On an earnings call this morning, HCA officials said the company's second-quarter performance matched the system's performance during the first quarter.
“We are pleased with the second-quarter results, produced through volume growth, increasing acuity and favorable expense management by our operating teams,” HCA Chairman and CEO Richard Bracken said in a news release. “Our operating teams are doing an excellent job providing cost-efficient and quality care.”
Bracken made note on an earnings call of the news announced earlier this week that he was stepping down and that R. Milton Johnson, HCA's president and CFO, would take over at the end of the year.
Increased patient volumes and better revenue per equivalent admission led to that revenue growth, HCA officials said. Same-facility equivalent admissions grew by 1.1% this quarter compared with the second quarter of 2012, and same-facility admissions increased 1.3%. Same-facility revenue per equivalent admission rose by 2.9%, and cash flow from operations totaled $814 million.
HCA officials also said new hospital construction in Orlando, Fla., Salt Lake City, Houston and Fort Worth, Texas, could benefit the company. The hospitals will be smaller than a typical U.S. facility, with an emphasis on outpatient care. “We believe that this approach will be a capital-efficient way to stay aligned with population growth centers and provide access to our more comprehensive networks,” Bracken said on the call.
Officials also mentioned that HCA added about 700 beds and $225 million in annualized revenue after buying three Tampa, Fla.-area hospitals from Iasis Healthcare, a for-profit chain based in Franklin, Tenn.
HCA credited increased patient acuity for the company's favorable financial performance, but there was some concern about decreased emergency room visits, as only six out 14 HCA divisions reported increases.
The majority of HCA facilities are in urban areas, which gives them an advantage over other for-profit chains like Community Health Systems, Health Management Associates and LifePoint Hospitals, said Dean Diaz, senior VP at Moody's Investors Service.
For the most part, HCA's performance was unusual for the for-profit sector, he said, though he noted Universal Health Services, King of Prussia, Pa., also had a good second quarter. Last month, Universal reported $1.8 billion in net revenue for the second quarter, a 6.5% increase from the second quarter of 2012.
Other than geographic location, Diaz said it's difficult to pinpoint why HCA has enjoyed positive results compared with other hospital companies.
HCA stock is down 21 cents at $38.79 per share since trading started this morning. Shares have risen nearly 25% since trading Jan. 1, when the stock cost $31.30 per share.
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