While much of the Middle Tennessee healthcare community has been transfixed by the drama unfolding between Community Health Systems and Tenet Healthcare in recent months, another local hospital company has been perhaps unfairly overlooked.
That company is LifePoint Hospitals. The Brentwood hospital chain has, in recent months, shown several signs that it’s going to be worth following in the months ahead.
For one, the 52-hospital business by far exceeded revenue and earnings expectations with its first-quarter financial results thanks to a number of positive factors — improved pricing, expense control, better Medicaid reimbursements and good performances from acquired hospitals. LifePoint’s revenues were up 13 percent in the quarter, and its income jumped by 10 cents per share — 8 cents more than analysts predicted.
Beyond that, the company’s joint venture with Duke University — a mutually beneficial partnership formed to build a network of healthcare services in the North Carolina region — recently landed its second deal, an acquisition of nine cardiac catheterization labs. Duke/LifePoint already had an agreement to buy a hospital in that state, and I wouldn’t be surprised if there are quite a few more deal announcements in the works. With Duke in its corner, analysts say, LifePoint becomes a more attractive suitor for mergers and acquisitions with hospitals in the community. The hospital company also gains access to additional clinical resources and might be able to negotiate better rates with health plans.
All this is good news for a company that in the not-so-distant-past was met with some skepticism about its operations ability relative to some of its publicly traded peers. And, thankfully for LifePoint, its performance and outlook are not going unnoticed by investors. At the time of this writing, the company’s stock was up more than 16 percent year-to-date and at its highest level since 2005.
So, just because it’s not dominating the headlines, doesn’t mean this isn’t a company worth watching.