LV hospital operator HCA posts higher profits

Tuesday, Oct. 24, 2000 | 11:12 a.m.

SUN STAFF AND WIRE SERVICES

NASHVILLE, Tenn. -- An increase in patient volume at the nation's largest hospital chain, HCA-the Healthcare Co., boosted its third-quarter net profits by 26 percent.

HCA operates a big medical network in Las Vegas including Sunrise and MountainView hospitals.

Nashville-based HCA earned $174 million, or 31 cents a share, compared with $138 million, or 24 cents a share, a year earlier, the company said Monday.

Excluding one-time charges related to sales of facilities, investigation and restructuring costs and impairment of assets, the company beat by two cents the 31 cents-per-share third-quarter earnings forecast by analysts surveyed by First Call/Thomson Financial.

The company has sold or spun off dozens of its underperforming facilities and earlier this summer announced a partial settlement with the federal government of its long-running Medicare fraud investigation. In May, the hospital chain agreed to pay $745 million to resolve allegations of overbilling Medicare and other federal insurance programs.

Without the onetime charges, the company reported earnings of $186 million, or 33 cents per share, compared to $155 million, or 27 cents per share, for the same period last year.

Revenues were $4.1 billion, up 5 percent from $3.9 billion for the third quarter of 1999. For the first nine months of 2000, HCA revenues totaled $12.5 billion, compared to $12.7 billion for the same period last year.

"The $4 billion of capital investments we have made in our hospitals during the past three years are evidenced in this year's results and should allow us to continue to meet the growing needs of the communities we serve," said Thomas F. Frist, Jr., chairman and chief executive of HCA.

Admissions at the company's hospitals rose 4.3 percent, or by 381,200 patients, for the quarter, with an average stay of about 5 days. The hospital has admitted 1.1 million patients so far this year.

HCA currently operates 198 hospitals and 79 outpatient surgery centers, compared with 214 hospitals and 84 outpatient surgery centers for the same period a year ago.

HCA told analysts in a conference call it has invested in emergency rooms in Las Vegas and other cities because emergency cases generate about 40 percent of the company's inpatient business.

HCA also has lured patients from competing non-profit hospitals by adding profitable medical services such as cardiology, oncology and orthopedics, said UBS Warburg analyst Matthew Ripperger.

HCA is using its market clout in Las Vegas, Denver, Dallas and Austin, Texas, to negotiate contracts that charge insurers higher prices, Ripperger said.