HCA, Nashville, said competition from ambulatory surgery centers and surgical hospitals played a big role in the lower first-quarter volumes reported last week when the company reduced earnings expectations. Releasing financial results today, HCA said it earned $469 million, or 90 cents per share, in the quarter ended March 31, a 22% growth over the year-ago quarter's earnings of $385 million, or 74 cents per share. Revenue was up 8.2%, to $5.3 billion. The 2003 first quarter benefited from a $42 million after-tax gain, equal to 8 cents per share, on the sale of two hospitals. Netting out that sale, HCA fell about 6 cents per share short of its original earnings expectations. President and COO Richard Bracken said about one-third of that shortfall could be attributed to greater competition from surgical facilities with physician investors. At hospitals owned or operated in both quarters, equivalent admissions fell 0.9% and inpatient admissions dropped 0.4%. HCA, which owns or operates 192 hospitals, does not report surgical volume separately.
Health Management Associates, Naples, Fla., meanwhile, said its total surgery volume increased just 0.5% for the three months ended March 31, its fiscal 2003 second quarter, compared with a 3.4% increase in 2002's second quarter. HMA reported profits of $78.1 million, or 31 cents, up 13% from the year-ago quarter's earnings of $69.2 million, or 20 cents per share. Revenue was up 11%, to $646.5 million. Responding to a question, President and CEO Joseph Vumbacco said competition from ambulatory surgery centers hadn't affected surgical volume at HMA's 44 hospitals. -- by Vince Galloro