HealthSouth, Birmingham, Ala., said its fourth-quarter net loss narrowed to $71.4 million from $113.9 million in the same period a year ago, mainly because of improvements in its inpatient rehabilitation and surgery segments and a recovery amount from Richard Scrushy, the companys former chief executive officer. John Workman, executive vice president and chief financial officer at HealthSouth, said the $12.8 million payment from Scrushy in the fourth quarter satisfies the bonus repayment he owed the company.
Although total revenue slipped 0.4% to $730.2 million in the fourth quarter, net operating revenue for the companys inpatient rehabilitation segment increased about 2% to $424.6 million and about 3% to $182.4 million for its surgery center segment for the three months ended Dec. 31, 2006.
In a statement, the company said the increased revenue was offset by revenue decreases as a result of continued competition from physician-owned sites and the closure of underperforming facilities that did not qualify as discontinued operations in our outpatient and diagnostic divisions.
For 2006, HealthSouth said total revenue was about $3 billion, down about 3% from $3.1 billion a year ago, while its total loss for the year was $625 million, up 40% compared with $446 million in 2005. Workman said the overall revenue loss was largely due to facility closures and the impact of the 75% rule for inpatient rehabilitation facilities, while the net loss for 2006 included a non-recurring $365.6 million net loss on the early extinguishment of debt. -- by Jessica Zigmond