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HCA expects strong 2015 earnings in spite of slowing demand

Nashville-based hospital giant HCA said in a preview of its 2015 financial results that growth in patient demand softened in the final months of the year, raising the prospect that gains from the Affordable Care Act could be tapering.

HCA said it expects growth in the fourth quarter once numbers are final, but at a slower pace than recent quarters.

Same-facility admissions grew an expected 1.6% in the fourth quarter compared with a year ago and 2.9% after adjusting for outpatient activity, HCA said. That's a more moderate pace than in the previous quarter, when the company's performance shook investors. Insurance expansion that began under the Affordable Care Act in 2014 boosted hospital operator earnings, but investors have watched for signs the gains will fade.

In the third quarter, HCA reported same-facility admissions were up 2.9% and increased 3.6% after adjusting for outpatient care. Labor costs also were a drag on HCA's margin in the third quarter. Second-quarter performance was even stronger, with growth of 4.1% for same-hospital admissions and an increase of 4.9% including outpatient activity.

HCA said it would still beat its earnings guidance for 2015. The company expects its earnings before interest, taxes, depreciation and amortization to total $7.9 billion compared with $7.8 billion under prior guidance.


Melanie Evans

Melanie Evans writes about healthcare finance, hospital management and governance issues. She has been part of the Modern Healthcare staff since 2004. Earlier in her career she covered healthcare and not-for-profits as a reporter at the Duluth (Minn.) News Tribune. She received a bachelor's degree in international relations from Boston University and a bachelor's in journalism from the University of Minnesota.

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