Editor's note: This story was updated with executive comments from Thursday morning's earnings call.
Across-the-board improvements to HCA Healthcare's operations yielded a $1.19 billion profit ($4.29 per diluted share) for the second quarter of 2023, up from the $1.16 billion gain ($4.90 per diluted share) it saw the same time last year, the Nashville-based hospital chain reported Thursday.
The massive for-profit’s revenues grew 7% year-over-year to $15.86 billion. Executives added during an earnings call that the growth was broadly spread across most of the company's service lines and operating divisions and that this quarter was missing the roughly $40 million in COVID support payments during Q2 2022.
Same-facility admissions were up 2.2% while same-facility equivalent admissions rose 3.7% over Q2 2022, HCA said. Same-facility revenue per equivalent admission increased 2.4% during the same periods.
Additionally, same-facility emergency room visits rose 3.7%, same-facility inpatient surgeries increased 1.8% and same-facility outpatient surgeries rose 3.3%. Executives said growth was also strong across various outpatient categories, including a 5% rise in outpatient cardiology procedures.
CEO Sam Hazen made a point to stress that the upward trajectory was a near company-wide trend.
Thirteen of HCA's 16 divisions had growth across admissions and adjusted admission, with "isolated" divisions in Florida and the Midwest being exceptions, he said. Seventy-two percent of HCA's hospitals had 2% or greater admission growth for the year, he continued, and nearly half of the hospitals have inpatient surgery growth exceeding 2%.
"So, really consistent portfolio performance that speaks to the strength of our market—the competitive positioning of our facilities, and then the ongoing network development and physician development that we have as part of our core strategy," he told investors Thursday morning.
Expenses, meanwhile, rose 7.6% to $14.05 billion for the quarter. Alongside $6.79 billion in salaries and benefits costs, those expenses included $32 million in losses on sales of facilities and $78 million of losses tied to retirement of debt.
Here the executives highlighted "improvements across virtually all key labor metrics" with a 9% increase in nurse hiring compared to 2022, declining nurse turnover, a 20% reduction in contract labor costs compared to Q2 2022 and expectations that these metrics would continue to improve through the rest of the year.
As a result of staffing and other investments, Hazen said that HCA was able to increase available bed capacity and trim down the number of patients being turned away from other hospitals, which represented 0.8% of total admissions compared to the prior quarter's 1.5%.
The performance yielded a quarterly cash dividend of $0.60 per share of common stock, as well as an upward adjustment to its guidance range for 2023.
The prior range of $62.5 billion to $64.5 billion was increased to $63.25 billion to $64.75 billion. Net income attributable to the company is now expected to land between $4.9 billion and $5.26 billion, while earnings per (diluted) share are expected to land between $17.70 and $18.90 per diluted share. Expected capital expenditures for the year were also bumped up slightly, from $4.6 billion to $4.7 billion.
Hazen said the company expects volumes to stay strong through the second half while payer mix continues to shift toward more commercial admissions, due to the strengthening economies of the company's core markets. Ongoing workforce development and retention efforts are also expected to continue into the back half of 2023, he said, which would further strengthen HCA's margins.
"We will wait to see how the latter half of the year plays out, but all in all, I think tremendous results," Hazen said. "We're very competitive, I believe, with our compensation and benefit programs, and ... we've been able to navigate through these difficult periods and maintain margins."
As of midday Thursday, HCA's stock was trading about 3.5% below Wednesday's closing price.
Hazen briefly touched on the 11-million patient data breach his company reported earlier this month. Though a forensic investigation is still ongoing, the executive said that the compromised list of patient data did not contain clinical information, payment information or other highly sensitive information. HCA also doesn't expect the breach or resulting class action lawsuits to have a material impact on its business, he said.
"HCA Healthcare believes the privacy of its patients is a vital part of its mission and remains committed to maintaining the security [of] their personal information," he said.
HCA Healthcare operates 182 hospitals and about 2,300 other ambulatory sites of care. The company reported $60.2 billion in total revenue across 2022.