HCA down­plays thirdquar­ter spikes in la­bor costs, unin­sured

Modern Healthcare - - REGIONAL NEWS - —Beth Kutscher

Nashville-based HCA re­as­sured in­vestors on an earn­ings call last week that its third-quar­ter chal­lenges are one-time is­sues.

HCA re­ported a de­crease in net in­come as its la­bor costs and unin­sured vol­umes grew and it grap­pled with higher drug prices. It also in­curred le­gal costs as­so­ci­ated with a law­suit in Kansas City, Mo.

HCA’s net in­come fell to $449 mil­lion on nearly $9.9 bil­lion in rev­enue in the third quar­ter, ver­sus $518 mil­lion in net in­come on $9.2 bil­lion in rev­enue dur­ing the same pe­riod last year. The com­pany blamed ris­ing con­tract la­bor costs for its higher ex­penses.

HCA re­ported an in­crease in pa­tient vol­ume in all but one of its 14 do­mes­tic di­vi­sions, and its 10th con­sec­u­tive quar­ter of growth in in­pa­tient surg­eries. HCA’s hos­pi­tals also saw a 13.6% in­crease in unin­sured ad­mis­sions. About 75% of those came from Florida and Texas, which have not ex­panded Med­i­caid el­i­gi­bil­ity.

The quar­ter also in­cluded $77 mil­lion in le­gal costs from an on­go­ing dis­pute with the Health Care Foundation of Greater Kansas City, which sued HCA in 2009, al­leg­ing that the firm did not ful­fill its promised char­ity care and cap­i­tal com­mit­ments at the hos­pi­tals it ac­quired from Health Mid­west in 2003.

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