HCA Holdings is planning a massive expansion of urgent-care centers and free-standing emergency departments this year as it builds out patient access points in its 14 major markets.
Speaking during a year-end earnings call with analysts Tuesday, HCA President Sam Hazen said the hospital company will use a portion of its record $2.9 billion capital budget in 2017 to increase urgent-care locations from 72 today to 120 by year-end.
Nashville-based HCA expects to grow its free-standing emergency departments nationally to 80 “by the first part of 2018,” up 31% from 61 locations today, Hazen said. HCA is the nation's largest investor-owned hospital company with 169 hospitals and 2016 revenue of $41.5 billion.
Hazen said competitors in its 14 markets are showing signs of slowing construction of free-standing emergency rooms. HCA, however, continues to build to relieve some of the volume pressures that HCA's hospital-based emergency departments are experiencing.
“Our capital spending is a direct reflection of the opportunities we see,” Hazen said. “If we don't invest and expand to add more capacity, then our growth will be limited by lack of capacity.”
HCA also announced Tuesday that it has paid $178 million to settle a 7-year-old lawsuit brought by the Health Care Foundation of Greater Kansas City for allegedly not spending all of a promised $450 million on capital expenditures for Kansas City hospitals it owns.
HCA had previously reserved $460 million for the settlement. So it actually reduced its accrual by $290 million and recorded a one-time legal claims benefit of $246 million for 2016.
During the earnings call, HCA CEO Milton Johnson said the chain has spent about $1 billion for healthcare facilities in Kansas City over that time and was settling to put an end to the litigation.
In its fourth quarter ended Dec. 31, HCA posted net income of $1.1 billion on revenue of $11.5 billion compared with net income of $738 million on revenue of $11.3 billion in the year-earlier quarter.
Same-facility admissions increased 1.5% in the quarter over the prior-year period, HCA reported.
The $2.9 billion projected capital expenditure in 2017 is a slight uptick from the $2.76 billion spent in 2016.
Johnson said that level of capital spending could be adjusted if market conditions change. But he said he didn't see repeal of the Affordable Care Act coupled with some kind of replacement program having a material effect on HCA this year. The company derives about 2.7% of admissions from the ACA health exchanges.