Significant losses reported by Columbia/HCA Healthcare Corp., MedPartners and Oxford Health Plans kept the healthcare industry's adjusted fourth-quarter 1997 earnings flat on revenue growth of 15.4%, a recent analysis shows.
In the provider and services sector, Columbia's and Oxford's losses sent adjusted earnings for the fourth quarter ended Dec. 31, 1997, plummeting 82.1% on revenue growth of 20%, according to an analysis by WDI Healthcare Markets Group, a Hilton Head, S.C.-based healthcare advisory and investment banking firm, and KPMG Health Care Transaction Services, Atlanta.
In the physician practice management sector, MedPartners' poor fourth-quarter showing had an equally devastating impact. The Birmingham, Ala.-based PPM company's results caused the sector's adjusted earnings to fall 74% on a 26.2% increase in revenues.
These figures differ from other publicly released data from WDI and KPMG that excluded the results of Columbia, MedPartners and Oxford.
Nashville-based Columbia, the nation's largest healthcare company, reported a net loss of $1.3 billion for the quarter compared with year-ago net income of $414 million. Revenues decreased 9% to $4.4 billion. For the year, the company lost $305 million compared with year-ago net income of $1.5 billion. Revenues rose 0.2% to $18.8 billion.
Oxford, a Norwalk, Conn.-based HMO, posted a fourth-quarter loss of $285 million, more than double what it had forecast. Revenues for the quarter were $1.1 billion.
MedPartners lost $840.8 million in the quarter compared with year-ago net income of $29.9 million. Revenues grew 21% to $1.7 billion.
The home health sector, meanwhile, had a positively glowing quarter, with earnings jumping 125% on a 12.6% increase in revenues. That compares with adjusted third-quarter earnings that grew 27.8% on a 13.7% increase in revenues.
WDI Chief Executive Officer John Cumming said three to five home health companies reported impressive earnings for the quarter and in effect propped up the sector. He added that companies going through restructuring phases, such as Apria Healthcare, will need to start performing better for the sector to do well consistently over time.