HCA Healthcare weighs in on CMS' price transparency proposal during earnings call

HCA Healthcare
HCA Healthcare released its second-quarter earnings report on Tuesday. (HCA Healthcare)

HCA Healthcare officials said Tuesday that they're still "unpacking" the Trump administration's plan to push hospitals to post rates negotiated with insurers.

Samuel Hazen, CEO of the health system, said on the company's earnings call that HCA has taken significant steps to narrow the "delta" in pricing between different insurers, which would leave it in a competitive place should the rule go through. He said they will be mulling the implementation of the proposal, though, during the comment period, to ensure it's effective for the patient.

"At this point we're focused on the patient and getting the patient the necessary information for them to understand their costs," Hazen said.

William Rutherford, executive vice president chief financial officer, said officials "think the HCA system will stand up well in a price transparency."

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HCA Healthcare earned $783 million in profit in the second quarter of 2019, a decline compared to $820 million in the same quarter in 2018. The health system reported its earnings Tuesday morning at $2.25 per diluted share, and the results did not beat Wall Street's expectations, which projected it to surpass it's Q2 2018 results with $2.49 earnings per share.

Revenues for the quarter totaled $12.6 billion, which did meet the analyst projections. Though year-over-year profits took a dip, revenues were up from $11.5 billion last year.

On HCA's earnings call Tuesday morning, executives said that don't believe that the results suggest a major headwind for the company's overall performance this year.

"We are confident in what we are doing and our outlook for 2019," Samuel Hazen, CEO of the health system, said on the call.

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Hazen said that periodically HCA sees results that do not align with what they anticipate, and that's a trend they noted in the second quarter. Year to date results, however, are in line with what they were hoping for, he said.

Admissions were also up in the second quarter, HCA said. Same facility admissions increased by 2.1% compared to the second quarter of 2018, and same facility equivalent admissions increased by 2.6%. Same facility emergency room visits increased by 3%, according to the report.

Surgical admissions did take a dip in the second quarter, however. Same facility inpatient surgeries declined by 0.1%, while outpatient surgeries increased by 0.6%, HCA reported. Bill x said some of the earnings results could be attributed to this slight dip in surgical volume.

HCA also boosted its 2019 projections following the results, increasing estimated yearly revenue from $50.5 billion to $51.5 billion and earnings per share from $10.25 to $10.65.