The Nashville-based for-profit hospital operator recognized more than $800 million in government stimulus income.
HCA Healthcare released its Q2 2020 earnings report Wednesday morning, highlighting the negative effects of the coronavirus disease 2019 (COVID-19) pandemic on its bottom line.
Same facility admissions fell almost 13% during the quarter, according to HCA, while same facility equivalent admissions declined just over 20%.
HCA's revenues fell more than $1.5 billion year-over-year and the company recorded losses on sales of facilities of $27 million, compared to gains of $18 million in Q2 2019.
The Nashville-based for-profit hospital operator also recognized more than $800 million in government stimulus income from the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act, reporting nearly $600 million net of tax.
On a positive note, HCA did see its adjusted EBITDA rise by more than $300 million and its net income attributable to the company topped $1 billion compared to $783 million in Q2 2019.
"Throughout this remarkably challenging pandemic, I am reminded daily of what an incredible and resilient organization we have," Sam Hazen, CEO of HCA Healthcare, said in a statement. "I see our colleagues and physicians working every day to do the right thing for others, and I want to thank them for their dedication to our patients and the tremendous sacrifices they, and their families, are making in the midst of this global health crisis."
In addition to its same facility admission declines, HCA's same facility emergency room visits dropped by nearly 33%, same facility inpatient surgeries fell by nearly 16%, and same facility outpatient surgeries slid by almost 33%.
However, same facility revenue per equivalent admission rose 10% year-over-year, with HCA stating that its patient volumes gradually stabilized during May and June.
According to a sector comment published by Moody's Investors Service at the start of July, the expanded suspension of elective surgeries in Texas due to a spike in COVID-19 cases is credit negative for for-profit hospital companies, including HCA.
"HCA Healthcare’s second quarter reported EBITDA of nearly $2.7 billion (versus $2.3 billion in the second quarter of last year) reflects the significant benefit of grant funding received from the CARES Act aimed at offsetting lost revenues and increased expenses directly related to COVID-19," Jonathan Kanarek, vice president and senior credit officer at Moody's, said in a statement. "HCA recognized $822 million of this grant money during the three months ended June 30, 2020. In addition, the company did an exceptional job in managing expenses and conserving cash during an extremely volatile period for hospitals. Even as COVID-19-related cases and hospitalizations have recently accelerated in Texas and Florida, we believe HCA is well-positioned to weather this storm given its track record as a proven operator and its total liquidity in excess of $12 billion."
In its Q1 earnings report released in April, HCA laid out several steps taken to mitigate the effects of the outbreak, most notably establishing of a pandemic pay program for employees.
The company also withdrew its financial guidance for 2020 and suspended its quarterly dividend.
By the end of Q2, HCA operated 186 hospitals, had more than $7.7 billion of availability under its credit facilities, and cash flows from operating activities of $8.7 billion.
For complete financial information, review HCA's filing with the Securities and Exchange Commission.
Editor's note: This story has been updated to include commentary from Moody's Investors Service.
Jack O'Brien is the finance editor at HealthLeaders, a Simplify Compliance brand.
Photo credit: KONSKIE, POLAND - December 01, 2018: Hospital Corporation of America (HCA) logo displayed on smartphone - Image / Editorial credit: Piotr Swat / Shutterstock.com