HCA Holdings saw its revenue grow as 2017 came to a close, hitting the company's revenue expectations for the year partially due to increased admissions, according to Tuesday's earnings release.
HCA took in just under $11.6 billion in revenue in the final quarter of 2017, an 8.6% jump from the same time in 2016, when it took in $10.6 billion. Operating expenses increased 9% year-over-year during that period.
The Nashville-based company raked in $43.6 billion in 2017 revenue, up 5% from $41.5 billion in 2016. HCA's earnings before interest, tax, depreciation and amortization increased 7.1% in the fourth quarter to $2.4 billion—a record quarter, according to the company's CEO—up from $2.2 billion at the same time in 2016.
"We believe our fourth-quarter results position us well as we go into 2018," CEO Milton Johnson told investors.
HCA rounded out 2017 with an adjusted EBITDA of $8.2 billion, exceeding revised expectations the company set in the third quarter of 2017. EBITDA did not change significantly from 2016.
HCA attributed its revenue growth to a 2.3% increase in same-day facility-equivalent admissions compared with the same time in 2016. The company also increased its revenue per admission by 3.5% year-over-year during that time.
In a conference call with investors, HCA President and Chief Operating Officer Sam Hazen explained that the company's growth in emergency room visits in the fourth quarter stemmed from 20% growth in free-standing ER visits. Hospital-based ER visits, meanwhile, rose 1.6% in that time. The company ended the year with 72 free-standing ERs—nine more than in 2016—and it plans to add 12 more in 2018.
HCA also operates 123 urgent-care centers and expects to open another 15 to 20 this year.
The country's largest investor-owned hospital company expects to reap substantial benefit from the recently passed tax overhaul. Going forward, HCA anticipates saving $500 million annually in taxes as a result of its revised tax rate, which will be 25% this year, Johnson said.
HCA's net income in the fourth quarter, $641 million, was far less than the more than $1 billion it saw during the same time in 2016. HCA's net income was also down for the full year in 2017: $2.2 billion, down 24% compared with $2.9 billion in 2016.
Even as health systems like HCA turn their focus toward boosting outpatient revenue, Hazen told investors HCA still spends more on its inpatient facilities. He stressed that it's important to focus on having a fully integrated network that has the downstream capacity to receive patients who enter through the outpatient side and require inpatient care.
HCA also announced Tuesday it plans to increase its three-year capital spending program by 28%, from $8.2 billion to $10.5 billion.
Company shareholders will receive a cash dividend of $0.35 per share.