NASHVILLE – Attendees of today’s “Wall Street” conference at the Nashville Convention Center clutched at their programs, perusing the names of the investor panelists like bettors at the racing track.
With a presidential election in the fall and a monumental Supreme Court decision expected this summer, health care executives packed the convention hall to hear how markets are expected to perform in 2012.
“I don’t see anything stopping merger and acquisition activity. Some nonprofits are still struggling,” said Frank Morgan, managing director for RBC Capital Markets.
Darren Lehrich, managing director for Deutsche Bank, said, “Fundamentally, we’re setting up for a slightly better 2012. The kicker is the overhang of what happens post-election.”
In terms of investments, the panel members singled out HCA (NYSE: HCA), Community Health Systems (NYSE: CYH), LifePoint Hospitals (Nasdaq: LPNT), Universal Health Services (based in King of Prussia, Pa.) and HealthSouth (based in Birmingham, Ala.) as companies that are expected to perform well in 2012.
Overall, though, the panelists expect a quiet year on the IPO front, as investors still have some “scar tissue” left over from previous offerings in the health care space.
Accountable care organizations have been a hot topic, but Wayne Smith, CHS’ chairman, president and CEO, said there’s reason to approach the model with caution. “It’s another form of capitation when all is said and done,” said Smith, who moderated the event, which was hosted by the Nashville Health Care Council .
Adam Feinstein, managing director of Barclays Capital, said an agency to keep tabs on is the Center for Medicare and Medicaid Innovation Center, which was formed by Health and Human Services about a year and a half ago to help cultivate and bring new technologies to market.
Hospitals and physicians have struggled with decreasing Medicare reimbursement rates, and that is expected to continue this year, the panelists said.
A key issue will the Supreme Court ruling on whether President Obama’s Affordable Care Act will be ruled unconstitutional.
“It’s going to be impossible not to have some expansion of coverage,” said Feinstein. “It’s hard to imagine the reform bill being repealed in its entirety.”
Former Tennessee Sen. Bill Frist was among the audience members, and he gave an optimistic outlook.
“2012 will be a year of continued upside and growth,” said Frist. “Overall, equity markets will increase in the range of 5 percent to 10 percent, with the health care sector leading the way.”