Dive Temporary:
HCA Healthcare reported first-quarter earnings on Friday that beat Wall Avenue expectations on income. The operator posted $17.3 billion in income and a internet revenue of $1.6 billion, as affected person volumes rose and HCA managed bills.
Robust inpatient metrics drove HCA’s quantity progress, CEO Sam Hazen instructed traders Friday. Inpatient admissions grew 6% 12 months over 12 months, inpatient surgical procedures have been up nearly 2% and equal admissions grew 5%.
“Each division had progress in inpatient admissions — truly, we had one of the best portfolio efficiency, I feel, I’ve seen in my expertise within the firm,” mentioned Hazen.
Dive Perception:
The Nashville, Tennessee-based operator grew to become the newest for-profit well being system to report robust inpatient volumes within the first quarter.
Inpatient admissions grew 10% 12 months over 12 months in nearly a 3rd of HCA’s hospital portfolio, and one other quarter of its portfolio elevated by 5%, Hazen mentioned.
Development occurred “even in obstetrics,” mentioned Hazen, “and that is been down a bit of bit. So [it’s] very broad-based from a service line standpoint as effectively.”
CFO Invoice Rutherford mentioned HCA’s inpatient numbers might have gotten a “modest” elevate from the CMS’ two-midnights rule, which was printed in April. The rule mandates inpatient care when a clinician believes a Medicare beneficiary wants hospital care that may seemingly final for 2 midnights.
HCA attributed most of its elevated inpatient volumes to improved capability administration. HCA, like its peer Neighborhood Well being Techniques, has been working to lower size of keep and improve complete obtainable beds to permit for increased inpatient volumes, executives mentioned.
The system bumped up its inpatient mattress capability by 2% as a part of its $1.1 billion in first-quarter capital expenditure spending, in response to executives. HCA additionally elevated its geographic footprint by nearly 5% throughout the first quarter.
Capital spending for the total 12 months is predicted to run between $5.1 billion and $5.3 billion as the corporate chases its objective of holding a 29% market share in healthcare companies by the top of the last decade.
“We’re investing extra within the enterprise than we have ever invested due to the capability that we want and the community growth that we would like,” Hazen instructed traders. “We’re actually enthusiastic about what we’re spending our cash on, and our patterns have confirmed that we are able to generate very optimistic returns.”
Outpatient surgical procedures decreased by roughly 2% in comparison with the primary quarter of 2023.
The executives attributed the dip in outpatient surgical procedures to the lingering influence of the Medicaid redetermination course of, noting a lack of Medicaid outpatient surgical procedure volumes, and “calendar results” of getting fewer working days throughout March to schedule elective surgical procedures. Executives anticipated a few of the surgical procedures misplaced within the first quarter could also be made up later within the 12 months.
On the expense entrance, the operator reported strides to include prices that dogged the corporate throughout 2023, together with labor prices and doctor price bills.
Rutherford mentioned labor prices as a p.c of HCA’s income improved by 100 foundation factors 12 months over 12 months. Contract labor got here down by greater than 20% 12 months over 12 months to complete simply 5.1% of HCA’s labor prices.
Whereas complete working bills remained excessive at $15.1 billion, Rutherford mentioned they have been in step with HCA’s expectations.
The operator reaffirmed its steerage for 2024.
