Three key points from HCA’s latest earnings call

Nashville, Tennessee-based HCA has released its most recent financial results. During Tuesday’s earnings call, executives highlighted the non-financial sides of the company and answered analysts’ questions.

On Tuesday, Nashville, Tennessee-based HCA released its fourth quarter and full-year financial results.

The for-profit company operates 179 hospitals, 120 freestanding surgery centers and multiple other healthcare facilities.

HCA reported Q4 revenue of $11.6 billion, an increase of 8.6 percent compared to $10.6 billion in Q4 of 2016. Net income for Q4, however, was down: $474 million versus the $920 million in the same quarter of 2016.

For the full year, the company reported similar trends. Revenue hit $43.6 billion compared to $41.5 billion for 2016. Net income was $2.2 billion versus $2.8 billion in 2016.

During the earnings call with analysts, HCA executives highlighted the non-financial sides of the company. Here are a few takeaways.

1. M&A activity will continue

In 2017, HCA made deals to acquire hospitals from Tenet and Community Health Systems. Executives said that trend will be ongoing.

“Yes, with respect to the pipeline … we continue to have a lot of potential transactions that we are looking at,” CFO Bill Rutherford said in the call.

He added that the company plans to assume operation of its latest acquisition, Savannah, Georgia-based Memorial Health, by February 1.

As far as the wider M&A environment, Rutherford said HCA does not see efforts from other organizations as competition.

“With respect to some of the other consolidation activities, we don’t see that having at this point a major impact on our outlook,” he noted. “… [W]hen you think about those consolidations, we are not adding new competitors in any of our markets.”

2. The flu season had an effect

Multiple analysts asked about how the flu has impacted HCA.

“The flu contributed somewhere around 0.5 percent to our admission statistic in the … fourth quarter,” COO Samuel Hazen said. “Most of that did occur in December. And then for our emergency room visits, I think it was about 0.9 percent of our activity was attributable to flu.”

When another analyst asked about the outlook on the flu for Q1, CEO Milton Johnson deflected, saying HCA doesn’t provide guidance in the middle of a quarter.

3. AI is a focus, but the details are slim

Johnson lightly touched on technology initiatives, noting HCA will deploy 100,000 iPhones as part of its nursing technology plan. He also said the company’s clinical data warehouse “positions [it] well for emerging approaches like artificial intelligence.”

When further prompted to discuss the topic during the analyst Q&A, CMO Jon Perlin elaborated, but didn’t go into too much detail.

“We used the artificial intelligence to do everything from changing workflow to making it more efficient, for example, supporting patient navigation, to identifying more efficient ways for care delivery,” Perlin said. “Early identification of sepsis is such an example. So it’s really fuel for supporting every aspect of our operations.”

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