Healthcare reform has been a bigger boost to the bottom line at LifePoint Hospitals than it had expected, the Brentwood, Tenn.-based chain reported Friday.
LifePoint, the smallest publicly traded hospital operator, reported a 14.9% increase in net income in the first quarter, reaching $37.1 million compared with $32.3 million during the prior-year period.
Revenue from continuing operations increased to $1 billion, up 8.2% from $931.1 million in the first quarter of 2013.
Seven of LifePoint's 27 states have expanded Medicaid, and 35% of its self-pay volume had been generated in those states in 2013, Leif Murphy, chief financial officer, said during a call with analysts.
About 22% of its self-pay patients during the first quarter had enrolled in Medicaid, and 3% had enrolled in an exchange plan—on the high-end of its previous expectations.
As a result, self-pay patients represented 5.4% of admissions in the first quarter, down from 7% last year.
“So far, and as expected, the impact of healthcare reform has been a net positive for LifePoint,” Chairman and CEO William Carpenter said on the earnings call. “We're excited to our start to 2014 and looking forward to building on our momentum.”
The chain had previously predicted a 4%-5% earnings boost from the Patient Protection and Affordable Care Act when it reported its 2013 results. “Our experience on the front end suggests that we will be at the high end of that estimate,” Murphy said Friday. “The year's off to a good start.”
The additional insurance coverage as well as greater cost controls helped overcome continued declines in volume.
LifePoint reported a 5.3% decrease in same-facility admissions, or 1.9% when admissions were adjusted for outpatient activity.
Like other healthcare companies, LifePoint attributed the volume decline to a milder flu season and the severe winter weather that impacted much of the country.
But the chain also saw a benefit from acquisitions, including through its joint venture with Duke University Health System. When accounting for its four additional hospitals, adjusted admissions increased 4.1%.
In addition, LifePoint expects to add $800 million in new revenue this year from acquisitions that have not yet closed, Carpenter said on the call. The chain in March said it signed a letter of intent to acquire Conemaugh Health System, its first entry into Pennsylvania. It will invest $500 million in the system over 10 years.
Follow Beth Kutscher on Twitter: @MHbkutscher
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