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hospital stocks poised for recovery as budget clarity emerges
Deutsche Bank suggests that investors consider buying publicly traded hospital stocks, which have fallen 18% since September due to concerns over potential Medicaid cuts. Analyst Pito Chickering believes the selloff is overblown, as no senators support cutting Medicaid, and expects clarity on federal budget policies to boost investor confidence. Despite challenges like rising costs and labor shortages, hospital operators showed signs of recovery, with the S&P Composite 1500 Health Care Facilities index rising 2.4%.
hospital mergers and acquisitions face increasing cancellations and terminations
Trinity Health Mid-Atlantic abandoned its plan to acquire Tower Health's Chestnut Hill Hospital in January 2022, part of a broader trend where over 29 hospital mergers, acquisitions, and partnerships were called off in recent years. Notable cancellations include Community Health Systems' $120 million sale of Commonwealth Health and Novant Health's $320 million acquisition of two hospitals, both facing regulatory hurdles. Other significant deals, such as the merger between Presbyterian Healthcare Services and UnityPoint Health, were also terminated after extensive negotiations.
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