HCA and UHG this week said they expect to post sizable profits in 2015, as reforms and payment changes are reshaping the healthcare industry.
Hospital Corporation of America raised its outlook for investors in a preview of first quarter earnings, with revenue for the full year now expected at $39 to $40 billion and earnings per share at $4.90 to $5.30.
For the first quarter of 2015, Nashville-based HCA anticipates revenue of $9.6 billion, up from $8.8 billion in the first quarter of 2014, and earnings before income taxes of $1.07 billion, compared to $680 million year-over-year.
“We are very pleased with the results of the first quarter,” said HCA CEO R. Milton Johnson. “The majority of the first quarter performance was driven by continued favorable volume and payer trends in our core operations."
Compared to last year, same-facility admissions at HCA’s 165 hospitals increased 5.1 percent in the first quarter, same-facility equivalent admissions grew 6.8 percent, and same-facility emergency room visits increased 11.5 percent, while revenue per equivalent admission increased 1.6 percent.
HCA, the country’s largest for-profit hospital system, will disclose complete first-quarter results on May 5.
Meanwhile, the country’s largest insurer also booked a bustling first quarter.
UnitedHealth Group, which covers 41 million Americans and owns a large technology and services portfolio, brought in a $1.4 billion profit on revenues of $36 billion.
The $1.46 a share in revenue was up 27 percent from $1.1 billion or $1.10 a share in first quarter 2014. Revenue also climbed 13 percent compared to the prior year..
UHG increased its guidance for full-year earnings by $0.25 a share — now forecasting $6.15 to $6.30 per share — with revenue expected to be $2 billion higher than previously forecast, at $143 billion.
“We are working to create more effective and more modern approaches to accessing and delivering healthcare,” said Stephen Hemsley, UHG CEO. “We are gratified with the market response to our efforts, providing us opportunities to serve more people, in more ways.”
UHG’s Optum technology and services subsidiary saw first quarter revenues grow 15 percent, to $12.8 billion, with earnings from operations of $742 million, up 14 percent.
UnitedHealthcare, UHG’s insurance business, added added 680,000 members to individual and employer plans in the first quarter, including enrollment from public exchanges in 25 states. UnitedHealthcare’s Medicaid managed care plans also grew by nearly 750,000, to more than 5 million, over the last year, with first quarter growth of 160,000. UnitedHealthcare’s revenue grew 11 percent, from $29 billion to $32.6 billion, with operating income of $1.9 billion. up 35 percent.
Among the ventures that Hemsley sees as major market moves, Optum is acquiring the drug benefit plan Catamaran for $12.8 billion, which will create the third largest pharmacy benefits manager in the country, amid rising drug prices and waves of new specialty medicines. Optum is also acquiring MedExpress, a national retail clinic chain with 140 locations across 11 states, in a major foray into the convenient care market.