Despite warnings from analysts that hospital stocks are likely to suffer if the GOP plan to repeal and replace Obamacare passed by the House Thursday eventually becomes law, shares of the sector were largely stable after lawmakers' dramatic vote.
In fact, shares of Community Health (CYH - Get Report) , HCA (HCA - Get Report) and Tenet (THC - Get Report) all rose in the minutes after the ballots were cast. Community was up 9 cents to $9.70 before dropping back to $9.61 and ending the day unchanged. HCA was up 63 cents for the day to $83.48 and Tenet was up 33 cents to $17.66. Two other major hospital stocks initially fell--LifePoint Health (LPNT ended the day down 40 cents at $61.70 and Quorum Health (QHC - Get Report) fell 3 cents to $4.15 before rising late to end at $4.22, up 4 cents.
One of the analysts urging investors to stay out of hospital shares was Sheryl Skolnick of Mizuho Securities.
"AVOID THE HOSPITALS--THIS IS NOT GOOD FOR THEM IN OUR VIEW," she wrote in a note after the House action, using all-caps to dramatic effect.
Skolnick said enactment of the bill would cause a rise in the uninsured and end Medicaid expansion in 2020.
Although hospitals have an opportunity to lobby for more favorable amendments before the Senate votes on the package, there is "sense that the momentum for this damaging bill has increased."
She added: "Hospitals should NOT be up, in our view."
The few good parts of the bill l-- repeal of the health insurance industry fee and repeal of cuts to hospitals serving a disproportionate share of Medicaid patients -- are "small comfort to the hospitals" if the Senate doesn't seriously amend cuts to Medicaid funding, health insurance subsidies and coverage expansion.