Hos­pi­tals’ strug­gles show in third-quar­ter earn­ings

Modern Healthcare - - THE WEEK AHEAD - —Dave Barkholz

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.

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