(Adds company comments on reform from conference call, updates
By Susan Kelly
April 29 HCA Holdings Inc on Tuesday
reported quarterly earnings just shy of analysts' expectations,
and its top executive said the U.S. hospital chain had not yet
benefited from President Barack Obama's healthcare reform law.
Shares of HCA fell 3.8 percent to $50.61 in midday trading.
"As expected, healthcare reform had minimal impact on the
company's first-quarter results," Chief Executive Officer R.
Milton Johnson said. "However, we remain optimistic regarding
the potential long-term benefits."
Hospital stocks, including HCA, got a boost last week after
smaller U.S. chain LifePoint Hospitals Inc said
participation in private insurance marketplaces and expanded
Medicaid services for the poor were exceeding its
HCA, the largest U.S. for-profit hospital operator, said
first-quarter net income rose to $347 million, or 76 cents a
share, from $344 million, or 74 cents a share, a year earlier.
Excluding one-time costs for legal claims and the early
retirement of debt as well as the impact of facilities sales,
the company earned 84 cents a share. Analysts on average had
expected 85 cents, according to Thomson Reuters I/B/E/S.
Revenue increased 4.6 percent to $8.83 billion.
The company affirmed the 2014 outlook it gave in February
for earnings of $3.45 to $3.75 a share, excluding special items,
on revenue of $35.5 billion to $36.5 billion.
HCA continued its track record of generally stronger patient
volume trends than its peers, said CRT Capital Research analyst
Sheryl Skolnick. The company said it had generated more revenue
from patients even as it admitted fewer people to its
Hospitals are expected to gain a clearer picture of health
reform's impact on patient volumes in the second half of the
HCA is not expected to benefit as much as some of its
competitors from the expansion of Medicaid because it has fewer
hospitals in states that opted to expand their participation in
the federal program for the poor.
HCA hospitals during the quarter admitted 1,700 patients who
were insured through the exchanges, or less than 1 percent of a
base of 440,000 total admissions, company officials said on a
Half of those patients had previously visited HCA hospitals.
Of that group, one-third enrolled in an exchange program after
Patients insured through the exchanges grew as the quarter
progressed, with admissions of those customers doubling in March
"We saw encouraging signs from healthcare reform during the
quarter and found them to be consistent with our expectations,"
Johnson said on the call.
The company said admissions to facilities it had operated
for at least one year declined 0.6 percent in the quarter from a
year earlier, but revenue per equivalent admission rose 3.7
Admissions fell at U.S. hospitals during the economic
downturn as people who lacked health insurance or faced higher
out-of-pocket expenses avoided seeking medical care. The health
reform law and its exchanges are expected to benefit the
industry this year by expanding insurance availability to more
(Reporting by Susan Kelly in Chicago; Editing by Meredith