HCA Healthcare’s Profit Rises Despite Drop in Patients

Mr. Hazen cited as factors the company’s tight control of costs and increased revenue from sicker patients. Admissions to its hospitals dropped 4.7% for the year, as the pandemic resulted in fewer procedures and less emergency-room traffic; but revenue per hospitalized patient increased 10.5%.

Net income attributable to the company rose 7.1% to $3.75 billion, compared with $3.51 billion in 2019. Earnings per share increased to $10.93 from $10.07. Annual revenue edged up to $51.53 billion, from $51.34 billion.

Executives said the company would boost capital spending this year, targeting strategic growth, and would resume dividend and share repurchase programs after halting both last spring.

Many hospitals started 2020 with growth that abruptly vanished in late March as they largely halted nonessential surgery to prepare for the virus. Most restarted surgery within six to eight weeks, but disruption continued through summer and fall surges.

Mr. Hazen said the final months of the year brought the pandemic’s biggest impact across HCA’s 185 hospitals, after the company had entered the fourth quarter with most of its hospitals outside the reach of a fall surge in infections.

“Our experience with Covid throughout the pandemic has been that it’s choppy,” Mr. Hazen told analysts in late October. At the time, he noted rising coronavirus cases were primarily affecting two of its Texas hospitals.

But in November, Covid-19 cases climbed across the chain. The trend then intensified, Mr. Hazen said Tuesday, with December accounting for about half of the HCA’s 56,000 coronavirus patients during the quarter. Last year, Covid-19 cases made up about 8% of the hospital chain’s overall admissions.

The company on Tuesday posted net income attributable to the company of $1.43 billion in the fourth quarter, compared with $1.07 billion in the year-earlier period. Earnings rose to $4.13 a share, from $3.09 a share.

Revenue climbed 5.7% from the year-earlier quarter to $14.29 billion. Analysts polled by FactSet were looking for $13.99 billion.

HCA, which is based in Nashville, Tenn., returned more than $6 billion in federal relief grants and loans in the fourth quarter. For others in the sector, federal relief has been critical to lessening the financial hit from higher expenses and lost revenue during the pandemic, according to Moody’s Investors Service credit analysts. As a result, many companies are expected to close the 2020 calendar year with a decline in operating margins, though less than earlier estimated, the analysts said.

The pandemic’s effect on business hasn’t been uniform, and those previously on weaker financial footing appear to have struggled more to withstand disruption, said Kevin Holloran, a senior director with Fitch Ratings. Downgrades for nonprofit hospital systems rated by Fitch significantly outstripped a small number of upgrades, he said. “The weak got weaker, but the strong held on.”

Rural hospitals, many already struggling, experienced an increase in closures last year, said George Pink, deputy director of the North Carolina Rural Health Research Program at the University of North Carolina at Chapel Hill. “I am not optimistic that 2021 will be a recovery year for rural hospitals,” he said. The research program reported 19 rural hospitals closed last year, a record in data since 2005.

HCA is one of the largest hospital owners in the U.S. and one of few that is privately held or publicly traded. Its rivals include publicly traded Tenet Healthcare Corp. and Universal Health Services Inc., and nonprofits Ascension, which is based in St. Louis, and AdventHealth, of Altamonte Springs, Fla.

Hospital credit analysts said the pace of the sector’s growth will depend somewhat on the rollout of vaccines and the economy’s recovery, with employment a key source of health insurance coverage.

Write to Melanie Evans at [email protected] and Dave Sebastian at [email protected]