COVID-19 cases could be 5% of 2021 admissions - HCA

• HCA Healthcare on Monday reported profit of $668 million in the third quarter, up 9% from the same time last year. Results came as the hospital giant returned hundreds of millions in government grants early and it faces COVID-19 surges in key markets. The Nashville-based system notched revenue of $13.3 billion, up about 5% year over year, beating Wall Street expectations for its third quarter results.
• Executives also provided some early thoughts on 2021 trends on a Monday morning call with investors, but stressed planning was up in the air given the unusual volatility this year. HCA plans to use 2019 volumes as a reference point for 2021.
• Earnings for next year could look similar to HCA's original guidance for 2020, before the coronavirus hit, but likely with a larger range of results given the ongoing pandemic and political uncertainty, CFO Bill Rutherford said. That original 2020 guidance was between $10.25 billion and $10.65 billion in adjusted earnings before interest, taxes, depreciation and amortization.

HCA has weathered the COVID-19 storms better than most, among an elite group of hospitals returning federal bailout funds. However, coronavirus cases are on the rise once again in the U.S. and will likely continue to plague providers for some time, HCA executives said on Monday's call.

And COVID-19 patients represent about 6% of HCA admissions. "We believe we will continue to treat COVID-19 patients through 2021," Rutherford said. "We believe it is reasonable to estimate about 4% to 5% of 2021 admissions could be related to the virus."

Yet despite the continued uncertainty, HCA offered a relatively rosy outlook for the 187-hospital system on Monday. Market share before the pandemic hit was at an all-time high, executives said, and HCA's overall positioning in its geographies may have actually improved during COVID-19.

"We had one of the strongest portfolio performances in years," CEO Sam Hazen said, noting 76% of HCA facilities had year-over-year EBITDA growth in the third quarter.

HCA did report a noted volume decline in the third quarter, a depression the 21-state system chalked up to COVID-19 outbreaks in key markets like Texas and Florida beginning in July. HCA facilities treated about 40,000 patients with COVID-19 in the third quarter overall and voluntarily suspended elective care in more than 100 hospitals at various times to free up capacity.

However, October has seen a sequential improvement in admissions from September, though it's still early in the cycle, management said.

In the third quarter overall, same-facility admissions dropped 3.8%, while equivalent admissions dropped 9% compared to the same period last year. Same-facility emergency room visits declined more than 20% while inpatient and outpatient surgeries fell 6.8% and 6.3%, respectively.

However, same-facility revenue per admission jumped almost 15% due to higher acuity patients and a favorable payer mix. Both COVID-19 and non-coronavirus patients were higher acuity than average, while HCA's more lucrative managed care mix of inpatients grew and Medicare volume was slightly slower to recover, according to Hazen.

The U.S. is currently seeing a growing third wave of COVID-19 cases heading into the winter, reporting a record 83,757 cases nationwide on Friday, according to Johns Hopkins University data. Growing caseloads are once again giving rise to fears about hospital capacity and potential overloading of the country's healthcare system.

HCA, one of the biggest for-profit operators, is currently running at about 70% utilization of inpatient beds and about 60% to 65% of ER capacity. The decline in ER utilization provides some much-needed flexibility for the system, allowing it to accommodate more volume if needed, while still looking for expansion opportunities, executives said.

"I don't see capacity being a barrier to growth for us," Hazen said.

HCA said earlier this month it plans to return or repay early all the relief funds it received from the federal government, including $1.6 billion in grants and about $4.4 billion in accelerated Medicare loans. The operator says it's working with HHS to return the aid and plans to repay the money through available cash and future cash flow from operations.

HCA is accelerating the timeline to pay back its $4.4 billion in loans — they would have come due in 2021 regardless after a government spending bill pushed back the deadline. Returning the grants suggests management confidence in operations and cost control, and the sustainability of HCA's financial performance, analysts say.

As of Sept. 30, HCA had cash and cash equivalents of $6.6 billion, total debt of $31 billion and total assets of $51 billion.

https://www.healthcaredive.com/news/covid-19-cases-could-be-5-of-2021-admissions-hca-says-amid-rising-q3-prof/587723/