HCA Healthcare posted its financial performance for the first quarter of 2022, and there was some good news. The health system saw higher year-over-year revenues, increasing nearly 7% to $14.945 billion, compared to $13.977 billion in the first quarter of 2021. Same-facility revenue per equivalent admission increased 2.7% over the first quarter of 2021, while same-facility inpatient revenues grew 5.4%, and same-facility outpatient revenues rose 10.6%.
Despite these gains, HCA’s year-over-year net income dipped, dropping from the first quarter of 2021’s $1.4 billion to nearly $1.3 billion in the first quarter of 2022. Adjusted EBITDA for the quarter also dipped from last year’s nearly $3.1 billion to just over $2.9 billion.
A key contributor for this decrease cited by HCA’s CEO Sam Hazen and CFO William Rutherford was HCA’s approximately 49,000 quarterly COVID-19 inpatients. These low-acuity cases represented about 10% of the company’s total admissions and generally drove down margins.
The tight labor market, exacerbated by the omicron surge during the first quarter, also had a large impact on earnings. HCA Healthcare executives reported that they saw “modest improvements” in contract labor measures compared to Q4:21, but that prices for these temporary workers, and subsequently the full-time labor market, are normalizing slower than expected. The challenges in the labor market even constrained HCA’s capacity and prevented the health system from delivering hospital services to some patients. By the end of the quarter, HCA was able to overcome some of these capacity constraints and, for the most part, return to normal operations and move more patients to the proper settings in the health network.
Sam Hazen and William Rutherford mentioned that HCA has retention, recruitment, capacity management and care model initiatives now underway to help mitigate both higher labor costs and increased interruptions to care delivery.
The impact of labor costs, first-quarter COVID-19 cases and inflation led HCA to reevaluate its performance for the remainder of the year. During a Friday morning earnings call, the healthcare services provider announced that it would lower its guidance for the remainder of 2022, citing challenges in the labor market which constrained its capacity and prevented it from delivering hospital services to certain patients Full-year revenues guidance now sits in the range of $59.5 billion to $61.5 billion, a $500 million reduction over prior estimates of $60.0 billion to $62.0 billion released in January.
HCA Healthcare is a for-profit operator of health care facilities that was founded in 1968 and based in Nashville, Tennessee. HCA Healthcare comprises 185 hospitals and more than 2,000 sites of care in 20 states and the United Kingdom.
