HCA Healthcare Inc. said it expects the recovery in surgical procedures and emergency room visits to continue throughout the year as staffing levels for the country’s largest hospital chain near return to pre-pandemic levels to add more beds and surgical capacity to add.
The Nashville-based hospital giant, parent company of Parkridge Hospitals in Chattanooga, reported better-than-expected results on Friday and raised its 2023 guidance. The improved results pushed HCA’s stock up 3.85%, or $10.43 per share, trading at an all-time high of $281.21 on the New York Stock Exchange through Friday’s close.
In 2022, a spate of health workforce layoffs due to pandemic fatigue forced hospitals to pay high premiums for new hires or to deploy contract labor. But HCA reported on Friday that its workforce is almost back to pre-pandemic levels, reducing the use of expensive contract workers.
“The company posted solid earnings that reflected strong demand for our services and improvements in our operating costs, particularly for contract labor costs,” Sam Hazen, CEO of HCA, told industry analysts during an earnings call on Friday.
HCA’s adjusted earnings, which exclude losses on facility sales, grew nearly 20% to $4.93 per share. Hospital admissions grew 4.4% and emergency room visits rose 10%, Hazen said.
The results exceeded Wall Street expectations. The median estimate from nine analysts surveyed by Zacks Investment Research was for earnings of $3.99 per share. HCA posted sales of $15.59 billion during that period, also exceeding Wall Street projections. Nine analysts surveyed by Zacks expected $15.29 billion.
“These impressive Q1 trends appear to put HCA on track for a stronger-than-expected year, and management has significantly raised its outlook for 2023,” Morningstar analyst Julie Utterback told Reuters news agency.
In its quarterly reporting, the company said it expects full-year earnings to be $17.25 to $18.55 per share, with revenue between $62.5 billion and $64.5 billion.
Hazen said HCA hospitals are reducing the number of cases where not all operating rooms can open due to staffing restrictions.
“As our employment situation continues to improve, we believe this will allow us to open up more surgical capacity, and we believe the demand in the market is still there,” he said.
Hiring activity was up 19% in the first quarter compared to the fourth quarter of last year, enabling HCA to reduce its most expensive contract labor costs by 21% compared to last year.
“We continue to invest in our people through compensation programs, increased training and innovative models of care,” said Hazen.
Despite the improvement, Hazen said HCA was still experiencing some shortages that prevented the hospitals from using all of their capacity. But the number of cases where HCA was unable to accept patients from other hospitals due to space or staff shortages fell by 25% from the fourth quarter.
HCA’s six Parkridge Hospitals, Rehabilitation Centers and Clinics in the Chattanooga region employ approximately 2,000 people. Last year, Parkridge led CHI Memorial in patient volume in the markets served by Parkridge and became the second-largest healthcare provider in Chattanooga, behind only Erlanger Health System, according to new market President Chris Cosby.
Last year, Parkridge East Hospital completed a $9.8 million expansion of the women’s services department. The birthplace at Parkridge East Hospital now offers 23 postpartum beds, nine labor and delivery rooms, and a 22-bed Level III neonatal intensive care unit.
Parkridge Health System Plans to Build $16 Million Freestanding Emergency Department in Soddy-Daisy and is also considering expanding the main hospital in Glenwood, Cosby said.
– Curated by Dave Flessner
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