HCA Holdings announced Wednesday it will donate $500,000 to two medical nonprofits to support relief efforts for the Nepal earthquake. The Nashville company will also match up to $500,000 of donations from HCA Employees and vendors to the American Red Cross.
HCA will donate 250,000 to Doctors Without Borders and $250,000 to MedShare International.
"As a health care provider with approximately 225,000 employees who treat millions of patients every year, our people have dedicated their professional lives to caring for others, and we have a long history of supporting humanitarian efforts," Milton Johnson, HCA chairman and CEO, said in a release. "We believe our employees and vendors will be eager to support the critical and significant relief efforts that are just underway."
HCA Holdings has donated $1 million to the CDC Foundation in support of response efforts to the Ebola epidemic in West Africa.
"Ebola continues to spread rapidly in West Africa, and CDC and others have made it clear that the window of opportunity to contain the virus is closing quickly," R. Milton Johnson, HCA president and CEO, said in a release. "The time to act is now, and we strongly encourage other companies, particularly those in the health care industry, to join us in this important effort to save lives."
Shares of HCA (Ticker: HCA) were trading down at $72.07 Thursday morning.
Veteran Wells Fargo analyst Gary Lieberman says the guidance raise by HCA Holdings Wednesday looks to be on the conservative side given that the benefits of health care reform aren't going to end anytime soon. He has reiterated his 'outperform' rating on shares of HCA, which jumped 10 percent (Ticker: HCA) to a record high. On the flip side, Paula Torch at Avondale tells Investor's Business Daily that HCA is proving (again) to be best in class.
HCA Holdings plans to increase its capital spending to $2.2 billion in 2014, up $257 million from 2013. On the company's conference call Tuesday discussing fourth-quarter earnings, President of Operations Sam Hazen said HCA will continue to invest in its growth agenda and intends to expand its operating rooms' capacity and add other facilities. Between 2013 and 2014, he said, the company will add 770 new inpatient beds and 270 emergency room beds. Included in the additions are five new hospitals, 15 new emergency rooms and three replacement surgery centers.
HCA executives on the call also discussed a drop in total admissions — one percent in Q4 — but a rise in revenue per patient, which offset occupancy drops due to a lighter flu season and lower pulmonary admissions.
"We experienced softer volume growth trends compared to recent years," said President and CEO Milton Johnson, "which was offset by higher-acuity patients and focused expense management."
Inpatient surgery admissions grew by one percent, and higher acuity service lines such as orthopedics, neurosciences and cardiovascular grew at a faster rate rate than other service lines, contributing to higher revenues per equivalent admission — 4.6 percent in Q4.
"We are intentionally investing heavily in our surgical growth across the company," Hazen said. "We've been doing that now for for over two years, and I think it's having an impact."
Despite analysts calling for specifics, HCA's leaders stayed relatively quiet on his team's expectations from health care reform, stating that the company's outlook would remain fluid through the year, but they were currently estimating a positive impact on EBITDA. CFO Bill Rutherford said the four key variables playing into HCA's guidance models are Medicaid expansion, the percentage of previously uninsured patients gaining insurance, medical tier selections and the amount of out-of-network treatment. How those will shake is still very much unclear.
"We know all of this is still unfolding and there remain many unknowns," Rutherford said.
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