TheStreet.com  Oct 16  Comment 
NEW YORK (TheStreet) --LifePoint Hospitals Inc. was upgraded to "outperform" from "neutral" at Robert Baird on Thursday. The firm said it raised its rating on the operator of general acute care hospitals in non-urban communities in the U.S.,...
Market Intelligence Center  Oct 9  Comment 
After Wednesday’s trading in LifePoint Hospitals Inc (LPNT) the option-trade picking algorithms that power MarketIntelligenceCenter.com's Artificial Intelligence Center uncovered a trade that offers a 3.90% return, or 10.63% annualized (for...
Market Intelligence Center  Sep 18  Comment 
For a hedged play on LifePoint Hospitals Inc (LPNT), MarketIntelligenceCenter.com’s option-trade picking algorithms recommend the Feb. '15 $70.00 covered call for a net debit in the $67.84 area. That is also the break-even stock price for the...
Market Intelligence Center  Sep 17  Comment 
A covered call identified by MarketIntelligececenter.com's patented algorithm on LifePoint Hospitals Inc (LPNT) could yield about 3.67% (8.59% annualized, for comparison purposes only) in 156 days. Pair a long position in the stock with the Feb....
Market Intelligence Center  Sep 3  Comment 
LifePoint Hospitals Inc (LPNT) traded between $73.86 and $75.20 before closing at $75.03 Tuesday and presents some attractive trading opportunities today. MarketIntelligenceCenter.com’s patented algorithms selected a Nov. '14 $75.00 covered call...
Benzinga  Aug 21  Comment 
Duke LifePoint Healthcare announced today that it has signed a definitive agreement to acquire Conemaugh Health System. The financial terms of the agreement exceed $500 million and include a commitment by Duke LifePoint to invest $425 million...
Market Intelligence Center  Aug 6  Comment 
For a hedged play on LifePoint Hospitals Inc (LPNT), MarketIntelligenceCenter.com’s option-trade picking algorithms recommend the Nov. '14 $70.00 covered call for a net debit in the $68.43 area. That is also the break-even stock price for the...
Market Intelligence Center  Aug 5  Comment 
MarketIntelligenceCenter.com's patented trade-picking algorithms have identified an attractive covered-call trade on LifePoint Hospitals Inc (LPNT). Look at the Nov. '14 $70.00 covered call for a net debit in the $67.17 area. This trade has a...
Market Intelligence Center  Aug 4  Comment 
MarketIntelligenceCenter.com's option-trade picking algorithms have identified an attractive covered-call trade on LifePoint Hospitals Inc (LPNT). Look at the Feb. '15 $70.00 covered call for a net debit in the $65.88 area. This trade has a...
SeekingAlpha  Jul 28  Comment 
ByMarshall Hargrave: LifePoint Hospitals (NASDAQ:LPNT) released earnings that blew through consensus, beating by over 50%. This comes as operating income and net income were both up over 40% year over year. Since we covered LifePoint back in July...


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LifePoint (NASDAQ:LPNT) owns and operates 47 general acute-care hospitals located throughout the United States, usually in rural areas. The company has a total of 5,552 licensed beds and serves 17 states.The demand for LifePoint's services is affected by demographic trends such as the aging of the US population and the number of people moving into and out of the rural markets where it operates. The firm's profitability suffers from the need to treat growing numbers of uninsured patients. The company earned $2.96 billion in revenue and $139 million in net income in 2009.[1]

Since its facilities, like most rural hospitals, usually have virtual monopolies in their markets, LifePoint does not compete with other large national hospital operators. Instead, it faces challenges from physician-owned hospitals and surgery centers. These specialized centers often draw off patients for the most profitable procedures, such as implanting pacemakers, leaving hospitals with less profitable patients and procedures.

Company Overview

LifePoint's 47 hospitals operate in five divisions, which are organized based on geographic location and size and complexity of the hospitals in them. All hospitals provide general inpatient services such as internal medicine, obstetrics, psychiatric care and emergency room care. The firm has also moved to provide more specialized services such as open-heart surgery and neurosurgery (to compete with nearby urban hospitals) and outpatient services such as laboratory, x-ray, and sports medicine (to compete with independent or physician owned centers). As most of its hospitals are in rural areas, LifePoint's hospitals generally do not carry out medical research or run medical schools.[2]

Sources of Revenue[3]

  • Medicare - 29.6% of net revenue
  • Medicaid - 10.3% of net revenue
  • HMOs, PPOs and other private insurers - 44.3% of net revenue
  • Self-pay - 13% of net revenue
  • Other - 2.8% of net revenue

Business Growth

FY 2009 (ended December 31, 2009)[1]

  • Net revenue increased 10% to $2.96 billion. The company benefited from a 4.6% increase in equivalent admissions and a 4.9% increase in revenue per equivalent admissions.
  • Net income increased 10% to $139 million.

Trends and Forces

Aging Baby Boomers Require More Health Care, Raising Demand for Hospital Services

The retirement of the baby boomers, who make up slightly over a quarter of American's population, has had an economic as well as demographic impact on the US population. A rapid increase in the number of elderly Americans provides an opportunity for hospital owners like Community Health, since people older than 65 generally need more medical care.[4] At the same time, the aging of the population will indirectly hurt Community Health through its effect on Medicare. The Medicare system is becoming saturated as more baby boomers reach the eligible age and need the program's coverage (Medicare expenditures comprised roughly 5% of the U.S. GDP and is expected to increase),[5] and as current reimbursement levels are not sustainable, per-patient Medicare revenues will decrease.

Trends in Urbanization Impact Potential Number of Patients

75% of the US population lives in an urban area. Urban areas are adjoining census blocks with a population density of at least 1,000 people per square mile and surrounding census blocks with a population density of at least 500 people per square mile.[6] Since the year 2000 there's been a large increase in the number of people moving into cities. In fact, only 5 of the 50 largest metropolitan areas in the country lost population between since 2000.[7] Since the population in rural areas puts a limit on the potential number of patients LifePoint's hospitals can serve(and thus the potential revenues it can earn), population demographics are an important factor in evaluating the company's prospects for earnings growth.

Ability to Attract Patients Depends on Availability of Qualified Physicians

In order to increase or even maintain the breadth of specialized services available to patients, LifePoint must be able to hire qualified physicians. This has become a challenge for hospitals as the nation begins to experience a shortage of physicians, particularly surgeons and family doctors. American physicians are getting older - in the last twenty years, the percentage of doctors over 55 years old has risen from 27% to 34%, meaning that many of them will be retiring in the coming years. In rural areas, where less than 10,000 of 212,000 physicians are surgeons, specialists are especially scarce. Rural doctors generally receive smaller salaries than their urban counterparts, adding to the challenges faced by LifePoint in its recruitment practices.[8]


LifePoint holds a virtual monopoly in most of its markets simply because its hospitals are the only providers of general acute-care services in the vicinity. This is common to most American rural hospitals and reflects years of industry consolidation. Thus, the firm's primary competition is not other area hospitals, but rather urban hospitals, where patients are increasinly moving towards specialized care. The firm competes by recruiting more specialists and investing in new technology in order to widen the range of services available to patients.

In the past several years, new types of competitors have been entering LifePoint's markets and decreasing patient volume: physician-owned hospitals and stand alone surgery and diagnostic centers New technologies have made it possible for physicians to perform procedures that earlier had to be done in a hospital. LifePoint is addressing this challenge by attempting to partner with physicians. For instance, the firm began a joint venture with physicians in Lake Havasu, Arizona, in response to the formation of a stand alone surgery center. LifePoint's hospital and the stand alone center pooled their assets and LifePoint got control of 96% of the venture.[9]


  1. 1.0 1.1 LPNT 2009 10-K "Selected Financial Data" pg. 37
  2. LPNT 2009 10-K "Operations" pg. 1-2
  3. LPNT 2009 10-K "Sources of Revenue" pg. 3-10
  4. "Aging Baby Boomers" Wikinvest Article
  5. Government Accountability Office "Medicare and Medicaid Spending as a Percentage of GDP"
  6. Missouri Census Data Center
  7. USA Today "Slump stunts Sun Belt growth" July 7 2010
  8. Davis, Robert. "Shortage of surgeons pinches U.S. hospitals." USA Today
  9. LifePoint Hospitals to Acquire Havasu Surgery Center
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