HCA Healthcare lowers full-year guidance as payer mix shifts
The company reported an unfavorable impact on income before income taxes of approximately $400 million in the second quarter due to an increase in uninsured volume.
HCA Healthcare (HCA) reported second-quarter revenues of approximately $20.230 billion, up from $18.605 billion in the same period last year.
The healthcare provider saw a divergence in patient volume during the quarter. Same facility admissions rose 2.5% and equivalent admissions increased 2.7% YoY, accelerating from the 0.9% and 1.3% growth recorded in the first quarter. Emergency room visits also saw a sharper increase, rising 3.6% YoY compared to a 0.3% increase in the prior quarter.
Surgical volumes continued to trend downward. Same facility inpatient surgeries declined 2.3% and outpatient surgeries fell 3.4% YoY. These results represent a steeper decline than the 0.3% and 1.7% drops seen in the first quarter.
Adjusted EBITDA for the quarter was approximately $4.027 billion, compared to $3.849 billion in the second quarter of 2024. However, the Adjusted EBITDA margin compressed to 19.9% from 20.7% in the prior-year period.
A shift in payer mix, driven by an increase in uninsured volume, created an unfavorable impact on income before income taxes of approximately $400 million. This was partially offset by approximately $400 million in incremental net benefit from Medicaid Supplemental Payment Programs, primarily in Florida.
HCA revised its full-year 2024 guidance downward across several key metrics. Revenue guidance is now a range of $77.000 to $79.500 billion, down from a previous range of $76.500 to $80.000 billion. Net income guidance was lowered to $6.300 to $6.700 billion from $6.495 to $7.035 billion.
Adjusted EBITDA guidance for the year was reduced to $15.400 to $16.100 billion from $15.550 to $16.450 billion. Consequently, the company lowered its full-year EPS guidance to a range of $28.70 to $30.50 from $29.10 to $31.50.
The company increased its 2024 estimate for the unfavorable impact of health insurance exchanges to a range of ($1.000) to ($1.200) billion from a previous estimate of ($600) to ($900) million. Meanwhile, the estimated net benefit from Medicaid Supplemental Payment Programs was raised to $300 to $500 million from a prior range of ($50) to ($250) million.