In the hospital, health care, nursing homes and life care facilities industry, the All America First Team awards again go to Glenn Wagner of Morgan Stanley & Co. Mr. Wagner was last year's winner in this category.

Stepping up this year to second team from the 1991 third team was Edward Menigan of Fitch Investors Service Inc.

Health care has been in the news a lot lately, and Mr. Wagner is happy to report that some of the news is good this year. "The industry as a whole has improved over the last year and margins last year were the highest they've been in the past five years," Mr. Wagner said.

That's good news for an industry that has had its share of trials as competition and health care reform give issuers big revenue headaches. Mr. Wagner said those two factors have prompted many health-care providers to tap the credit market for funds to stay abreast of this rapidly changing industry.

"There have been a lot of new dollar issues, largely by hospitals that want to reposition themselves to take advantage of the trend toward more ambulatory care and more outpatient services," he explained. A good deal of the money is being spent on plant reconfigurations, he added.

Keeping an Eye on Regulators

Watching the regulators remains one of Mr. Wagner's preoccupations as changes in federal and state laws impact the way hospitals finance their operations. One state he singled out is New Jersey, where last year's move to change reimbursement programs is facing some problems.

"The legality of the state's rate-setting system is a concern," he said.

And once the presidential election is over, Mr. Wagner expects the regulatory reform process might speed up, especially at the federal level.

"If Gov. Bill Clinton is elected, it's very clear that in a rather short time frame there will be dramatic health-care reforms implemented," he said. Just how they will impact health-care provider& is still unclear, he continued.

"Clearly, something has to change nationally in terms of arresting runaway health-care costs," he said, noting that those costs now run about 14% of gross national product.

Some Noteworthy Performers

In general, Mr. Wagner said he believes investors across the nation have been able to take part in the growth in health-care issues. He was reluctant to single out any big gainers among the hundreds available, but he did say that three issues he named last year continue to perform well.

"The St. Luke's Hospital in Phoenix is doing extremely well and, given its high coupon rate, would probably have been refunded had they not tarnished their name some years ago," he said. That happened when the hospital threatened to forego interest payments to investors.

In addition, Mr. Wagner's good outlook for Cape Cod Hospital, and Hinsdale Hospital in Illinois, proved sound over the course of the year.

Progress on Data Base

Another project that has shown progress is Mr. Wagner's data base of health-care issues. The program was designed to help Morgan Stanley's investors identify the health-care investments that are stabilized or are improving.

So far so good," he said. "We're making a lot of headway in that regard."

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