Two of the nation's largest for-profit hospital chains reported lower quarterly earnings last week, but they and industry analysts claimed that both companies have turned the corner financially. Meanwhile, one new hospital chain didn't need to put a spin on its results.
Columbia/HCA Healthcare Corp. last week reported net income of $138 million for the third quarter ended Sept. 30, down 5.5% from $146 million in the year-ago quarter.
Excluding restructuring and investigation-related costs, the Nashville-based company said net income from operations rose to $155 million, or 27 cents per share, from $131 million, or 20 cents per share, beating analysts' expectations by two cents.
Revenues dropped to $3.9 billion from $4.6 billion, which officials said reflected asset sales of about 100 hospitals and 20 ambulatory surgery centers.
At the end of the third quarter, Columbia had 214 hospitals and 84 ambulatory surgery centers, down from 318 hospitals and 108 ambulatory surgery centers a year ago.
Overall, Senior Vice President Victor Campbell said, the quarter was the first one in two years to reflect operational factors without being overshadowed by external forces, such as the ongoing federal criminal and civil fraud investigations of the company or the internal restructuring that came in the aftermath of the investigations.
Also on the mend is Brentwood, Tenn.-based Quorum Health Group, said John Ransom, director of healthcare research at Raymond James Financial, St. Petersburg, Fla. Numbers for the company's first quarter ended Sept. 30 still reflect operational challenges.
Quorum said net income in the quarter slid 58% to $10.6 million, or 15 cents per share, from $25.5 million, or 34 cents per share, in the year-ago quarter. The figures include a $1.1 million charge related to litigation. Revenues rose 11% to $431 million.
Company officials said in a conference call that they have initiated hospital-by-hospital cost cuts and are beginning to install a centralized managed-care collection system in all Quorum-owned hospitals.
"Beginning with the announcement of the unsealing of the (whistleblower) case last year, we've experienced a series of negative events and operational challenges that frankly have challenged us all," said James Dalton Jr., Quorum's president and chief executive officer.
"I think they've come back from the edge," Ransom said.
Nashville-based LifePoint, a Columbia spinoff, said it earned $1.1 million in net income, or 3 cents per share, for the third quarter ended Sept. 30, compared with a loss of $2.2 million, or 7 cents per share, in the year-ago quarter. Revenues grew less than 1% to $125.4 million.
LifePoint owns 23 hospitals, three of which are for sale.
But more important to its strategy than divestiture is improvement of services and continuing physician recruitment, President and CEO Scott Mercy said during a conference call with analysts.
At the company's 20 core hospitals, which had been suffering from physician drains, LifePoint recruited 133 physicians between Jan. 1, 1998, and Sept. 30.
Brentwood, Tenn.-based Province Healthcare reported net income of $3 million, or 19 cents per share, for the third quarter ended Sept. 30, up 19% from $2.5 million, or 16 cents per share, in the year-quarter. Revenues jumped 27% to $85.7 million.
Province owns 15 rural hospitals and has made five acquisitions this year.