Despite seeing a dropoff in patients due to the Covid-19 pandemic, for-profit hospital chain HCA Healthcare beat earnings expectations, posting a $1.07 billion profit in the second quarter. The Nashville-based for-profit hospital chain’s net income even increased a whopping 37% from the same period in 2019.
This surprising result was largely possible due to relief funds distributed to health systems through the CARES Act. HCA received a total of $822 million in the second quarter. As of June 30, the health system had received $1.4 billion in CARES Act funding, and has since received another $300 million in targeted distributions, CFO Bill Rutherford said in an earnings call.
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The majority of the provider relief fund was distributed based on net patient revenue for hospitals that bill Medicare. That approach drew some criticism, especially as wealthy hospital systems sitting on large cash reserves received a significant portion of the funding.
Looking at HCA’s revenues and patient volumes, the early effects of the pandemic become clearer. The company brought in $11.1 billion in revenue, down from $12.6 billion last year, and saw admissions drop by nearly 13% for the quarter.
The worst of it was in April, when many states required that elective procedures be brought to a halt to conserve protective equipment and hospital beds. Admissions were down 27%, HCA CEO Sam Hazen said in an earnings call. In May, they were down 12%, and in June, they were up 1%.
Since then, patients have begun to trickle in. Initially, they were higher acuity than before the pandemic, Rutherford said.
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“As we saw some of our higher acuity patients in cardiology, neurosciences and orthopedics returned. And the lower acuity patients were maybe the ones that will take a little bit longer to return,” he said.
Hazen said that HCA’s orthopedic and cardiology businesses have recovered quickly. Ambulatory surgery centers were slower to ramp up, because they had been closed completely, compared to procedures in hospitals. Outpatient surgeries at these centers were down 40% for the quarter.
While seeing patients start to come back in will be good news for HCA, the pandemic certainly isn’t over. In states that are currently seeing a surge of Covid-19 cases, particularly in Texas and Florida, HCA had to move to restrict elective surgeries again.
“We do believe that we’re going to have to manage through COVID again. It’s not something that’s going to go away necessarily,” Hazen said. “But our ability to scale up, scale down, scale up, I think has now been proven. We’ve gained greater confidence in our ability to run our business, and at the same time respond to surges.”
Photo credit: Mironov Konstantin, Getty Images
