HCA Healthcare saw a $1.2 billion or 11% jump in its third-quarter revenue, the largest spike among publicly traded health systems reported in the most recent quarterly financial filings.
Officials at the Nashville-based health system giant largely credited the latest upticks to volume growth across its book of business, including the strongest same facilities volume the health system has seen over the last 17 quarters, said HCA's CEO Sam Hazen in a call with investors last month. On a same facilities basis, revenue grew by approximately $700 million or 6.3%, he said.
Inpatient admissions grew 3.2% while equivalent admissions grew 4.2%; emergency room visits grew by 4.1%. Inpatient surgeries grew 2.2%, and outpatient surgeries grew by 2.6%.
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"We had broad-based volume growth across most service categories and it was balanced across our markets with growth in 13 or 14 domestic divisions," Hazen said. The health system reported profits of $612 million on revenues of $12.7 billion in the third quarter ending Sept. 30.
While HCA's jumps were the largest, the health system was not alone in citing broad-based jumps in their volume of business for top-line growth.
Both Tenet Healthcare and Universal Health Services reported stronger volumes in the first quarter. Tenet Healthcare's CEO Ronald Rittenmeyer said the health system's hospital volume growth was "broad-based with admissions up 3.6% continuing the trend from the last two quarters." The health system also saw adjusted admissions curve up 2.8% and surgeries creep upward just under 1%. Tenet reported an uptick in revenue to $4.6 billion in the third quarter, up from about $4.5 billion in the same quarter of 2018.
However, the Dallas-based health system reported a loss of $232 million, down from a loss of $9 million the same quarter last year, largely attributing the drop to $4.2 billion in debt refinancing.
Meanwhile, Universal Health Services officials said the uptick in volumes is part of continued growth in market share and overall strength in acute care volumes. "Having said that, volumes increased even more in the third quarter," said Steve Filton, UHS' chief financial officer, during the company's third-quarter call late last month. "You'll recall that earlier in the year we talked about an expectation that could likely happen as we were bringing some new capital projects on in late 2018 and early '19, and I think, we're seeing the impact of that as well."
The King of Prussia, Pennsylvania-based company reported revenue of $2.82 billion in 2019, up from $2.65 billion in the same quarter 2018. The company reported earnings of $97.2 million, down from $171.8 million in the same quarter of 2018.
They credited the drop, in part, to an unrealized loss of $0.11 per diluted share, or $12.5 million pretax, that was recorded during the first nine months of the year from a decrease in the market value of shares of certain marketable securities held for investment. But Filton also acknowledged challenges the increased volumes posed in the third quarter.
"As we tried to satisfy that volume, we found ourselves in a position of having to use more premium pay, that is temporary nurses, registry nurses, overtimes, shift differential, etc., as well as, other non-labor costs, locums physicians, and contract services, etc," he said. "While we had some anticipation that we were going to have to deal with those issues, we acknowledged that we're operating in most of our markets with pretty tight labor conditions. And even where we're anxious to fill vacancies on a permanent basis, we're not always able to do so immediately. So, that I think, was the challenge in the quarter and why we were unable to bring as much of that revenue and volume growth, pull it through to the EBITDA line."
Filton said he expected the health system's operators would be able to adjust more quickly moving forward.
"Our operators, historically, have responded to these sort of challenges, and will, in short order, drive greater efficiencies as they adjust for these higher level of volumes."
