Health care analysts who were bullish about Nashville-based hospital chains last year are picking those stocks to do well again in 2012, even though their predictions were wrong last year.

Adam Feinstein of Barclays Capital (photo courtesy Nashville Health Care Council)

The Nashville Health Care Council gets a group of big name analysts together annually. And they make their predictions and stock picks. This year, several admitted they made a mistake with hospital chains. Whit Mayo is an analyst with the firm Robert W. Baird.

“We were extremely too optimistic on hospitals. I look back and try to assess what did I mess up, where did we screw up, what could we have done differently.”

While investors believed Nashville-based HCA’s return to being a publicly traded company would lift the entire sector, the rising tide didn’t last.

Adam Feinstein of Barclays Capital says he never imagined that debt ceiling and deficit cutting debates would hit the sector so hard. He says the perceptions of how hospitals might be harmed by cuts to Medicare and Medicaid were worse than reality.

“So I think the good news, as we come into 2012, is we think there’s room for improvement in terms of how people think about these stocks.”

Feinstein and others are picking several local hospital stocks to do well, including the biggies – HCA, Community Health Systems and LifePoint.

Analysts Expect Fewer Health Care “Headlines” Out of Washington

Darren Lehrich of Deutsche Bank says he expects debates around debt ceilings and deficit cutting will calm down for this election year.

“The kicker for us, the overhang that’s staring us in the face, is what happens post-elections.”

Lehrich says he sees a push for a balanced federal budget. That, he says, would require several trillion dollars in cuts, with much of it coming from the government health care programs that hospitals have come to depend on.