Hospital stocks plunged Thursday in the wake of Community Health Systems revealing disappointing results in the third quarter.
The Modern Healthcare Hospital Stock Index, which tracks publicly traded hospital chains, fell 12.5% to 607.9 by the close of trading Thursday.
CHS said Wednesday after markets closed that patient admissions fell about 2 percent at its established locations in the quarter, and it saw a decrease in the percentage of people covered by commercial insurance, which offers the best reimbursement. The Franklin, Tennessee, chain expects adjusted earnings for the quarter that ends Sept. 30 to be 56 cents per share.
Community's earnings preview came a week after HCA Holdings. also said it would miss expectations for the quarter and that it was hit by higher labor costs and a greater percentage of uninsured patients.
Analysts say they don't see a lot of common themes in the previews so far, and they aren't sure whether disappointing patient totals will stick around at these hospitals.
Goldman Sachs analyst Matthew Borsch said in a research note that hospitals have seen several quarters of patient growth as the Affordable Care Act expanded patient coverage to the uninsured, and this may be a "big chill" on that.
Hospitals generally do more business in the year's final quarter. Many patients by then have met their insurance deductibles, or the amounts they have to pay out of pocket before most coverage starts. They then try to schedule treatments like elective surgeries in the final months of the year before the deductible renew in January. Analysts expect business to improve in the fourth quarter.