HCA, Nashville, said it expects to see bad-debt expense continue to rise at 18% to 20% per year unless federal policymakers expand coverage of uninsured patients. The company said its bad-debt expense for the fourth quarter of 2007 was 13.2% of revenue, or 21% higher than the 10.9% figure the company reported for the fourth quarter of 2006. Three factors combined to fuel the increase, said Milton Johnson, executive vice president and chief financial officer of HCA: lower collection rates on patient accounts; growth in uninsured patients; and the annual increases in HCAs gross charges, or list prices. For 2007, HCAs bad-debt expense was 11.7% of revenue, up from 10.4% in 2006.
The companys profits for the fourth quarter were $278 million, more than double the profits of $122 million in 2006s fourth quarter. The fourth quarter of 2006, however, included $433 million in transaction costs related to the companys $33 billion leveraged buyout. Revenue for the quarter increased 6.1% to $6.88 billion. For the year, profits declined by 15.9% to $874 million from $1.04 billion in 2006. Revenue increased 5.4% to $26.86 billion.
HCA received $661 million for the sales of three hospitals in 2007, and used the proceeds to pay down debt, according to the company. Jack Bovender Jr., HCAs chairman and chief executive officer, said it would not be surprising if HCA made more facility sales in 2008. As of Dec. 31, 2007, HCA owns or operates 169 hospitals and 108 freestanding surgery centers. -- by Vince Galloro
What do you think? Post a comment on this article and share your opinion with other readers. Submit your letter to Modern Healthcare Online at [email protected]. Please be sure to include your hometown and state, along with your organization and title.