HCA, Nashville, tempered its profit growth estimates and said it will look to freestanding outpatient centers for growth as the uninsured and poor economy dampen patient volume. HCA Chairman and CEO Jack Bovender Jr. said on a conference call that the company will increase its investment in freestanding outpatient facilities, including possible acquisitions of diagnostic imaging businesses. In addition, the company plans to organize a separate outpatient services unit to be headed by a senior manager. HCA said the Medicare outlier policy that went into effect Oct. 1 will cost it $144 million in revenue annually and the company's new policy on collecting from self-pay patients will have a similar effect. In response to these trends and soft patient volume, HCA said it will reduce capital expenditures from $2 billion this year to $1.8 billion in 2004 and $1.6 billion in 2005, but no currently approved projects will be canceled.
Instead of percentage per-share earnings growth in the mid-teens, HCA said it now expects growth in "the low double digits." For the third quarter ended Sept. 30, the company's profits rose nearly 50% to $498 million, or 61 cents per share, compared with $335 million, or 38 cents per share, in the year-ago quarter. Revenue was up 11%, to nearly $5.5 billion. For the nine months, HCA earned $1.2 billion, or $1.98 per share, compared with just under $1.1 billion, or $1.78 per share, in the year-ago period. Revenue rose 10.2% to $16.2 billion. HCA owns or operates 190 hospitals, including seven hospitals that are part of 50-50 joint ventures. -- by Vince Galloro