HCA, Nashville, recorded a 15% increase in profits for the second quarter despite a mixed report on volume, thanks to somewhat higher reimbursement, a one-time tax gain and continued reduction in the company's reserve for malpractice insurance. The company also announced a deal that would complete its 10-hospital divestiture program, saying it had agreed to sell five hospitals for $260 million to start-up Capella Healthcare, Brentwood, Tenn. The company previously announced a deal to sell the five other hospitals to LifePoint for $285 million.
HCA said it earned $405 million, or 90 cents per share, in the quarter, compared with $352 million, or 72 cents per share, in the year-ago quarter. Revenue rose 4% to about $6.1 billion. Same-facility admissions were down 0.3%, but same-facility equivalent admissions were up 1.2%. For the six months, the company earned $819 million, or $1.84 per share, up 17.5% from $697 million, or $1.41 per share, in the year-ago period. Revenue increased 4% to about $12.6 billion. Admissions and equivalent admissions rose 0.3% and 1.7%, respectively. As previously reported, a favorable tax settlement added $48 million, or 11 cents per share, to HCA's second-quarter profits. The company said it was able to reduce its malpractice reserves by $36 million pre-tax in the quarter. HCA operates 190 hospitals and 92 ambulatory surgery centers. -- by Vince Galloro