Uncompensated care and debt refinancing pushed Triad Hospitals, Plano, Texas, into a second-quarter loss, despite rising patient volumes. Triad lost $5.2 million, or 7 cents per share, for the quarter, compared with profits of $38 million, or 51 cents per share, in the year-ago quarter. Revenue was up 21.7% to $1.09 billion, helped by across-the-board increases in same-hospital volumes, including a 3.4% rise in adjusted admissions and a 2.7% rise in inpatient surgeries. Bad-debt expense grew to 10.6% of revenue, compared with 8.2% in the second quarter of 2003 and 10.2% in the first quarter of 2004. Triad said it will implement a new discount program for self-pay patients by the fourth quarter. It expects the policy to lead to a decline in bad-debt expense and an equal decline in net revenue. Triad incurred an after-tax cost of $47.5 million when it refinanced $600 million in senior notes, lowering their interest rate to 7% from 8.75% and securing more favorable covenants. For the six months, Triad's profits were up 8.6% to $92.6 million, or $1.22 per share, on revenue of $2.2 billion. Triad owns or operates 50 hospitals in 15 states. -- by Vince Galloro
Bad debt pains Triad, but refinancing may be tonic
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