Nashville-based HCA continues to generate big profits, even as other hospital operators struggle. And company executives say they’re benefiting from the competitive labor market.
With unemployment near historic lows, a
Bureau of Labor Statistics survey released last week finds more employers — even small businesses — are having to provide health insurance to attract workers. CEO Milton Johnson told analysts on a quarterly earnings call that the trend is even more pronounced in urban areas where HCA has most of its 178 hospitals. Nashville, for instance, has an unemployment rate of 2.2 percent.
“We’ve been saying as a company — especially in our markets — that we’re seeing a growth in the number of lives covered by employer-sponsored insurance,” he said. “And we believed that that macro [trends] would eventually start to show up in our numbers.”
Hospitals are, of course, also employers. But HCA executives say they have not had more trouble than normal recruiting nurses and keeping pay increases at typical levels.
Johnson spent most of his call Wednesday fielding questions about why the company is doing so well. It’s
strong quarterly earnings, with revenues up more than seven percent, sent shares in HCA to a
record high.
Fellow hospital operators based in Nashville have not experienced the same lift from the booming economy. The next largest for-profit chain in the country — Community Health Systems — has been
flailing after excessive borrowing to fund expansion in recent years. Others
that focus on rural communities have had trouble overcoming demographic shifts in small towns and changes in how Medicare and Medicaid pay.
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