There won't be any accounting shenanigans uncovered at HCA, Nashville, company Chairman and CEO Jack Bovender Jr. vowed in a conference call with analysts, because the hospital chain's books have undergone five years of internal and government scrutiny as part of an ongoing Medicare fraud probe. During the call to announce HCA's second-quarter earnings -- nearly 25% above the year-ago quarter's -- Bovender said the company was forced to adopt many of the accounting and governance measures now in the news back in 1997, when the fraud investigation became public. If HCA had counted executive stock options as an expense in 2001, the company's per-share earnings would have been 9 cents lower than the $1.95 reported, Bovender said. A committee is studying the accounting option and is expected to make a recommendation at year-end, he added.
For the second quarter ended June 30, HCA earned $350 million, or 66 cents per share, compared with $281 million, or 52 cents per share, in the year-ago quarter. Revenue rose 9.4% to $4.9 billion. For the six-month period, the company earned $735 million, or $1.40 per share, compared with $624 million, or $1.13 per share, in the same period last year. Revenue grew 8.9% to $9.8 billion. Reimbursement increases fueled the revenue and profit growth. On a same-hospital basis, revenue per equivalent admission was up 8.4% for the quarter and 8.8% for the six months. HCA raised its expected capital expenditures for the year to $1.7 billion, up $100 million from a February estimate, and repeated its estimate of $1.8 billion in 2003. The company will continue to be selective in acquisitions and focus its financial resources on expanding high-acuity services and "hospital entry points," such as emergency departments, Bovender said. -- by Vince Galloro