J.P. 摩根-美股-医疗保健行业-医疗设施与管理式医疗：COVID-19更新与萧条展望-2020.4.3-123页.pdf

1North America Equity ResearchApril 3,2020Healthcare Facilities&Managed Care Gary Taylor AC212-622-J.P.Morgan Securities LLCH E A L T H C A R E F A C I L I T I E S&M A N A G E D C A R ECOVID-19 Update&Recession OutlookDiversified HMOs|Govn HMOs|Acute Care|Sub-Acute|Outpatient|Outsourced ServicesSee the end pages of this presentation for analyst certification and important disclosures,including non-US analyst disclosures.J.P.Morgan does and seeks to do business with companies covered in its research reports.As a result,investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report.Investors should consider this report as only a single factor in making their investment decision.Client Conference CallFriday April 3,20201:00PM Eastern TimeContact us for dial-in detailsMichael Ha212-622-J.P.Morgan Securities LLC2SUMMARY:COVID-19&Recession Impacts for Payors/ProvidersPage 3Our Coverage UniversePage 5Portfolio Manager SummaryPage 8 Estimate ChangesPage 13COVID-19 Impact on Payors&ProvidersPage 37Recession Impact on Payors&ProvidersPage 65Political UpdatePage 69Company Overviews&ModelsPage 96Managed Care Market Model3Our Coverage UniverseSource:J.P.Morgan4/2/2020JPMEPS GrowthP/EEV/EBITDACompany/SubsectorTickerPriceTargetMkt CapRatingC19EC20EC21EC19EC20EC21EC19EC20EC21EAcute Care HospitalsCommunity HealthCYH$2.95na$337UW(54%)290%(22%)-8.2x9.8x8.9xHCAHCA$85.08$142$29,504OW13%(17%)27%8.1x9.7x7.6x6.8x7.4x6.5xTenet HealthcareTHC$13.81$19$1,459N45%(84%)557%5.2x32.4x4.9x6.9x7.9x6.7xTotal Market Cap$31,300Median:(1%)(5%)3%6.6x21.1x6.3x6.9x7.9x6.7xSub-Acute CareAcadia HealthcareACHC$17.78$21$1,559N(12%)(11%)2%8.7x9.8x9.6x7.8x8.0 x7.6xUniversal Health ServicesUHS$90.37$138$7,917N5%(12%)21%9.1x10.4x8.6x6.6x7.2x6.4xTotal Market Cap$9,476Median:(3%)(12%)11%8.9x10.1x9.1x7.2x7.6x7.0 xOutpatient CareDavita IncDVA$71.48$75$9,420N60%13%11%13.2x11.8x10.6x7.5x8.2x8.0 xOutsourced ServicesMednax IncMD$10.58$15$887N(36%)(68%)122%4.7x14.6x6.6x6.2x9.1x7.3xManaged Care-DiversifiedAnthemANTM$209.64$391$54,087OW22%10%13%10.8x9.8x8.6x9.1x8.2x7.8xCignaCI$169.20$282$63,619OW19%3%11%9.9x9.7x8.7x9.2x9.3x8.8xHumanaHUM$297.40$393$39,643OW23%3%14%16.7x16.1x14.1x11.9x10.6x10.2xUnited HealthUNH$237.17$316$228,158OW17%7%5%15.7x14.7x13.9x12.2x11.1x11.3xTotal Market Cap$385,507Median:21%5%12%13.2x12.2x11.3x10.5x9.9x9.5xManaged Care-MedicaidCenteneCNC$55.80$79$23,562OW31%14%5%12.6x11.1x10.6x11.4x6.1x6.9xMolinaMOH$132.41$149$8,342OW8%14%(6%)11.4x10.1x10.7x7.6x6.6x7.8xTotal Market Cap$31,904Median:19%14%(1%)12.0 x10.6x10.6x9.5x6.4x7.4x4YTD Stock PerformanceSource:J.P.Morgan,Bloomberg(updated as of 4/2/20)Healthcare facilities and managed care are at the epicenter of the COVID-19 crisis(i.e.,“who will treat the patients&who will pay for the treatment”)and have underperformed the XLV.This fundamental reality has driven enormous YTD volatility in the sector.Sentiment shifted from an initial“positive provider”/”negative payor”view to the opposite as the magnitude of direct COVID-19 costs and deferred medical procedures have been debated.Although payors&providers are generally defensive,most will be negatively impacted by the looming recession.(42.1%)(20.4%)(19.6%)(34.6%)(22.2%)(15.1%)(50.0%)(25.0%)0.0%HospitalsPayorsOtherProvidersRussell 2000S&P500XLVCoverageSectorsBenchmarks5Portfolio Manager SummarySource:J.P.MorganCOVID-19 Presents Far More Near-Term Earnings Risk to Providers Than Payors1)Our analysis suggests that the NT magnitude of lost revenue for hospitals and providers from deferred medical procedures will vastly outweigh our projections of incremental COVID-19 respiratory admissions.Further,the profitability of deferred surgical and commercial procedures is significantly higher than the anticipated profitability of COVID-19 cases even for hospitals that reach full occupancy.Provider stress-test liquidity looks adequate.Payor RBC looks extremely conservative.2)The same analysis indicates an enormous and mounting NT MLR tailwind for payors that is likely to extend through the majority of the 2Q20.This tailwind far outweighs our estimates of incremental COVID-19 medical expenses.3)When we surpass the pandemic,we anticipate a substantial backlog of deferred medical procedures will propel healthcare provider EBITDA and depress payor earnings via elevated MLR.This dynamic could begin in 2H20 and carry through 1H21.Looming Recession Holds More NT Risk for Commercial Payors Than Providers 1)Assuming a spike to 8.5%unemployment in 2Q20,commercial group enrollment would decline 5%,Medicaid enrollment could increase 6%,ACA HIX enrollment could increase 9%.Medicare fundamentals are the least economically sensitive and would experience little impact.In this recession we believe commercial group margins could perform better,at the expense of ACA HIX margins.2)Payor earnings power is more defensive than the S&P 500,but earnings did decline in 2008 due to commercial group coverage losses the COVID-19 MLR tailwind will defray much of the negative operating leverage from coverage losses in 2020.3)Generally provider EBITDA does not decline in a recession even though patient volumes and payor mix weaken due to the powerful countercyclical increase in available supply of clinical labor.COVID-19 is likely to mute this effect in 2020,but we expect a strong benefit in 2021 as we surpass the pandemic.6Portfolio Manager SummarySource:J.P.MorganPositioning&Top PicksLong Term:We still favor payors vs providers but concede that nearly all valuations look attractive given defensive business models and no obvious solvency risks.We advise dollar-cost average purchases through the market decline.We still favor Medicare over Medicaid over group commercial over ACA(HIX).Near Term:All providers are likely to miss 1Q/2Q20 earnings,and most will withdraw earnings guidance.We expect payors to materially beat 1Q/2Q20 EPS on lower MLR.This is a completely consensus view and is now largely reflected in the stocks.Wed inclined to be buyers of the declines in all but the most debt-levered companies.1)We still favor Medicare fundamentals and HUM(the simplest story in healthcare-JPM Analyst Focus List).We believe there is margin upside in 2020+much more limited recession risk in 2021/2022.Humana Inc.$298.75,Overweight,Dec 2020 price target=$393.2)We like CNC as a relatively cheap stock with near-term Medicaid and HIX enrollment tailwinds and possibly material 1H20 MLR upside.CNCs core Medicaid business will benefit from recession,and its sizable Medicare business should be stable.Centene Inc.$56.12,Overweight,Dec 2020 price target=$79.3)We want investors to dollar-cost average HCA(best house in a terrible neighborhood)through the near-term volatility and likely terrible 2Q20 results and withdrawn guidance.“If you wait to buy it until we surpass the virus and deferred procedures are accelerating,you will have missed a sizable move”.HCA Inc.$83.73,Overweight,Dec 2020 price target=$139.7Although deferrals are currently running close to 100%,we are modeling 20%deferral of elective procedures across the full 2Q20,then a fairly sharp re-acceleration beginning in July.Our economists project a“V-shaped”recovery featuring a 5%increase in unemployment to a peak of 8.4%in 2Q20,then nearly two years to return to 3.5%.Both assumptions have material implications for our 2020-2021 estimates.Source:J.P.Morgan estimates,BLSSummary of Estimate Changes for COVID-19+RecessionU.S.Unemployment Rate by Quarter(2007-2010)U.S.Unemployment Rate By Quarter(2016-2021)8PAYORS:2020-2022 Model ChangesSource:J.P.MorganOur 2020 revisions driven by employer-sponsored group health coverage would be higher were it not for the net MLR benefit we estimate from COVID-19 less deferred procedures.We estimate all payors will face 2021 yty MLR headwind from rebounding deferred procedures.2022 revisions are primarily driven by losing two years worth of previously-modeled commercial enrollment growth as unemployment spikes and then slowly recovers.UNHs larger 2021 revision is driven by materially lower expected earnings from OptumHealth and OptumInsight both units suffered materially during the last recession.EPS ESTIMATE Revisions-JPMeNEW vs.PREV EPS(JPMe)PREVPREVPREVNEWNEWNEW%EPS$202020212022202020212022202020212022UNH$16.42$19.03$22.00$16.16$17.03$21.06(2%)(11%)(4%)CI$18.41$20.44$22.76$17.51$19.43$22.00(5%)(5%)(3%)ANTM$22.27$25.74$29.14$21.44$24.29$27.85(4%)(6%)(4%)HUM$18.64$21.89$25.59$18.44$21.06$24.65(1%)(4%)(4%)CNC$4.69$5.56$6.45$5.04$5.27$6.517%(5%)1%MOH$12.10$12.96$14.21$13.17$12.42$14.559%(4%)2%MEDIAN(1%)(5%)(4%)PREVPREVPREVNEWNEWNEW%YTY%2020202120222020202120222022/19UNH9%16%16%7%5%24%39%CI8%11%11%3%11%13%29%ANTM15%16%13%10%13%15%43%HUM4%17%17%3%14%17%38%CNC6%19%16%14%5%24%47%MOH5%7%10%14%(6%)17%26%MEDIAN7%16%14%9%8%17%39%9PROVIDERS:2020-2022 Model ChangesSource:J.P.MorganOur 2020 revisions are primarily driven by material revenue loss from COVID-19 less deferred procedures.We estimate all providers will see improving EBITDA from rebounding deferred procedures in 2H20-1H21.2022 revisions are primarily driven by lagging recession impact on healthcare consumption.Given DVAs defensive top line,we estimate sequestration hiatus offsets incremental labor costs.NOTE:“PREV”estimates reflect JPMe as of 4Q19 model updates.EBITDA ESTIMATE Revisions-JPMeNEW vs.PREV EBITDA(JPMe)$in mmPREVPREVPREVNEWNEWNEW%EBITDA202020212022202020212022202020212022HCA$10,428$11,044$11,689$9,078$10,363$11,173(13%)(6%)(4%)THC$2,816$2,950$3,090$2,394$2,829$2,997(15%)(4%)(3%)CYH$1,656$1,714$1,803$1,374$1,512$1,660(17%)(12%)(8%)UHS$1,894$1,962$2,062$1,670$1,884$2,039(12%)(4%)(1%)MD$459$436$435$373$392$415(19%)(10%)(5%)DVA$1,544$1,606$1,665$1,548$1,592$1,6500%(1%)(1%)ACHC$581$613$645$548$578$610(6%)(6%)(5%)MEDIAN(13%)(6%)(4%)PREVPREVPREVNEWNEWNEW%YTY%2020202120222020202120222022/19HCA6%6%6%(8%)14%8%13%THC4%5%5%(11%)18%6%11%CYH2%4%5%(16%)10%10%2%UHS4%4%5%(8%)13%8%12%MD(8%)(5%)(0%)(26%)5%6%(17%)DVA(12%)4%4%(11%)3%4%(6%)ACHC2%6%5%(4%)5%6%7%MEDIAN2%4%5%(11%)10%6%7%10Dec 2020 Price Target ChangesSource:J.P.Morgan estimatesWe had increased most of our price targets heading into 2020,eliminating substantial discounts for political/sentiment overhang and also to reflect the recent broader market move higherHealthcare Facilities&Managed CarePrice Target GuideMkt Cap CriteriaImplied2021Large Cap($10b)Mkt Cap($m)RatingCurrent PricePrior TargetNew Target PriceReturn to Target2019 P/E2020 P/E2021 P/ETarget 21P/EEV/EBITDAUNH$231,303OW$240.44$361$31631%15.9x14.9x14.1x18.8xANTM$54,539OW$211.39$391$32453%10.9x9.9x8.7x13.5xCI$63,473OW$168.81$282$25652%9.9x9.6x8.7x13.4xHCA$29,097OW$83.90$143$14269%8.0 x9.6x7.5x12.9x8.5xHUM$23,799OW$300.11$448$39431%16.8x16.3x14.2x18.9xCNC$23,799OW$56.36$88$7940%12.8x11.2x10.7x15.2xUHS$7,771N$88.71$119$13856%9.0 x10.2x8.4x13.2x8.6xRelative Index=SP500$2,52715.4x16.4x14.0 xMid-Cap($2-10b)DVA$9,174N$70.30$75$757%13.0 x11.6x10.4x11.3x8.2xMOH$8,409OW$133.48$152$14912%11.5x10.1x10.7x12.1xTHC$1,394N$13.19$19$1944%4.9x31.0 x4.7x7.0 x6.9xACHC$1,550N$17.68$33$2119%8.7x9.7x9.6x11.7x8.1xMD$870N$10.45$20$1544%4.7x14.4x6.5x9.8x7.7xRelative Index=SP400$1,37513.4x14.3x12.1xSmall Cap(13,010-62,214ICU Beds NeededICU Beds AvailableICU Bed Shortage11,621-718-10,903New York State-IHME Utilization Model75,22411,6219,29710.3k current hospitalizations20IHME Utilization ModelPolitics&PolicyRecessionCOVID-19IHMEs model projects peak hospitalizations of 260k during the last week of April.Although the industry handles 400k annual influenza hospitalizations,those cases primarily present over a 4-month period Nov-Feb(100k/month,25k/week).While we are skeptical of IHMEs projections,the capacity constraint is obvious even cutting their projections by half or more.Source:https:/penn-chime.phl.io/Source:https:/covid19.healthdata.org/projectionsIHME United States Utilization ModelAll Beds NeededAll Beds AvailableBed Shortage260,342-175,671-84,671ICU Beds NeededICU Beds AvailableICU Bed Shortage38,849-19,944-18,905United States-IHME Utilization Model260,34238,84931,0820204060801001204/5-4/11 4/12-4/184/19-4/25 4/26-5/25/3-5/9 5/10-5/165/17-5/23(MN)State-level Population by Weekly Peak Hospital Utilization Timing21Our Approach and ModelPolitics&PolicyRecessionCOVID-19IHMEs model currently projects U.S.deaths(100-240k)will be 1.0-2.5x worse than Italys per-capita extrapolation to the U.S.We hope this proves extremely conservative.Source:J.P.Morgan Estimates,Johns Hopkins University.Updated as of 4/2/20Italy Extrapolation Math Applied to U.S.%of Italy Per Capita Experience:50.0%100.0%ItalyU.S.U.S.Population(mm):61326326CURRENTCompletion%-CURRENT(%of END STATE DEATHS)71.0%10.3%5.1%Cases1:110,574 216,722 216,722 Deaths:13,155 5,137 5,137 Deaths/Population0.0217%0.0016%0.0016%Cases/Population0.1828%0.0665%0.0665%EXTRAPOLATED MATH PROJECTION-U.S.Completion%-END STATE PANDEMIC100.0%100.0%100.0%Cases:155,738 419,592 839,183 Cases/Population0.25742%0.12871%0.25742%Deaths/Population0.03063%0.01531%0.03063%SCENARIOS:Hospitalizations&DeathsHospitalizations:(1)High(50%of Reported Cases)77,869 209,796 419,592%Impact on Annual U.S.Admissions20.2%0.6%1.2%(2)Low(Greater of 10%of Cases OR 5x Deaths)92,641 249,594 499,189%Impact on Annual U.S.Admissions20.3%0.7%1.5%Deaths:18,528 49,919 99,838 MLR IMPACT:(1)High MLR Case(bps)+62bps+125bps(2)Low MLR Case(bps)+26bps+52bps(3)Death MLR Case(bps)+31bps+62bpsn(1)Italy has far higher testing rates per capita than most other countries(2)Annual U.S.Hospital Admissions estimate of 34m22COVID-19:PAYORSPolitics&PolicyRecessionCOVID-1923PAYORS:SUMMARYPolitics&PolicyRecessionCOVID-19COVID-19 Presents Significant Near-Term Earnings Upside for Payors1)Our analysis suggests that the near-term magnitude from deferred medical procedures will vastly outweigh our projections of incremental COVID-19 respiratory admissions and testing costs.2)This analysis indicates an enormous and mounting near-term MLR tailwind for payors that is likely to extend through the majority of the 2Q20.3)When we surpass the pandemic,we anticipate a substantial backlog of deferred medical procedures will depress payor earnings via elevated MLR.This dynamic could begin in 2H20 and carry through 1H21.Even so,we estimate a net MLR benefit for the full year of 2020 and a subsequent yty headwind for 2021.4)Risk-based capital(RBC)levels appear extremely conservative vs any conceivable COVID-19 expense increase.A plan with 500%RBC(slide 58)&85%MLR would have to face 117.5%MLR before statutory capital would be exhausted(or a near doubling of inpatient costs for example).24PAYORS:Medical Expense BreakdownSource:J.P.Morgan,MillimanPolitics&PolicyRecessionCOVID-19History has shown fairly inelastic demand for prescriptions(even though approximately 1/3 are episodic vs chronic/maintenance).Outpatient is viewed as more deferrable than inpatient.With the exception of emergency services,much of the U.S.health services infrastructure is currently idle.%Share of U.S.