Hospitals’ struggles show in third-quarter earnings
Hospitals over the past year have seen rising labor costs, pressures to invest to prepare for value-based reimbursement and a flattening of volumes from the Affordable Care Act exchanges. As thirdquarter earnings season hits full stride this week, early results have been decidedly mixed.
Community Health Systems, for example, offered a preview that shows the Franklin, Tenn.-based chain was hit by the costs of hospital divestitures and lower-than-expected volumes. CHS expects a loss from continuing operations (before income taxes) in the third quarter of $83 million compared with an operating gain of $121 million in the year-earlier quarter.
Like CHS, behavioral giant Acadia Healthcare had its struggles. In the third quarter, Acadia booked write-downs and costs associated with selling 21 of its U.K. facilities to gain clearance on a $2.2 billion acquisition of behavioral health chain Priory Group. Those costs contributed heavily to an expected quarterly loss from continuing operations of $118 million compared with a $29.5 million gain in the year-earlier quarter.
On a brighter note, HCA Holdings reported another solid quarter, posting net income of $618 million, or $1.59 per share, in the third quarter compared with net income of $449 million, or $1.05 per share, in the year-earlier quarter.
HCA, the nation’s largest investorowned hospital company, saw samefacility hospital admissions grow 1%, emergency room visits increase 3% and inpatient surgeries rise 1%.
Acadia, CHS, Tenet Healthcare Corp., Envision Healthcare and AmSurg are all expected to release earnings this week.