Washington Post's Wonk Blog are admitting that applying for health care is about to get more burdensome than the byzantine paperwork involved in buying a home.

    8. To cut costs or to avoid having to provide insurance, workers on the economic margins are already losing hours, which means a lower paycheck. There are a million sad stories in ObamaVille; here are just a few of them.

    9. ObamaCare is projected to add $6.2 TRILLION to a deficit the GAO has already declared "unsustainable." That's "trillion" with a "t".

    10. More taxes than currently estimated are likely to hit because of situations like this one.

    11.Muslims, Amish, Native Americans, Congress are exempt from mandate and penalties under Obamacare that the rest of us have to pay.

    The govt becoming more involved in health care is the reason the costs have increased. So Govt creates a crisis, then provides a solution that comes at the expense of liberty and freedom, costs trillions, and by most accounts won't solve the problem but in fact make it far worse.Corruption, incompetence, disregard of the Constitution, and lying are integral to the way that this country is being run.

    Three years ago, Obama, Democrats, and his media lied to us about cutting the cost of health care, being able to keep our insurance, and not taxing the middle class. Today, those lies and what ObamaCare is and will do to the working and middle class are the biggest untold story in America.

    Boycott and Repeal Obamacare...If only a mere 20% of the over 300 million population of the USA boycott Obamacare the government would be overwhelmed to even think they could penalize or mandate every citizen that refused to participate in the most corrupt and unlawful ways which it was passed that circumvented the constitution of the United States.

  • Report this Comment On August 04, 2013, at 7:57 PM, roger142 wrote:

    I hope the national registry works, and expect if nothing else it might hold down hospital cost in most areas, due to more people having insurance. I know the non profit hospitals like uninsured people because they charge them 5 times more than an insurance company would pay, and then get state and or federal grants for the inflated cost.

    As for a shortage of doctors, medical schools are full, and doctors from India are moving here and joining practices.

    Due to the 80%/20% mandate that insurance companies have to spend 80% of their revenues on health care, that should also help keep cost from going up any more than usual.

    As for the hospital take overs, that indicates to me that health care companies see the ACA as a new opportunity based on volume.

  • Report this Comment On August 04, 2013, at 10:30 PM, Dadw5boys wrote:

    They take on a lot of debt others cash out and eventually they will break up and go through a reorganization writting off tons of debt. But those cashing out will not take such a hit as Medical Care Refrom is going to bring.

    So cash out and preapre for them to reorganize under bankruptcy.

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