Increased patient volume and lower labor costs helped propel HCA Healthcare to higher profits in the second quarter.
Same-facility admissions at HCA grew 2.2% in the quarter and 3.3% in the first half of 2023 compared with the year-ago periods, the for-profit system reported Thursday.
Rising volumes, bolstered by population growth in markets such as Texas and Florida, were “broad-based” across the company’s divisions and diversified in most service lines, CEO Sam Hazen said on a Thursday earnings call.
“Across most areas of our business, we maintained the operational momentum that we experienced over the past three quarters. We believe this strength should continue into the second half of the year,” Hazen said in prepared remarks. “We remain encouraged by both the backdrop of strong demand that we expect in our markets and our overall competitive positioning within them.”
Inpatient surgery cases increased 1.8% in the second quarter, while outpatient surgery grew 3.3% and emergency department visits rose 3.7%, the company reported.
Nashville, Tennessee-based HCA, which operates 182 hospitals and approximately 2,300 ambulatory sites of care, continues its expansion plans. The system said last quarter it had two hospitals under construction in San Antonio, Texas, and it bought land for new hospitals in Salt Lake City and Las Vegas.
HCA reported on Thursday second-quarter net income of $1.193 billion, or $4.29 per diluted share, compared with $1.155 billion, or $3.90 per share, in the year-ago period. Results included a $32 million loss due to facility sales and a $78 million charge related to debt retirement.
Quarterly revenue rose 7% to $15.86 billion. Total expenses climbed 7.6% to $14.05 billion, including a 7.1% jump for salaries and benefits and a 7.7% increase for supplies.
However, Hazen said HCA reduced contract labor costs by 20% year over year. Chief Financial Officer Bill Rutherford said on the call he expects continued improvement in the labor market throughout the rest of the year.
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HCA again raised its 2023 guidance for earnings per share to a range of $17.70 to $18.90, compared with the previously projected $17.25 to $18.55. Projected revenue increased to a range of $63.25 billion to $64.75 billion, compared with $62.5 billion to $64.5 billion.
Thursday’s earnings report was not enough to dazzle investors. Per-share prices were down roughly 4% for the day as of late Thursday morning. Year-to-date, however, share prices are up more than 10%.
Hazen acknowledged HCA’s recent data breach that may have affected 11 million patients, reiterating the incident is not expected to materially impact operations. HCA said earlier this month data was stolen from an external storage location that contained information for email messages to patients. The data did not include clinical information, credit card or account numbers, passwords, driver’s license numbers or Social Security numbers, HCA said.
HCA has been hit with multiple lawsuits since reporting the data incident.
