The for-profit rural hospital operator reported a fourth-quarter loss of $27.5 million.
LifePoint Hospitals Inc., based in Brentwood, Tennessee, reported fourth-quarter and year-end financials Friday, falling short of analyst expectations.
The for-profit rural hospital operator posted a fourth-quarter loss of $27.5 million, sending stock prices downward more than 13% in mid-morning trading.
LifePoint’s fourth-quarter numbers included a one-time non-operational adjustment that increased doubtful accounts by $72.6 million, as the company has reevaluated the likelihood of collecting on certain of its accounts receivable.
The adjustment, which translates to $1.15 loss per diluted share, was made as LifePoint installs new systems and enhances analytical procedures “to centralize, standardize and refine its estimation processes to more precisely estimate the collectability of accounts receivable at a more detailed and disaggregated level,” the company said.
During a call with investors Friday morning, LifePoint executives said they first realized this quarter that a change was needed.
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The tax law recently signed by President Donald Trump is expected to give LifePoint incremental cash savings of $30 million annually, Executive Vice President and CFO Michael S. Coggin said.
LifePoint was among three for-profit hospital operators identified in a Moody’s Investors Service report as most likely to reap the greatest benefit from the tax law.
Without being terribly specific, Chairman and CEO William F. Carpenter III said LifePoint would put its tax savings to good use.
“We anticipate deploying these cash savings in a manner consistent with overall company strategies,” Carpenter said.
LifePoint recently sold Rockdale Medical Center in Conyers, Georgia, to Piedmont Healthcare.
Looking forward, President and COO David M. Dill told investors that LifePoint is in the process of overhauling its strategic plans companywide.
"I am very excited about the work we will be doing during the first half of 2018 to update our operating strategies across the entire organization to ensure that we continue to be well-positioned to capitalize on the evolving industry trends for the next five to seven years," Dill said. "This project, an in-depth review, will be focused on both long-term and short-term strategies to accelerate our growth into the future."
Editor's note: This story has been updated to include additional information from the investors call.
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Steven Porter is an associate content manager and Strategy editor for HealthLeaders, a Simplify Compliance brand.