HCA Healthcare, Inc. Quarterly Report for Q3 Ended Sep 30, 2021

Summary

HCA Healthcare, Inc. (HCA) reported strong revenue growth for the third quarter of 2021, with a 14.8% increase to $15.276 billion compared to the prior year. This growth was driven by a combination of increased revenue per equivalent admission and a higher volume of equivalent admissions. Net income attributable to HCA Healthcare, Inc. saw a significant jump to $2.269 billion, or $7.00 per diluted share, a substantial increase from $668 million, or $1.95 per diluted share, in the third quarter of 2020. This surge in profitability was notably influenced by a $1.047 billion gain on sales of facilities in the current quarter, compared to a much smaller gain in the prior year. It is important to note that the prior year's third quarter results included a substantial $822 million reversal of government stimulus income. Excluding these one-time items, the underlying operational performance shows solid year-over-year improvement. The company experienced a rebound in patient volumes, with consolidated admissions up 5.9% and same-facility admissions up 6.8%. Emergency department visits showed particularly strong growth, increasing by 28.9% on a consolidated basis. However, inpatient surgery volumes were constrained, likely due to capacity being utilized to treat a surge in COVID-19 patients. The company continues to manage rising labor costs, with salaries and benefits as a percentage of revenue increasing slightly, and supply costs, particularly for pharmacy, also saw an increase driven by COVID-19 therapies and PPE utilization. Despite these cost pressures, HCA Healthcare demonstrated robust financial performance, supported by strategic facility sales and a general recovery in patient demand.

Key Highlights

• 1Revenue increased by 14.8% to $15.276 billion in Q3 2021 compared to Q3 2020.
• 2Net income attributable to HCA Healthcare, Inc. surged to $2.269 billion ($7.00/share) in Q3 2021, up from $668 million ($1.95/share) in Q3 2020.
• 3Significant gain on sales of facilities ($1.047 billion) contributed substantially to Q3 2021 net income.
• 4Consolidated admissions increased by 5.9% and same-facility admissions by 6.8% in Q3 2021, indicating a recovery in patient volumes.
• 5Emergency department visits saw a substantial increase of 28.9% (consolidated) and 31.2% (same facility).
• 6Salaries and benefits costs increased as a percentage of revenue to 46.4% in Q3 2021 from 45.8% in Q3 2020, with per equivalent admission costs rising 7.4%.
• 7Supply costs per equivalent admission increased by 6.8%, with pharmacy supplies up 24.0% due to COVID-19 therapies.

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