LifePoint Braces for Annual Shareholder Meeting
The company fell short of its 2017 financial performance expectations, as the industry has been under pressure.
While continuing to project confidence in the company's future, LifePoint Health's top executive delivered a frank message to investors Wednesday ahead of the company's annual shareholder meeting: 2017 was rough.
William F. Carpenter III, chairman and chief executive officer for the for-profit rural hospital operator based in Brentwood, Tennessee, admitted the company failed to achieve its financial performance expectations last year, as headwinds have made the business of healthcare increasingly difficult industrywide.
"We are navigating a shifting payer mix, uncertainty in Washington, increasing consolidation of existing providers, a movement toward consumerism, in which our patients are exercising more choice in where and how they receive their care, and the entry of non-traditional providers into the healthcare environment," Carpenter said.
His message was submitted to the Securities and Exchange Commission as part of a proxy statement ahead of LifePoint's annual shareholder meeting, scheduled for June 5.
The company's stock price slumped when fourth-quarter and 2017 year-end earnings numbers were released in February. Same-hospital revenues were about $5.9 billion in 2017, down 0.8% from the year before.
Although the hospitals LifePoint acquired in 2014 and 2015 performed according to plan last year, the hospitals it acquired in 2016 "did not improve at the pace we had expected," Carpenter noted. The company responded by pausing its acquisitions activity in 2017 to focus on integrating the new facilities into the company's overall operation.
"We believe that the transition of ownership of these hospitals will position them more effectively to service their local communities as well as benefit [LifePoint] and its shareholders in the long term," Carpenter said.
Although the company exceeded its quality goals, missing the mark on revenue and other financial goals resulted in below-target incentive payouts. Those eligible for annual cash incentives earned 68% of that target.