HCA Healthcare stock fell 10% by late Friday morning as the hospital operator reported lower-than expected revenue as it missed out on COVID-19 admissions compared to a spike during the delta variant wave in 2021.
“The third quarter of 2021 was the most intense surge we saw with the delta variant,” HCA CEO Sam Hazen said on a Friday morning earnings call. “It significantly impacted our business, making it difficult to compare.”
COVID-19 admissions fell almost 60% in Q3 of 2022 compared to Q3 of 2021, when COVID-19 admissions totaled 12.7% of the operator’s total admissions, HCA CFO William Rutherford said.
The decline in admissions led to lower-than expected revenue of $14.97 billion compared to $15.28 billion year over year, narrowly missing Wall Street expectations by 0.2%, according to SVB Securities. HCA’s net income was $1.1 billion for the third quarter, compared to $2.3 billion in the prior-year period.
But while same-facility, emergency room and same-facility revenue per equivalent admission fell year over year, the operator saw a 5.6% increase in same-facility inpatient surgeries and a 2% increase in same-facility outpatient surgeries.
HCA’s earnings were “generally” in-line with its internal expectations, Hazen said, but added that its results reflect capacity constraints exacerbated by the ongoing healthcare labor shortage.
Last quarter, the operator announced the opening of its Galen College of Nursing campus in Asheville, North Carolina, in a bid to improve staff recruitment. The CEO said that the operator has seen more new hires and reduced contract labor expenses due to the college, with the company’s salary and benefits expenses falling 0.3% in its percentage of revenue compared to the prior-year period.
HCA estimates the impact of Hurricane Ian, which hit HCA facilities on the west coast of Florida on Sept. 28, to be about $35 million in Q3. News stations at the time reported that the storm had flooded the emergency room and tore off the fourth-floor roof of the intensive care unit at HCA’s Florida Fawcett Hospital in Port Charlotte.
Inflation continues to be a concern for the hospital operator, with Hazen calling it a “pressure point” for the system and adding that inflation continues to contribute to uncertainty next year.