Hospitals Headed for Rough Quarter

Going forward, Feinstein sees lingering problems for the hospital group as a whole. Indeed, he points to bad debt from the uninsured -- which has dogged the industry for years -- as the biggest challenge of all.

"Our extensive channel checks suggest that bad debt expense has not improved (with little improvement in the uninsured population) and will likely continue to persist at current levels for the remainder of the year," he says. "Although we believe that bad debt expense will be stable, we are now pushing back our expectation for improvement until next year. (And) it is our contention that bad debt expense must improve for the group to trade higher from current levels."