HCA Healthcare, one of the nation’s largest hospital operators, increased its full-year revenue and net income guidance this year after reporting improvements on admissions and contract labor costs.
The company now expects revenue for 2023 of $62.5 billion to $64.5 billion and net income of $4.8 billion to $5.2 billion — an increase from its guidance released in its fourth quarter earnings, when it forecast a decline in full-year profit due to inflation and the continued effect of the COVID-19 pandemic.
HCA reported revenue of $15.6 billion in the first quarter, up from $15 billion a year earlier. Net income rose to $1.4 billion in the first quarter, compared to $1.3 billion a year earlier. Analysts from SVB Securities called the results “very strong,” and said it beat Wall Street expectations.
The operator reported strong patient acuity in the first quarter, said CEO Sam Hazen on a Friday earnings call. Non-Covid admissions increased by 12% year-over-year, and represented only 3.1% of same facility admissions, compared to 9.7% a year earlier.
Same facility admissions rose 4.4% year-over-year, with emergency room visits increasing 10.3% in the first quarter.
HCA also reduced its labor expenses, with contract costs down 21% compared to last year and employee turnover rates returning close to pre-pandemic levels, Hazen said.
Contract labor expenses had previously weighed on HCA, with the operator reporting during its first quarter earnings last year that efforts to reduce its labor costs was occurring at slower-than-expected pace. At that time, contract workers were accounting for around 11% of HCA’s nursing hours.
Labor costs have battered health systems as healthcare workers, exhausted by staffing shortages and COVID, quit their jobs or take to the picket line. Hospitals have had to accept high contract labor costs to hold on to their workers, although staffing shortages appear to be easing this year.