Net Income

Carolinas HealthCare loses $112M for first half of '08

Anne Zieger — Wed, 10 Sep 2008 09:42:16 -0400

Citing losses from its investments--an ailment afflicting many of its brethren--Carolinas HealthCare System has reported a loss of more than $111.8 million for the first half of the year. On the other hand the chain, the third-largest public health system in the nation, reported net income from operations of $137.7 million. The loss on the first half of the year came entirely from a $154 million drop in the value of the system's investments, officials said.

For the six months ended June 30, Carolinas HealthCare grew its net operating revenue to almost $1.48 billion, up 33 percent from the $1.11 billion a year earlier. About 22 percent of the gain in net operating revenue came from the health system's merger with NorthEast Medical Center in June 2007.

The system, which operates 22 hospitals, saw operating cash-flow margin improve by 27 percent during the half-year, to $146.9 million, but its operating income fell 39 percent to $27.7 million. That reduction came from increases in interest expenses and depreciation and amortization. Operating income was a bit below the hospital's budget (about $393,000), partly due to a decline in patient volume.

All told, despite some hiccups, Carolinas HealthCare seems to be in decent shape. For example, despite the losses it suffered on investments, it was still solvent enough to spend $170 million on capital projects during the first half of this year, including a facility replacement, operating room projects and a major hospital expansion.

To learn more about these results:
- read this Charlotte Business Journal piece

HMA, Tenet still face financial struggles

Anne Zieger — Wed, 13 Aug 2008 10:41:54 -0400

Health Management Associates has had a rough second quarter, putting in it in the unenviable position of being perhaps the worst-positioned major hospital player, according to some analysts. Both HMA and Tenet had difficult second-quarter results, with Tenet posting its second quarterly loss in a row and HMS reporting a significant drop in second-quarter admissions.

The thing is, Tenet could at least boast improved bad-debt control and a smaller loss that had been cut by half from the previous quarter, as well as admissions gains of at least 2.5 percent in most of its regions. It also saw a growth in outpatient volume, including a 3.4 percent growth in outpatient surgery cases through its freestanding ambulatory surgery centers. (One major downside, however, was that commercially-insured admissions fell by 2.2 percent.)

HMA, meanwhile, missed both top-line and bottom-line estimates for Q2. Revenue was up 3.9 percent to $1.11 billion, falling below its $1.13 billion forecast, and net income grew 4.1 percent to $12.4 million. That doesn't sound terrible, but earnings per share still came in a penny short of Wall Street targets.

Generating more concern from company watchers, HMA's admissions fell 3.8 percent in the second quarter, mostly caused by a drop in insured patients. However, observers say some of these problems may have been generated by problems at HMA's Franklin Regional in North Carolina, which has been threatened with a loss in CMS certification over quality problems.

To learn more about the chains' performance:
- read this piece from TheStreet.com

Related Articles:
HMA adopts tougher collections strategy
HMA sells seven-hospital stake to Novant
Analyst says Tenet poised for major turnaround
Tenet turning around: Admissions grow, losses fall

HCA boosts income, stabilizes bad debt expense

Anne Zieger — Tue, 05 Aug 2008 18:04:57 -0400

Hospital giant HCA, Inc.'s results are in, and particularly given that the U.S. is looking at a recession, they're fairly impressive. HCA said that its second-quarter net income shot up 21.6 percent to $141 million during the quarter ending June 30, 2008, compared with $116 million during the same period last year. HCA execs said that revenues grew 3.7 percent to almost $7 billion, despite drops in surgical volume and flat admissions numbers.

But that's not its only accomplishment, according to one expert observer. Lehman Brothers analyst Adam Feinstein said that one of the most positive aspects of this quarter's report is that HCA has managed to stabilize its bad debt expenses. During the second quarter, the chain set aside $813 million, or 11.7 percent of revenues, to cover doubtful accounts--as compared with $753 million, or 11.2 percent of revenues, during the same quarter last year.

True, charity care and uninsured discounts climbed almost 23 percent during the quarter to $869 million, overshooting the company's reserves. But at least the company didn't hemorrhage money on patient debt this quarter.

To learn more about HCA's performance:
- read this Inside ARM article

Related Articles:
HCA sees debt rising until patients get insured
HCA income up, but bad debt still significant
Bad debt savages HCA, LifePoint profits
Insurer troubles could mean more bad debt for providers