S&P: PPACA temporarily helps top line for some hospitals, insurers

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The Patient Protection and Affordable Care Act might have boosted the top line for some healthcare providers and health insurers, Standard & Poor's Ratings Services has concluded from second-quarter financial results.

That positive financial impact is expected to continue in 2015 as the implementation of the health insurance exchanges and Medicaid expansion continues. However, in the long-term, insurers with poor pricing power and scale and providers that don't adequately adapt to the changing healthcare landscape will likely be hurt by the PPACA, according to S&P.

S&P maintains a negative outlook for the hospital sectors because of reductions in disproportionate share payments and other reimbursement pressures. The insurance industry has a stable outlook, however, based on S&P's view that most health insurers have enough fiscal strength to weather a moderate level of temporary earnings strain.

 

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