HCA sees decline in first-quarter net income

HCA, Nashville, today reported its final first-quarter results, adding a little more color on a performance it already previewed last month.

The chain also said on an earnings call that it signed an asset purchase agreement Wednesday with Carondelet Health to purchase 239-bed St. Joseph Medical Center and 129-bed St. Mary's Medical Center, Blue Springs, Mo. Ascension Health has been in talks with HCA since last year to sell the subsidiaries.

As expected, HCA, the country's largest system, faced pressure on admissions, in large part because the first quarter of last year had the advantage of an extra business day, Feb. 29.

The chain said that once it adjusted for leap day, same-facility admissions actually increased 1.3% and equivalent admissions increased 0.4%.

Without the adjustment, same-facility admissions increased just 0.1% and equivalent admissions declined 0.7%.

On the call, Chairman and CEO Richard Bracken noted that February was the toughest month across its portfolio but patient volumes started to stabilize in March and began showing improvement in April. The company also put in place a number of measures to control costs, including making sure that its headcount is more in line with the number of patients it treats. Like its peer Health Management Associates, Naples, Fla., HCA found itself on the hook for seasonal staffing contracts without the patient volume it expected.

HCA also said its net income declined to $344 million on $8.44 billion in revenue, compared with $540 million in net income on $8.41 billion in revenue during the first quarter of last year.

While its results came in under expectations, its patient volume was nevertheless the best in its peer group, according to A.J. Rice, an analyst at UBS. Other chains saw declines in same-facility admissions ranging from 2.3% to 5.9% for the period.

Community Health Systems, Franklin, Tenn.; Tenet Healthcare Corp., Dallas, and Vanguard Health Systems, Nashville, also reported results this week.

Follow Beth Kutscher on Twitter: @MHbkutscher