LifePoint Hospitals and Universal Health Services continued the trend of investor-owned hospital operators reporting weak volume.
LifePoint, Universal report declines in volume
LifePoint, Brentwood, Tenn., reported a 0.2% decline in admissions and a 0.9% decline in equivalent admissions, comparing the third quarters of 2011 and 2010 on a same-facility basis, according to its earnings release. It also reported declines of 6.7% for inpatient surgeries and 4.8% for outpatient surgeries.
Meanwhile, Universal, King of Prussia, Pa., reported a 2.6% decline in admissions and a 0.3% decline in adjusted admissions for its medical-surgical hospitals, again comparing the quarters on a same-facility basis, according to its earnings release. Its medical-surgical operating margins declined to 12.3% from 13% because of a weaker payer mix.
For LifePoint, the closure of obstetric services at one facility accounted for more than the overall decline in admissions, according to Jeff Sherman, executive vice president and chief financial officer. Regarding surgeries, two unnamed LifePoint facilities faced added competition from newly opened ambulatory surgery centers, and there also were two closures of surgical service lines that accounted for some of the decline, Sherman said. LifePoint recorded net income of $38.8 million, flat with the year-ago quarter. Revenue increased 5.4%, to $877.2 million.
Universal managed to increase its profitability by more than half despite the volume decline and payer mix weakening. Universal recorded net income of $85.1 million, up 52.9% from $55.6 million in 2010’s third quarter. Revenue was $1.85 billion, up 39.7% from a year ago thanks to the acquisition in November 2010 of Psychiatric Solutions.
Steve Filton, senior vice president and chief financial officer, noted that the company was expecting its payer mix to weaken compared with the first half of the year. The reduction of unemployment in Las Vegas, its biggest market, earlier this year has reversed, leading to less commercial business and more Medicaid and self-pay volume there, Filton said.
Overall, the company continues to see declines of 5-6% each quarter in commercial volumes at its medical-surgical hospitals, with more Medicaid volume, Filton said. For the third quarter, the usual trend of slight growth in Medicare also became a slight decline, Filton added.
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