HCA Holdings has warned that first-quarter hospital earnings may be a bit of a downer.
The bellwether system, the nation's largest investor-owned hospital company, Monday disclosed that it expects its first-quarter net income will decline slightly compared to last year's and that earnings before interest, taxes, depreciation and amortization would be flat.
In the preview to its May 2 earnings release, Nashville-based HCA noted that its payer mix deteriorated slightly, with same-hospital Medicare admissions accounting for 48.1% of first-quarter admission compared to 47% in the year-ago period.
Meantime, managed-care and exchange admissions fell to 27.4% from 28.6% in the year-earlier quarter ended March 31. Managed-care companies tend to pay higher reimbursement than Medicare and Medicaid, said Ben Foster, a principal focused on healthcare at KPMG.
EBITDA in the quarter is expected to be $2 billion on revenue of $10.62 billion compared with EBITDA of $2 billion on revenue of $10.26 billion in the year-ago period. Net income is expected to fall to $659 million in the quarter compared with $694 million in the first quarter of 2016.
Same-facility admissions and emergency-room visits across the 169-hospital system were up about 1% in the quarter, HCA said.
HCA's flat EBITDA for the quarter interrupts a big winning streak at the company.
EBITDA in the fourth quarter was $2.21 billion, an increase of 3.6% from a year earlier. And full-year EBITDA was $8.2 billion compared with $7.9 billion in 2015.