The revenue increase of nearly 30% beat analyst expectations. And for the second consecutive quarter, LifePoint raised its earnings projections for the full year. It said it now expects net revenue in the range of $4.45 billion to $4.5 billion and earnings per share of $3.26 to $3.39. That’s an increase from its second-quarter revenue guidance of $4.3 billion to $4.4 billion and earnings per share of $2.99 to $3.19.
Healthcare reform contributed $12 million to its earnings before interest, taxes, depreciation and amortization, in line with expectations, CEO William Carpenter said on an earnings call. And the benefit is likely to grow as more states expand their Medicaid programs. Medicaid expansion in Pennsylvania, which will begin Jan. 1, will benefit LifePoint’s newly acquired Conemaugh Health System, in Johnstown, Carpenter said.
The chain also has stepped up its outreach efforts around the 2015 enrollment period through social media and advertisements.
Self-pay admissions at LifePoint Hospitals declined 40% to represent 4.8% of total admissions in the third quarter, compared with 7.8% during the same period last year. However, LifePoint’s provision for doubtful accounts increased 2% because of an increase in revenue coming from co-pays and deductibles, which are harder to collect, said Leif Murphy, chief financial officer.
Analyst reports expressed optimism about the rural chain’s admissions numbers. Although inpatient volume declined 0.8% year-over-year on a same-hospital basis, equivalent admissions (which are adjusted for outpatient activity) increased 4.5%. Emergency department visits increased 5.1% and revenue per equivalent admission increased 3.2%.
The strong results follow an earnings preview last week from for-profit giant HCA, which is forecasting an 8.2% increase in revenue and a 35.2% increase in income before taxes, also the result of higher volume.
Analysts are expecting another strong quarter for publicly traded hospital groups with patient volume picking up as the Patient Protection and Affordable Care Act brings in more paying customers.
Although there had been some concern over whether the results from the first half of the year would be sustainable, “we think HCA’s positive pre-announcement last week put those fears on ice,” Paula Torch, a senior research analyst at Avondale Partners, wrote in a note to clients.
LifePoint also disclosed that an internal review found two cardiologists who may have performed procedures that weren’t clinically appropriate. The chain self-reported the finding to the U.S. Justice Department and the two physicians are no longer practicing at its hospitals, Carpenter said, adding that it’s too soon to speculate about the finding’s possible financial impact on the chain.
Follow Beth Kutscher on Twitter: @MHbkutscher