HCA Healthcare saw profits more than triple in the third quarter as revenue increased 15 percent amid the most severe wave of COVID-19 the health giant has seen since the pandemic began.
The Nashville-based company reported $2.3 billion in net income from July to September this year on $15.3 billion in revenue. Approximately $1 billion of the gains include sales of facilities, including four hospital sales HCA closed in Georgia earlier this month.
Across its entire 183-facility network, HCA execs reporting increased same-facility volumes for every service except surgery, which saw declines to make space for the influx in COVID patients. CEO Sam Hazen said the company saw record-high COVID volumes this quarter, making up nearly 13 percent of all admissions, that helped boost overall revenue. Moving forward into 2022, Hazen said they predict those volumes will dwindle down to approximately 2-to-3 percent of overall admissions.
The surge also put a strain on the network’s workforce, with higher labor costs pressuring HCA’s margins. Hazen said the company has rolled out several key initiatives to populate its clinical teams, including enhanced benefits, a recruitment and retention program and investing in its nursing school, the Galen College of Nursing, which they plan to triple in size in the next few years.
“Obviously in the third quarter we were dealing with a very intense COVID surge with very sick patients and it was putting a significant strain on our communities and our facilities, of course,” Hazen said in a call with investors on Friday morning.
“We did what we had to do as a moral imperative to take care of people, and that required us to support that volume and that acuity with labor and our labor costs did step up in the third quarter," he said. "We used premium pay where we needed to, we used different levels of shift times and bonuses if we needed to. That was not a question to us — we had a lot of people to take care of and we took care of them appropriately, and we still produced a very good outcome for the company, with margins at over 21 percent in the third quarter.”
HCA shares (Ticker: HCA) dropped 6 percent after hours on Thursday — from a near all-time high of $260 — to $245 on Friday morning, but have since recovered to $252 as of Friday afternoon.