Shares of hospital chain LifePoint Hospitals closed nearly 5% lower after the chain reported earnings results for the first quarter of this year.
The Brentwood, Tenn.-based chain saw a 4.9% increase in net income on revenue that increased 25.5%.
But it also faced challenges. Revenue per equivalent admission declined 0.1%, and was below analyst estimates. LifePoint also said it saw more bad debt related to patients defaulting on their bills under high-deductible health plans even as the number of uninsured patients declined.
The chain reported $38.9 million in net income on nearly $1.3 billion in revenue for the first quarter compared with $37.1 million in net income on $1 billion in revenue during the same period last year.
Same-hospital admissions declined 0.4% but were up 4.3% when adjusted for outpatient activity. Emergency room visits increased 8.9% and outpatient surgeries were up 5.8%, but inpatient surgeries declined 3.2%.
The chain benefited from higher reimbursement rates from commercial payers and healthcare reform, which contributed $13 million to its results, Leif Murphy, the company's chief financial officer, said on an earnings call.
Across its hospitals, LifePoint saw a 29% decrease in self-pay admissions and a 12.9% drop in self-pay emergency department visits. Eight of the company's 20 states have expanded Medicaid. In its Medicaid expansion states, there was a 43% decrease in self-pay ED visits and a 59% drop in self-pay admissions, Murphy said.
However, bad debt has increased due to the proliferation of high-deductible health plans. “Because of the difficulty in collecting co-pays and deductibles … we have recognized increases in our provision for doubtful accounts,” he said.
LifePoint's co-pay and deductible revenue has increased $14.5 million, or 29%, and its provision for doubtful accounts on that revenue increased to 56% in the first quarter, up from 49% in the prior-year period.
LifePoint also has made a number of acquisition and divestiture moves as it seeks to develop regional networks, executives said on the call.
The chain is in the process of buying two hospitals, Clark Memorial Hospital in Jeffersonville, Ind., through a joint venture with Kentucky-based Norton Healthcare, as well as Watertown (Wis.) Regional Medical Center, which would mark its entry into a new state.
It also plans to divest three hospitals in Alabama to Curae Health and this week sold Putnam Community Medical Center in Palatka, Fla., back to HCA after nearly 15 years of ownership.
The deals come after LifePoint, through its joint venture with Duke University Health System, completed its acquisition of Conemaugh Health System in Johnstown, Pa., last September.
“Our experience in Pennsylvania demonstrates how rapidly and effectively we can build these networks,” CEO Bill Carpenter said on the call.