The nation’s largest hospital company sees more opportunities for expansion as many institutions struggle to break even. Nashville-based HCA reported its first quarter earnings Tuesday and maintained its multi-year growth streak.
HCA beat expections and posted profits topping a billion dollars for the three-month period. The company has been relatively unphased by the difficulty facing most of its competitors, including other for-profit hospital chains based in Nashville.
As fewer patients spend time in hospitals and insurers tighten up on what they’ll pay for, several other companies have been cutting costs and selling off hospitals. But HCA doesn’t seem interested in those.
“We could be entering a cycle where there are nice opportunities for the company,” CEO Sam Hazen told investors on a quarterly conference call. “Most of those are independent, not-for-profit systems that have some appeal.”
HCA is just a few months out from
closing a $1.5 billion deal to acquire the 6-hospital Mission Health system in Asheville, North Carolina. The nonprofit’s leadership said
HCA brought expertise in back-office efficiency that the independent system could never achieve on its own.
The head of the Federation of American Hospitals has predicted that
many systems will have to merge to survive in this new era when more services are being provided outside of a traditional hospital.
HCA says it’s in position to take advantage of the business trends.
“We are having discussions, but they are early discussions, with different systems that are exploring their options as they look at their futures and their situations,” Hazen said.
HCA has become particular about where it invests. If it’s going to enter a region, the company usually wants to own a handful of hospitals. In some of its top markets like Nashville, Austin and San Antonio, it
controls more than a third of the hospital beds.
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