Health care stocks reacts to 'fiscal cliff' deal
Physician staffing and medical service companies trade higher after 'fiscal cliff' bill passes
NEW YORK (AP) -- Shares of companies that provide medical services rose Wednesday as Wall Street looked for winners and losers in the "fiscal cliff" compromise.
Congress on Tuesday passed a bill that prevents an increase in income taxes for the middle class and the poor, and delays decisions on more than $100 billion in defense and domestic spending cuts. The compromise measure blocks a sharp cut in Medicare payments to doctors, but Medicare payments of all types will remain a major issue in the months to come as the government tries to tackle other spending issues.
Jefferies & Co. analyst Brian Tanquilut said the bill replaces the big physician reimbursement cut with smaller cuts to payments for dialysis providers and diagnostic imaging providers. He said payments to hospitals may be reduced later.
— Shares of Mednax Inc., which specializes in neonatal, pediatric cardiology and anesthesiology services, added $3.61, or 4.5 percent, to $83.13. Shares of medical service provider IPC The Hospitalist Co. rose $1.26, or 3.2 percent, to $40.97.
— Shares of physician staffing services company U.S. Physical Therapy Inc. gained 36 cents to $27.90, and rival Team Health Holdings Inc.'s stock advanced $1.59, or 5.5 percent, to $30.36.
— Shares of the largest publicly traded dialysis companies were mixed, as DaVita Inc. shares fell $2.17, or 2 percent, to $108.36, while Fresenius Medical Care AG shares rose 7 cents to $34.37.
— Shares of diagnostic imaging company Radnet Inc. gave up a penny to $2.52.
— Shares of acute care facilities company Kindred Healthcare Inc. rose 14 cents to $10.96, while nursing home owner Skilled Healthcare Group Inc. picked up 11 cents to $6.48.
SFG Research analyst Chris Rigg said the Medicare changes in the bill are "generally manageable," but healthcare stocks will trade around their current prices for another two to four months while the bigger issues are worked on.
"We view the bill passed as a down payment on a much larger bill later this year," Rigg said.
