- Hospital operator HCA Holdings Inc. announced this week a first-quarter earnings increase of 17% thanks to a period of increased hospital admissions, the Wall Street Journal reported.
- The company stated a profit of $694 million, or $1.69 a share, compared to $591 million, or $1.36 a share, at the same tie in fiscal 2015.
- The news comes after concerns in late 2015 over increased labor costs, which went up as a percentage of revenue in Q3 from 45.4% in the preceeding quarter to 46.9%. Also in late 2015, HCA saw its cost of salaries and benefits go up from 45.5% to 45.8% of revenue.
HCA is benefitting from rising admissions of insurered patients as a result of the Affordable Care Act, noting that during the last quarter, equivalent admissions at individual facilities increased 3.1% and revenue per equivalent admission went up 2.2%, though experts suggest that effect may level off with time, the Wall Street Journal reported.
This is not surprising but also echoes what a Tenet executive told Reuters this week, the hospital system is bullish on the exchanges after seeing a surge in hospital business from newly insured patients under the ACA. Yet the ACA activity has been shaking up portion's of major insurer's business with Humana yesterday hinting it may exit the ACA marketplaces.
In the meantime, that volume increase is being seen at the HCA's 168 hospitals and 116 free-standing surgery centers, Modern Healthcare noted, adding ER visits surged 7.6% while outpatient surgeries went up 5.6%, and admissions and revenue per admission went up by about 2%.
HCA COO Sam Hazen told investors during a Tuesday earnings call the ER visit surge is due in part to the company's new free-standing emergency departments, adding it now has
56 of them versus 44 in 2015 and it expects to grow to 70 within another 18 months. The freestanding EDs are “an important part of our network,” Hazen was quoted by Modern Healthcare.
The company also reported part of its increased earnings estimate -- about 20 cents a share -- due to an accounting change that reflects a tax benefit from the first quarter.