Healthcare 2H26 Outlook and Global Conference Preview

Research evidence excerpt

Healthcare 2H26 Outlook and Global Conference Preview

ormance. State Medicaid supplemental payment programs remain an important and

volatile offset, with program approvals (Georgia, Texas for HCA; Georgia for CYH) providing

meaningful upside that is difficult to forecast. Against this backdrop, both companies are

leaning into AI and digital transformation — ambient listening, case management automation,

and administrative simplification — as a medium-term lever to improve operating efficiency

and physician experience, even as near-term cost investments weigh modestly on margins.

We are excited to host skilled nursing facility operator PACS Group this year as the company

continues to execute on its growth strategy while moving past its lengthy internal audit,

which spanned 2025. Fresh off a solid first quarter beat and full year guidance raise, we believe

that PACS’ strong clinical stats (much like peer ENSG) should quell any lingering concern over

Optum West’s clinical review activity and its potential impact on the SNF operators in our

coverage. We look forward to more insight into PACS’ managed care contracting and skilled

mix developments at the conference next week.

Senior housing operators BKD, PNTG, and SNDA are benefiting from a favorable supply-

demand backdrop, with occupancy continuing to climb across all three operators. The

structural scarcity of new supply — a product of years of limited development — combined

with accelerating 75+ demographic demand is providing a runway for sustained RevPOR and

RevPAR growth. Each company is achieving solid mid-single-digit increases in street rents with

encouraging stickiness, and the spread between revenue and expense growth per occupied