Investors will be watching beginning this week to see if hospitals maintained admission and outpatient volumes during the second quarter.
The start of second-quarter earnings releases will see publicly traded hospitals trying to match fairly tough comparable numbers from last year. There was also one less weekday in this year's second quarter to provide services.
"We'll be looking for them to reiterate (earnings) guidance for the year," said Brian Tanquilut, senior vice president of healthcare equity research at investment firm Jefferies & Co.
Giant HCA kicks off the hospital earnings season on July 25 followed over the next several days by Tenet Healthcare Corp., Community Health Systems, LifePoint Health and Universal Health Services.
Tanquilut said hospitals and their physician service vendors such as Envision Healthcare are coming to grips with "a new normal" of slowing admissions growth.
Hospitalizations are rising at 1% to 2% annually today vs. 3% to 4% in the years following the Affordable Care Act and related state Medicaid expansions.
Growth in the ranks of the newly insured from the ACA have flattened and nearly full national employment means few new people are getting employer-sponsored insurance to juice volumes, Tanquilut said, adding that dynamic also could begin to affect outpatient volumes. Envision recently throttled back guidance for growth in same-store ambulatory surgery volumes from the mid-to-high single digits to the low-to-mid single digits, Tanquilut said.
Despite concerns about a repeal of the ACA, investors in hospital stocks have stuck with them given the ability of management to navigate the choppy waters.
The Modern Healthcare Hospital Stock Index, encompassing nine major hospital companies, is essentially flat since the U.S. House of Representatives passed its version of ACA replacement on May 4.