Shares of Community Health Systems Inc fell dramatically today, posting a sharp 24 percent decline in premarket trading. On Monday, America’s No 2 for-profit hospital posted its first surprising loss and today followed suit. And it seems other hospital operators—including HCA Holdings, Inc, and Tenet Healthcare Corp—were also vulnerable.
Apparently, analysts and investors are both concerned about a potential slowdown in patient volumes for many hospital operators. This comes, as you might expect, after the surge of activity from the implementation of the Affordable Care Act, aka Obamacare, which finally helped to provide health insurance—and therefore acute and preventive care—to more people than ever before.
Community Health, though, appears particularly hard hit by this slowdown. In fact, the mild flu season during the fourth quarter put pressure on the system, with rival Tenet Healthcare Corp similarly posting of a decline in patient volume, down 5.9 percent at $22.58.
In terms of reporting, Community Health Systems still posted $4.79 billion in revenue and an adjusted $0.26 per share. This includes the influence from a bad-debt allowance increase of $169 million.
Community Health Systems anticipate fiscal year 2016 revenues to reach the $20 billion to $20.6 billion range which is still in line with their $20.27 projection at a midpoint of $20.3 billion. In addition, Community Health’s EPS for this year is guided to reach between $3.40 and $3.80, although that may fall a little short of their expected $3.68 at a midpoint of $3.60.