HCA Healthcare First Quarter Results Hurt by Labor Costs

The health system is off to a slower than expected start to the year despite an increase in revenue.

HCA Healthcare's first quarter financial and operating results fell short of projections as increased labor costs weighed down a rise in revenue, the company announced today.

Revenue for HCA in the first quarter was $14.94 billion, compared to $13.97 billion in the first quarter of 2021. However, the Nashville-based health system dealt with labor shortage challenges, as many hospitals and health systems across the country have, which meant higher expenses to keep and attract workers.

The result is a drop in expected revenue for the year, with the updated projection of $59.5 billion to $61.5 billion—nearly $500 million below the earlier forecast. HCA's adjusted EBITDA, meanwhile, totaled $2.94 billion for the first quarter, compared to $3.05 billion in the first quarter of 2021.

"As always, our colleagues and physicians continued to show-up and deliver on our promise to provide high quality care to our patients," Sam Hazen, CEO of HCA Healthcare, said in a release. "I want to thank them for their commitment and hard work as we hopefully exit the COVID-19 pandemic. In the first quarter, we had a number of positive volume and revenue indicators. Unfortunately, they were offset by higher-than-expected inflationary pressures on labor costs."

Approximately $244 million of the revenue in the first quarter was due to the proposed directed payment program by CMS from September to December 2021.

Other factors that played a role in revenue included the following increases compared to the first quarter of 2021:

• Same facility admissions increased 2.1% and same facility equivalent admissions increased 5%
   
• Same facility emergency room visits increased 14.6%
   
• Same facility inpatient surgeries increased 0.8% and same facility outpatient surgeries increased 6.8%
   
• Same facility revenue per equivalent admission increased 2.7%

HCA operates 182 hospitals and approximately 2,300 ambulatory sites of care, including surgery centers, freestanding emergency rooms, urgent care centers, and physician clinics in 20 states and the United Kingdom.