Oct 20, 2023

Volumes, net income down at for

The four major chains all reported lower net income and lower admissions in the second quarter of this year compared to the year prior.

For-profit hospital operators dealt with another quarter characterized by challenging labor and volume dynamics as a result of the ongoing COVID-19 pandemic.

HCA Healthcare, Tenet Healthcare, Community Health Systems and Universal Health Services all reported lower net income in the second quarter of this year compared to the year prior, and every operator reported lower admissions year over year.

Tenet saw the largest drop with total admissions falling 8% year over year in the second quarter, which was partially attributable to an April cybersecurity breach that impacted operations.

COVID-19 patient volumes fell rapidly from the first to second quarter across the chains’ hospitals as case counts waned, executives said on calls with investors.

But non-COVID-19 care didn't pick up swiftly for some chains like UHS, "resulting in significant shortfalls in revenues and earnings as compared to our original forecasts for the quarter," a release from the operator said.

Executives on HCA's earnings call reported that volumes were returning to pre-pandemic seasonal trends, though they were less optimistic than in previous quarters for a boost in volumes driven by pent-up care delayed by the pandemic.

CHS CEO Tim Hingtgen said in a release that lower-than-anticipated volumes, lower net revenue per adjusted admission and significant contract labor costs impacted earnings in the quarter.

Labor costs were also a key topic and have been among hospitals in recent earnings reports.

HCA, UHS and CHS all saw spending on salaries, wages and benefits increase year over year, though Tenet remained an outlier as those costs fell year over year, similar to the first quarter.

Tenet executives said they’ve kept those costs down by managing labor costs and volumes concurrently, in some cases not fully staffing services if the cost of labor exceeds expected revenues.

CHS executives said they plan to take a similar approach.

"We are consolidating some service locations and intentionally reducing capacity and staffing," Hingtgen said.

"We will do this where it makes sense and in ways that balance the labor supply challenges with our focus on growth and expanding market presence in the long term," he said.

The Nashville-based hospital operator beat Wall Street expectations on revenue, which rose about 3%, but net income slipped nearly 20% compared to the same time last year. Read the full article ➔

However, the chain's inpatient volumes fell year over year. Executives said a cybersecurity incident in April was partially to blame. Read the full article ➔

The health system — which warned investors it was experiencing a significant shortfall in operational results in June — still performed better than analysts expected. Read the full article ➔

The for-profit hospital operator missed Wall Street expectations on revenue and saw admissions decline 3.4% year over year. Read the full article ➔