HCA's $650 million investment into its east Florida hospitals illustrates how the system is trying to stay ahead of a patient shift to outpatient services with hospitals being reserved for high-acuity care, company executives said during an earnings call Thursday.
With east Florida, including Miami, being its largest market, the company has to have the right medical setting for the widest swatch of patient needs, HCA COO Sam Hazen told analysts Thursday.
To that end, HCA intends to spend $108 million at its 472-bed JFK Medical Center in Palm Beach for a new three-story bed tower, a larger emergency department and renovations to patient rooms. At its Kendall Regional Medical Center in Miami, HCA will spend $90 million for a four-story tower, more ICU and pediatric beds among other upgrades.
The largest single capital project is construction of $219 million hospital on the campus of Nova Southeastern University in Davie, Fla.
During Thursday's call, CEO Milton Johnson said HCA is keeping up with patient demands. In recent quarters, HCA's Miami hospitals have seen daily census rise by 25%, Hazen said.
HCA's three largest markets are Miami, Dallas-Fort Worth and Houston.
In the second quarter, HCA as a whole continued to see increases in admissions, emergency room visits and outpatient visits but at a slightly slower pace than this year's first quarter and last year's fourth quarter, Johnson said. Growth, he said, “was a little more modest.”
Adjusted EBITDA in the quarter rose slightly to $2.1 billion on revenue of $10.3 billion compared with adjusted EBITDA of $2 billion in the second quarter of 2015 on revenue of $9.9 billion.
CFO Bill Rutherford said salaries and expenses rose moderately in the second quarter at 2.4%.
He said same facility admissions for the second quarter of 2016 rose 0.6% vs. the year-ago quarter, while emergency room visits for the second quarter increased 4.1% from the prior year's second quarter.
HCA operates 169 hospitals and 116 free-standing surgery centers.
In light of the moderation in volumes in the second quarter, HCA tamped down its guidance for the year. Its new revenue range is $41 billion to $42 billion compared with $41.5 billion and $42.5 billion at the start of the year. Guidance for adjusted EBITDA is now $8.1 billion and $8.3 billion compared with a range of $8.15 billion and $8.45 billion to start the year.