After seeing only a modest impact from healthcare reform in the first quarter, HCA said the law's effect on second-quarter earnings has exceeded its expectations. Its revised financial projections assume a 2% to 3% impact on earnings before interest, taxes, depreciation and amortization, an increase from 1% to 2%.
HCA also reported a 1.2% increase in same-facility admissions and a 2.2% increase in same-facility equivalent admissions. Its revenue per admission increase 5.4% on higher acuity patients.
The magnitude of the increase was even more impressive given that HCA had a tough comp against last year's strong second quarter, wrote A.J. Rice, an analyst at UBS, in a research note.
HCA shares were trading up nearly 10% after the announcement, which also boosted shares of peers Community Health Systems, Tenet Healthcare Corp., Universal Health Services and LifePoint Hospitals.
“If HCA's performance is any indication, 2Q14 earnings season should be strong for acute-care hospital investors,” wrote Frank Morgan, an analyst at RBC Capital Partners.
Other one-time items included a $142 million adjustment to Medicaid revenues after it underestimated its reimbursement from the Texas Medicaid Waiver program for providing indigent care.
It also booked a loss of $226 million from retiring its debt, and a gain of $11 million from selling facilities.
Follow Beth Kutscher on Twitter: @MHbkutscher
