Monday, July 26, 2004 | 10:51 a.m.
HCA Inc., owner of three surgery centers and Sunrise, MountainView and Southern Hills hospitals in Las Vegas, reported today a 47 percent increase in its second-quarter profit, beating analysts' expectations by 7 cents per share.
HCA attributed the increase to lower malpractice costs that enabled the company to reduce its liability reserves.
The Nashville, Tenn.-based company's second-quarter net income rose to $352 million, or 72 cents per share, from $240 million, or 47 cents per share, in the year-ago quarter. HCA was able to reduce its liability reserves by $59 million after some states such as Texas adopted tort reform in medical malpractice cases.
Analysts polled by Thomson Financial Network had expected HCA to post average second quarter earnings per share of 65 cents and annual earnings per share of $2.63.
HCA's stock fell 2 percent to $39.90 per share in mid-morning trading.
The company's revenue rose to $5.8 billion in the second quarter from $5.5 billion in the year-ago quarter. The increased revenue came in part from new collection procedures that require insured patients to pay their co-payments and deductibles prior to admission for non-emergency procedures.
Despite the increase in revenue, HCA reported today that it continues to struggle with bad debt from uninsured patients who are unable to pay their bills. HCA increased its allowance for bad debt from unpaid patient bills by 35 percent to $1.4 billion from $1 billion.
For the second quarter, the number of emergency room visits from uninsured patients rose 17 percent, totaling about 20 percent of HCA's total emergency room visits, Chief Executive Jack Bovender said.
The number of uninsured patient admissions increased in the second quarter by 15 percent, representing about 4 percent of the company's total patient admissions, Bovender said.
"Uninsured admissions continued to grow although at a slower rate than we've experienced in the past," Bovender said. "We do believe the processes implemented at our hospitals can and are beginning to mitigate some of our uninsured (patients') bad debts."
HCA said it started collecting up-front deposits for non-emergency treatments and increased patients' payment period to between three and five years from two years to increase the company's ability to collect revenue for its services.
The company said that during the second quarter, it provided $232 million in charity care and discounts to uninsured patients, up from $209 million in the year-ago quarter.
Locally, Sunrise, MountainView and Southern Hills provided a total of $3.4 million in charity care, up nearly 10 percent from the year-ago quarter, said Cheryl Smith, spokeswoman for Sunrise.
HCA isn't the only hospital owner struggling with an increase in uninsured patients with unpaid hospital bills. On Friday, King of Prussia, Pa.-based Universal Health Services Inc. reported it increased its allowance for bad debt by 27 percent to $75.8 million in the second quarter.
The number of patients admitted to HCA's 190 hospitals in the second quarter increased 0.4 percent to 410,500 patients.
The number of patients admitted to Sunrise, MountainView and Southern Hills hospitals increased 5 percent to 13,416 patients.
Southern Hills Hospital's opening March 1 took some patients from its sister hospitals, but the patients remained within the HCA network of hospitals, said Richard Bracken, HCA president and chief operating officer.
archive
