It's the mild flu season. It's the continuing healthcare cost shifting from employers to employees. It's the competition from those pesky surgical hospitals and ambulatory surgery centers that physicians keep building. Or maybe it's some combination of all three.
Whatever it is, the weak volume numbers that five investor-owned chains reported last week contrast sharply with the bold predictions these companies normally make based on the demographics of an aging population.
Nashville-based HCA said competition from ambulatory surgery centers and surgical hospitals played a big role in its lower first-quarter volumes. 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, but Richard Bracken, president and chief operating officer, said about one-third of the shortfall in the company's earnings for the quarter could be attributed to greater competition from surgical facilities with physician investors.
Triad Hospitals said its inpatient admissions and outpatient visits, excluding surgeries, declined in the first quarter. Triad Chairman and CEO James Shelton said the company is seeing some effects of healthcare cost shifting from employers to employees. In a struggling economy with concerns about job security, Shelton said, consumers who must pay all or a greater share of their healthcare costs are going to put off nonurgent procedures. The mild flu season also played a role in the weaker volume, Shelton said.
Unlike HCA, Triad said its surgery volumes were strong-with inpatient procedures up 8.7% and outpatient procedures up 2.5%. The Plano, Texas-based company owns or operates 48 hospitals and 14 surgery centers.
Health Management Associates, Naples, Fla., reported 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. Joseph Vumbacco, the company's president and CEO, said competition from ambulatory surgery centers hadn't affected surgical volume at HMA's 44 hospitals.
Two rural chains also announced weak admissions figures. Community Health Systems, Brentwood, Tenn., said admissions fell 0.4% at the 59 hospitals it has operated for at least 12 months, but said the mild flu season and worse-than-usual winter weather in its markets were to blame. Without those factors, the company said its same-hospital admissions would have grown 2.6%. Moreover, Community reported a 4.9% increase in same-hospital surgeries. Community owns or operates 70 hospitals.
Brentwood-based Province Healthcare Co. said both profits and volumes were lower because of the "unusually large number of physicians" who left its hospitals in 2002. At the 18 hospitals Province has operated for 12 months or more, Province said inpatient admissions decreased 2.5%, although outpatient volume grew. Revenue at the 18 hospitals was down 1.9%. Surgery volume fell 0.4% for the quarter, but that was a marked improvement from the 8.6% drop Province reported for 2002's fourth quarter.