HCA 3Q results show impact of recent hurricanes
- Hurricanes Harvey and Irma took a toll on HCA Healthcare’s 2017 third quarter results, fueling additional expenses and revenue losses, according to a preliminary earning report.
- Revenues for the quarter grew 4.1% to $10.7 billion, from $10.3 billion in the same period a year ago. Net income dropped 31% to $426 million, down from $618 million last year.
- The 170-hospital Nashville-based chain also took a $50 million hit related to the Texas Medicaid Waiver program. The loss reflects final settlement amounts for the fiscal year ended Sept. 30, 2017, HCA said.
Not all the news was bad. HCA saw same facility admissions grow 0.6% during the quarter. Same facility emergency room visits rose 0.3% from the 2016 third quarter. But the company said growth in both inpatient admissions and ER visits was depressed by the hurricanes.
This is turning out to be a rough year for HCA. The health system missed second-quarter estimates and scaled back its full-year earnings forecast in late July, causing shares to slip 4% at the time. Revenues for the second quarter were $10.7 billion, up 4%, while adjusted revenue totaled $2 billion. HCA blamed the poor results on lower-than-anticipated patient volumes and higher expenses.
Hospitals and health systems are still assessing the full impact of Hurricanes Harvey and Irma on their financial wellbeing. Last month, Kindred Healthcare said it expects to take a $20 million hit on pretax earnings in the third quarter. The company operates 18 long-term acute-care hospitals, two inpatient rehabilitation hospitals and scores of outpatient facilities in the areas of Texas and Florida ravaged by the storms.
Following Hurricane Harvey, Moody’s Investors Service warned that nonprofit hospital credit could be impacted for years. Just how bad it is will depend on the scale of property damage, insurance recovery and access to federal disaster relief funds, the firm said. Analysts also predicted a near-term drag on patient volumes as people delay medical procedures to focus on rebuilding homes and businesses.
The back-to-back hurricanes took a toll on HCA hospitals in Houston and Corpus Christi, Texas, as well as facilities in Florida, Georgia and South Carolina.
- Business Wire HCA Previews 2017 Third Quarter Results
- Becker's Hospital CFO Report HCA reports $140M hit from hurricanes, expects 31% drop in Q3 profit