HCA reports strong Q2 performance, sees decline in labor costs

Editor's Note

HCA Healthcare reported nearly $1.5 billion in net income for the second quarter (Q2), exceeding expectations, Modern Healthcare July 23 reports. The Nashville-based system attributed part of this success to a significant reduction in contract labor costs, which dropped by more than 25% compared to Q2 2023. This decline continues a trend over the past few years, although labor costs generally decrease between the first and second quarters due to payroll tax timing.

In Q2 2024, HCA earned $1.46 billion, or $5.53 per share, up from $1.19 billion, or $4.29 per share, in the same period last year. Quarterly revenue rose to $17.49 billion from $15.86 billion year-over-year. The system experienced a 10% decrease in Medicaid patients, a trend affecting other health systems due to Medicaid redeterminations. However, increased patient volume, particularly in inpatient care services, boosted HCA’s financial performance. HCA anticipates a 4% to 6% rise in patient volume this year.

HCA plans to invest between $5.1 billion and $5.3 billion in various areas, including staff retention, emergency room productivity, and outpatient services. During a call with financial analysts, HCA forecasted at least an 8% growth in ambulatory surgical center revenue this year. Despite its strong performance, HCA has no plans for additional expansion, choosing to focus its cash flow on enhancing existing facilities and services.

The system raised its 2024 financial guidance based on its Q2 results. HCA now expects annual revenues between $69.75 billion and $71.75 billion, up from a previous estimate of $67.75 billion to $70.25 billion. Projected net income has been adjusted to between $5.68 billion and $5.98 billion, compared to an earlier estimate of $5.2 billion to $5.6 billion.