Fitch issues stable outlook for US healthcare
Fitch Ratings' outlook on the healthcare sector is stable, as the sector faces a low risk of deteriorating fundamentals but high levels of event risk due to regulatory and political uncertainty.
The rating agency's outlook on the sector incorporates the uncertainty around the future of the ACA.
"Healthcare providers, specifically acute care hospital companies, have the most to lose if the ACA insurance expansion is gutted because it has resulted in more paying customers in the sector," according to Fitch.
The rating agency also noted the issues involved in the drug pricing debate. Fitch said some drug manufacturers' practice of taking advantage of supply dislocations to increase prices on established products is "not a defensible business model in the long term." Fitch said companies that launch truly innovative new drugs will continue to command pricing power.
In 2017, Fitch forecasts mid-single digit organic EBITDA growth for most healthcare companies.
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