LifePoint Hospitals is forecasting a 4% to 5% earnings boost this year as more patients gain insurance under healthcare reform
The publicly traded Brentwood, Tenn.-based chain reported its projections for 2014 revenue as well as earnings before interest, taxes, depreciation and amortization on an earnings call to discuss fourth-quarter and full-year 2013 results.
Despite weak patient volume and Medicare reimbursement cuts, the chain has a number of reasons to be optimistic this year, said Leif Murphy, executive vice president and chief financial officer. LifePoint is participating in exchange products in every one of its markets, and in 90% of those, its hospitals are included in both the lowest-priced bronze and silver plans. Moreover, it has been successful in negotiating payment rates that are close to commercial rates.
And despite a large concentration of hospitals in the Southeast—where many Republican governors have been resistant to expanding Medicaid
—the company believes the number of holdouts will eventually decrease.The company is projecting
2014 EBITDA of $560 million to $590 million on revenue of $4 billion to $4.1 billion.
Those numbers don't include potential acquisitions—a key part of its strategy—which the company plans to pursue both on its own and through its Duke LifePoint joint venture
, Murphy said.
Like its peer HCA, which reported earnings earlier this month
, LifePoint struggled with falling admissions in the fourth quarter after a less severe flu and respiratory disease season that pushed emergency room visits down 4.4%. The chain reported a 7.6% decline in same-facility admissions, or 3.9% when admissions were adjusted for outpatient activity.
To offset falling volumes, LifePoint has attempted to cut costs related to labor and supply chain and is investing in new service lines that will help improve its case mix, Murphy said.
Income in the fourth quarter declined 1.7% to $35.9 million on revenue of $952.6 million.
Even though LifePoint witnessed a 14.4% decline in one-day stays, Murphy attributed the change to the overall shift to outpatient care, and not to the controversial "two-midnight" rule
, which attempts to standardize whether short stays are reimbursed as inpatient or outpatient. Follow Beth Kutscher on Twitter: @MHbkutscher