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Healthcare analyst Tom Tobin and Health Policy analyst Emily Evans reviewed their best stock ideas (removing MDRX and SYK from the Position Monitor), major healthcare themes and more.
OVERVIEW
Tenet Healthcare Corp (THC): We can get THC well into the $30s on our 2020 EBITDA estimate. While they haven't covered themselves in glory in the last two quarters, same facility adjusted admissions appear likely to continue to post solid results. We also think the new ASC rule for high acuity cases can be the catalyst for net market share gain through USPI.
Medicare Hospital Outpatient Rule: Medicare has proposed that total knee replacements would be added to the covered procedure list along with a number of cardiac procedures. It has also proposed removing total hip replacement from Inpatient Only List. These moves are designed to provide other options for sites of care beyond the inpatient acute care hospital.
AMN Healthcare Services, Inc. (AMN): The worst may be over; from the #ACATaper, to client cancellations, premium pricing headwinds, and a botched technology roll-out. However, voting to strike Kaiser ends early next week and the impact is difficult to determine.
Cannabis Regulation: We were surprised that GWPH received no questions on its earnings call this week on the efforts at the FDA to regulate cannabis, especially given the agency's concerns about stifling innovation if they open the food additive and dietary supplement channels too widely.