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October 28, 2014 01:00 AM

Expansion costs hurt HealthSouth's bottom line

Beth Kutscher
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    HealthSouth Corp., the Birmingham, Ala.-based operator of inpatient rehabilitation hospitals, reported a 7.6% decrease in net income in the third quarter as it incurred startup costs associated with new facilities.

    Third-quarter net income decreased to $48.5 million compared with $52.5 million in the same period of 2013. Revenue, however, increased to $596.9 million, up 5.8% over the year-ago period's $564 million. The chain saw 3.8% more discharges in the third quarter than it did during the prior-year period.

    HealthSouth spent $1.6 million in preopening startup costs for three new hospitals: a 50-bed facility in Altamonte Springs, Fla.; a 50-bed hospital in Newnan, Ga.; and a 34-bed facility in Middletown, Del. All three are expected to open in the fourth quarter, CEO Jay Grinney said during an earnings call.

    Each facility also must treat 30 patients, without reimbursement, before it can receive Medicare certification.

    In addition, the company expects its 26-bed Quillen Rehabilitation Hospital in Johnson City, Tenn., to be operational by year-end, Grinney said. The hospital is part of a joint venture with Mountain States Health Alliance.

    HealthSouth also is planning two more hospitals for 2015: a 50-bed facility in Savannah, Ga., in partnership with Memorial University Medical Center, and a 40-bed facility in Franklin, Tenn., for which it recently received approval from the state Court of Appeals.

    HealthSouth revised its earnings projections for the full year, lowering its earnings per share forecast range to $2.24 to $2.27, down from earlier guidance of $2.25 to $2.31.

    The new results take into account a $13 million loss from early repayment of its debt. HealthSouth completed a debt refinancing in September and October.

    Follow Beth Kutscher on Twitter: @MHbkutscher

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    • News
      • Current News
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      • Transformation
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      • ESG
      • People
      • Regional News
        • Midwest
        • Northeast
        • South
        • West
      • Digital Edition (Web Version)
    • Opinion
      • Bold Moves
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      • Vital Signs Blog
      • From the Editor
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      • Awards
        • Nominate/Eligibility
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        • 50 Most Influential Clinical Executives
        • Best Places to Work in Healthcare
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        • Health Care Hall of Fame
        • Healthcare Marketing Impact Awards
        • Top 25 Emerging Leaders
        • Top Innovators
        • Diversity in Healthcare
          • - Luminaries
          • - Top 25 Diversity Leaders
          • - Leaders to Watch
        • Women in Healthcare
          • - Luminaries
          • - Top 25 Women Leaders
          • - Women to Watch
      • Conferences
        • Digital Health Transformation Summit
        • ESG: The Implementation Imperative Summit
        • Leadership Symposium
        • Social Determinants of Health Symposium
        • Women Leaders in Healthcare Conference
      • Galas
        • Best Places to Work Awards Gala
        • Health Care Hall of Fame Gala
        • Top 25 Diversity Leaders Gala
        • Top 25 Women Leaders Gala
      • Virtual Briefings
        • - Hospital of the Future
        • - Value Based Care
        • - Hospital at Home
        • - Workplace of the Future
        • - Digital Health
        • - Future of Staffing
        • - Hospital of the Future (Fall)
      • Webinars
    • Multimedia
      • Podcast - Beyond the Byline
      • Sponsored Podcast - Healthcare Insider
      • Video Series - The Check Up
      • Sponsored Video Series - One on One
    • Data Center
      • Data Center Home
      • Hospital Financials
      • Staffing & Compensation
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