The majority of for-profit hospital operators will see a cash flow boost from an increased ability to deduct capital expenditures and a lower corporate tax rate under the Tax Cuts and Jobs Act.
On an absolute basis, Nashville, Tenn.-based HCA Healthcare and King of Prussia, Pa.-based Universal Health Services will be the biggest beneficiaries from changes to the tax code, according to Jessica Gladstone, senior vice president of Moody’s. HCA, UHS and Brentwood, Tenn.-based LifePoint Health could all see operating cash flow jump 10 percent or more in 2018 under the tax code changes.
Highly leveraged for-profit hospital operators, such as Franklin, Tenn.-based Community Health Systems and Brentwood-based Quorum Health, may have to pay more in taxes. “However, these companies will likely be able to utilize net-operating loss carryforwards in 2018, mitigating the cash impact,” Ms. Gladstone said.
More articles on healthcare finance:
Partners HealthCare sees net income soar 51% in Q1
10 medical conditions with the highest average cost per inpatient stay
Baylor Scott & White sees operating income jump 80%
At the Becker's 11th Annual IT + Revenue Cycle Conference: The Future of AI & Digital Health, taking place September 14–17 in Chicago, healthcare executives and digital leaders from across the country will come together to explore how AI, interoperability, cybersecurity, and revenue cycle innovation are transforming care delivery, strengthening financial performance, and driving the next era of digital health. Apply for complimentary registration now.
