Evidence emerged last week that HCA is not the only hospital operator seeing a decline in acuity among Medicare patients, as Tenet Healthcare Corp. reported an unusually large decline in Medicare acuity for July and August. HCA, too, said Medicare acuity fell for the first two months of the third quarter.
Nashville-based HCA also tried to better explain during a conference call why Medicare acuity fell in the second quarter, causing a $74 million revenue shortfall. About half of the revenue decline came on factors that are likely to recur, mostly related to the lower acuity of its Medicare patients, according to the company. The company's shares have plunged since it reported that shortfall in July, so HCA also announced last week that it will spend $1.5 billion to buyout most of Bank of America's stake in the company. The move will reduce the number of shares outstanding for the company, giving a boost to earnings per share.