News in brief - Feb. 23, 2004

HCA announces 2003 profit - Surgery center operator makes IPO - Executives gauge health future

HCA announces 2003 profit

The nation's largest for-profit hospital company, HCA Inc., reported net income of $317 million, or 63 cents per diluted share, in the fourth quarter 2003 on $5.6 billion in revenue. For the same quarter of 2002, HCA posted a net loss of $102 million, or 20 cents per share, on $5 billion of revenue.

However, the 2002 totals included an after-tax charge of $418 million related to a settlement with the U.S. Dept. of Justice over allegations that HCA overcharged the government. Excluding such extraordinary items, profits for the fourth quarter were down to 58 cents per share in 2003 from 63 cents in 2002.

HCA also announced on Feb. 3 that it was profitable for the year 2003, with net income of $1.3 billion. That's $2.61 per diluted share, compared with $833 million, or $1.59 per share, in 2002. Revenue increased 11% to $21.8 billion from slightly less than $20 billion.

Consolidated hospital admissions, which include 11 Kansas City area hospitals that HCA acquired on April 1, increased 3.3% in 2003. The fourth quarter also saw a jump in hospital admissions, with a 15% increase in pulmonary or flu admissions compared with the same period a year earlier. However, HCA also said it had to put 11.4% of its fourth-quarter revenue in reserves in case patients didn't pay, compared with 8.6% in the fourth quarter of 2002.

Surgery center operator makes IPO

Symbion Inc. made its initial public offering, pricing 7.2 million shares at $15 apiece.

The Nashville, Tenn.-based surgery center operator said it was expecting net proceeds of $97.2 million from the IPO. The company planned to use the proceeds to repay debts and to pay some stockholders for the conversion of shares to common stock.

Symbion began trading on the Nasdaq National Market on Feb. 6. By the end of that day, shares were trading at $18.63.

Symbion owns and operates surgery centers in 19 states.

Executives gauge health future

Health care executives see the rate of health care spending as the biggest threat and information technology as the biggest opportunity over the next several years, according to a recent poll conducted by Harris Interactive.

The poll, which queried people in the health care industry who were planning to attend the World Health Care Congress, reported the erosion of employer-provided health insurance and the rising number of uninsured and underinsured were the next two perceived threats.

Employer-provided health insurance was also perceived as an opportunity. Rather than its erosion, however, health care executives said its evolution would be worth watching over the next few years. The increasing prevalence of chronic medical conditions also was a high-ranking opportunity, according to the poll.

The most effective and desirable ways to cut costs, according to the poll, were reducing the administrative costs associated with the reimbursement system, improving the quality of care through technology and other practice guidelines, and containing professional liability costs.