Unlike many of their not-for-profit counterparts that operate acute-care hospitals, three investor-owned chains were very profitable for the first quarter of this year.
In spite of their ongoing legal problems, two of the country's largest for-profit hospital chains reported solid financial quarters last week.
A smaller chain, Health Management Associates, joined the party in reporting favorable results last week.
Columbia/HCA Healthcare Corp., the nation's largest chain, earned $322 million for its first quarter ended March 31, up 63% from a $197 million profit in the same year-ago quarter. Revenues dipped to $4.7 billion from $4.9 billion.
Almost half the quarter's profit-$152 million-came from the sale of seven hospitals and other assets.
Columbia executives painted a cautious picture of a company on the rebound from a major restructuring prompted by legal problems.
Columbia is the defendant in at least seven whistleblower fraud lawsuits in which the federal government has joined as a plaintiff (April 19, p. 12). The Nashville-based company also is the subject of an ongoing criminal fraud investigation, which to date has led to the indictment of four company executives.
Victor Campbell, Columbia's senior vice president, said the company is "making progress" in settlement talks with the government in the whistleblower cases, but he declined to speculate on when an agreement may be reached.
In addition to selling dozens of hospitals and a host of non-acute-care business lines, Columbia is on the verge of spinning off two divisions and nearly 60 hospitals into two separate public companies, LifePoint Hospitals and Triad Hospitals, on May 7.
Quorum Health Group executives, meanwhile, described their profitable quarter as representative of the Brentwood, Tenn.-based company. "Indeed, the third quarter showed improvement in both the operations of recently acquired hospitals and of hospitals in established markets," said James Dalton Jr., president and chief executive officer of Quorum.
For the third quarter ended March 31, Quorum earned $18.4 million, up 35% from a $13.6 million profit in the same year-ago quarter. Revenues rose 13% to $448 million. Quorum owns 22 hospitals and manages about 238 others in 44 states.
Quorum also reported $2.7 million in litigation-related costs for the quarter. It's the defendant in at least one whistleblower fraud lawsuit that the government has joined as a plaintiff.
Last week, a federal judge agreed to Quorum's request to indefinitely postpone subpoenas issued in late March to 200 hospitals owned or managed by Quorum.
The Justice Department issued the subpoenas to gather information as part of the whistleblower case, which alleges that Quorum systematically defrauded Medicare by inflating claims totaling more than $70 million and documenting the inflation in reserve cost reports.
Finally, Naples, Fla.-based HMA reported an 18% rise in profits during its second quarter ended March 31. The company had net income of
$47.7 million, up from $40.5 million in the prior-year quarter. Revenues rose 12% to $339.7 million.
The company has two deals pending-the purchases of Lower Florida Keys Health System in Key West, Fla., and Community Hospital of Lancaster (Pa.). Both are expected to close during the current quarter. Once completed, HMA will operate 36 facilities in 12 states.