Shares of two Orange County-based nursing home companies rose Wednesday on news of lower-than-expected Medicare cuts in a federal healthcare reform proposal.
Foothill Ranch-based Skilled Healthcare Group Inc.’s shares closed up 8% with a market value of about $322 million on Wednesday, and Irvine-based Sun Healthcare Group Inc., Orange County’s largest nursing home operator, closed up 5% with a market value of $403 million.
Shares of OC’s third major nursing home company, Mission Viejo-based Ensign Group Inc., closed up 2% Wednesday with a market value of $316 million.
Analysts said that the stocks of Skilled and other nursing home companies were likely up because of less-severe Medicare pay cuts than expected in an $856 billion healthcare reform bill unveiled Wednesday by Sen. Max Baucus (D-Mont.), chairman of the Senate Finance Committee.
Of the three companies, Ensign received 32% of its $132 million in second-quarter revenue from Medicare. Sun received 29% of its $469 million in revenue from Medicare, while Medicare accounted for 36% of Skilled’s $193 million second-quarter revenue.
