Patients with more intense needs helped boost HCA’s revenues in the last quarter of 2013, contributing to an increase in revenue for the year.
The hospital operator said in an earnings release Tuesday that its net income for the last quarter of 2013 was $424 million, or 92 cents a share, compared with $314 million, or 68 cents a share, in the year-ago fourth quarter. Revenue increased 4.8 percent to $8.84 billion compared to $8.43 billion in the same period in 2012.
The company explained that while it had fewer admissions, the revenue per equivalent admission increased 4.8 percent on a same facility basis on case mix, or acuity, and changes in the payer mix. Surgical volume also rose slightly from the prior year.
Same facility admissions declined 1 percent and emergency room visits fell 2.4 percent from the year-ago period. The 2013 fourth quarter also had fewer pulmonary and short-stay admissions compared to 2012, when HCA said the flu season was more severe.
On an earnings conference call, Milton Johnson, HCA president and CEO, said that the company is well positioned to succeed in the healthcare reform environment. “Operationally we are focused on patient volume growth, quality outcomes, improving patient service and efficiency in service delivery,” he said on the call.
The controversial “two-midnight” rule, which took effect during Q4, did have an impact on admissions metrics, said Bill Rutherford, CFO and executive vice president. “Our decline in Medicare one-day stays accounted for about 50 basis points of our total admissions decline for the quarter,” he said on the call.
[See also: Two-midnight rule a double-edged sword.]
While the regulation will continue to impact admission metrics, he said, the company doesn’t believe it will have material financial impact because it was able to eliminate some operating expenses related to review of short-stay Medicare admissions.
In its forecast for the upcoming year, HCA estimates its earnings per share (diluted) to be between $3.45 to $3.75 based on an expected 1 percent to 2 percent benefit from the Affordable Care Act.